As the world awaits another $600 billion flood from Bernanke’s printing press, central bank governors from Brasília to Tokyo are preparing to respond in kind. This is the monetary equivalent of a nuclear war, except instead of radiation, bombs of inflation threaten to make the world economy uninhabitable for saving and productive enterprise.
While much of the attention has been focused on China and accusations that it is a “currency manipulator,” the first shot in this war was clearly fired by the US Federal Reserve. Last month, the Fed came out with a statement that, for the first time ever, said inflation is rising at a rate “below its mandate.” That is, they acknowledged that the deflation threat had passed, that prices were stable – but they still intended to send prices higher.
Since the Bretton Woods Agreement was signed in the wake of World War II, the global monetary system has been based on the US dollar. This means that when the Fed decides to create trillions of dollars of inflation, other countries can’t simply say, “let them dig their own grave.” Instead, because their international transactions are denominated in dollars, they feel a pressure to maintain relatively stable exchange rates between their currencies and the dollar.
Today is the anniversary of the September 17, 1787 ratification of the Constitution of the United States. While the federal government no longer even pretends to follow the Constitution, I would like to write for a moment on the second-most important safeguard the founders tried to leave us. (The most important safeguard being sound money, which by itself greatly inhibits rash war-making, as beautifully illustrated in this clip.)
Today, Ron Paul, released the following regarding Obama’s speech last night.
And of course, he’s spot on as usual. Note that the picture associated with this post was not released by Ron Paul as part of the press release.
“The President’s announcement that all U.S. combat troops have left Iraq is no more believable than the ‘Mission Accomplished’ declaration was in 2003.
“Once again, we are being told the mission has been accomplished and our brave men and women are coming back home. Though the people are hopeful they remain skeptical, and rightfully so.
“The biggest problem is that success in Iraq is undefinable since the mission was never defined. The reasons given for the invasion were based on misinformation. Now, the war has cost us hundreds of billions of dollars and this has contributed significantly to our economic woes.
“Forty-four hundred Americans are dead, thirty thousand severely wounded, and more than a hundred thousand are suffering from serious health problems related to Post Traumatic Stress Syndrome. This alone should tell us that it was not worth the investment and the needless sacrifice of our young people and the taxpayers.
“It is deceitful to imply we will avoid hostilities with this new policy. We still have to contend with:
the 50,000 troops carrying weapons remain in Iraq
the 100,000 contractors that remain with more expected to go to Iraq
the 9,000 special ops personnel trained in assassinations that remain in Iraq
a huge embassy, bigger than the Vatican, that will remain
Dozens of military bases that will stay
Al Qaeda organizations that did not exist before the war
Muqtada al Sadr, a strong nationalist who has gained much political power
The fact that Iran benefits tremendously with the Shiites now in power in Iraq and is a close ally of al Sadr
“Osama bin Laden wins by ‘proving’ that America has an agenda of occupation in the Middle East. And, we continue to walk into his trap and hand him up his best recruitment tool in his efforts to incite hatred and terrorism against the United States.
“What’s worse, President Obama made it clear last night that the troops and resources leaving Iraq will not come home to defend our country or ease our economic woes. They will instead be diverted to Afghanistan, perhaps also Pakistan and, I fear, even Iran.
“From my viewpoint we are the losers in this fool’s errand of endless war. Tragically, this new policy is not one of peace but merely a charade that will severely undermine our national security and continue us down the path to bankruptcy—a threat that we best not long ignore.”
To paraphrase what I heard in Barack Obama’s speech earlier tonight…
- We’re bringing our combat troops home from Iraq… and sending them to risk death in other no-win wars.
- But we’re gonna keep about 50,000 troops in Iraq to… do what they’ve already been doing since around 2005… nation-building.
- Sometime in 2011 we will remove all U.S. military troops from Iraq (yeah right) but we will leave behind a private “force” to continue our nation-building there.
- Though George W. Bush was a patriot and we may have disagreed on a bit of foreign policy minutia we are in large agreement that we must continue breeding hatred for all things America by shifting our focus toward different faux-monsters to destroy in far away lands.
- Yes, like George W. Bush, I have trouble going to sleep at night because there are terrorist monsters under America’s bed. I don’t care if you can’t see them when you turn on the light and look. They are there! I swear!
- We spent far too much money on the Iraq War so we must bring it home and spend it on entitlement programs then borrow perhaps another trillion or so to copy our Iraq effort in Afghanistan and who knows maybe we’ll do the same in Iran or Pakistan a bit later. This will be sure to help our economy here at home.
- God Bless America because we need all the help we can get with me as your president.
- You should have all voted for Ron Paul. Let’s hope you get another chance in 2012.
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That about sums up what I heard from President Barack Obama tonight. The non-paraphrased version is available too. I assure you there is not much different than my condensed version except for maybe that last Ron Paul bit.
Yesterday, in a short article, Ron Paul outlines what a Tea Party Foreign Policy should look like:
As one who is opposed to centralization, I am wary of attempts to turn a grassroots movement against big government like the Tea Party into an adjunct of the Republican Party. I find it even more worrisome when I see those who willingly participated in the most egregious excesses of the most recent Republican Congress push their way into leadership roles of this movement without batting an eye — or changing their policies!
As many frustrated Americans who have joined the Tea Party realize, we cannot stand against big government at home while supporting it abroad. We cannot talk about fiscal responsibility while spending trillions on occupying and bullying the rest of the world. We cannot talk about the budget deficit and spiraling domestic spending without looking at the costs of maintaining an American empire of more than 700 military bases in more than 120 foreign countries. We cannot pat ourselves on the back for cutting a few thousand dollars from a nature preserve or an inner-city swimming pool at home while turning a blind eye to a Pentagon budget that nearly equals those of the rest of the world combined.
by John Browne, Senior Market Strategist, Euro Pacific Capital
At long last, a good portion of mainstream economists now concede that a ‘double dip’ recession is in the cards for the United States. To head off the pain, sixteen top economists addressed an open letter to the President urging him to “stimulate” the economy with a massive new round of government spending. We feel this is a recipe for driving a recession into a depression. However, there can be few doubts that such a move is being considered in the highest policy circles. Flush from victories in financial regulation and healthcare, the Administration may feel the conditions are ripe to push through another bold initiative.
If so, the United States may find itself in a very diminishing bloc of nations who fail to appreciate the magnitude of the global debt crisis. Its policies will become increasingly at odds with the drift of other world powers. Given American dependence on economic support from abroad, the risks of such isolation are significant.
On July 20th, UK Prime Minister David Cameron made his first official visit to the US. At a joint press conference that followed the private meeting, President Obama and Mr. Cameron papered over the fundamental economic disagreements that separate both governments.
Last week the Campaign For Liberty sponsored a a foreign policy debate between Bruce Fein and conservative radio talk show host Jeff Kuhner. Fein has recently released a book published by the Campaign for Liberty called “American Empire: Before the Fall“.
Please take some time to watch video of the debate embedded below. It truly demonstrates the dividing line between non-intervention and intervention. Both Fein and Kuhner provide excellent arguments, however I feel that Fein missed an opportunity to point out a serious flaw in Kuhner’s interventionist logic.
First, Kuhner does not dispute and therefore admits Fein’s assertion that the war on terror is a perpetual war. Later, Kuhner cites putting the Japanese in interment camps during WWII was a necessary and temporary evil. He argues that during times of war we must be willing to sacrifice some of our liberties so that we can be more free down the road once the fighting is over.
Fein could have jumped on this point by asking Kuhner the following question:
If we are in a perpetual war aren’t the civil liberties sacrifices we are making also permanent?
Equating the war on terror with WWII is like saying Coca-cola and orange soda taste the same. I bet Kuhner and his interventionist peers would be unhappy if they ordered a Coke and were brought orange soda instead.
You may notice the trend. As the letter below indicates, more and more aspiring politicians talk about limiting government to the confines of the Constitution. But the incumbents in Congress continue to ignore the Constitution when they write and pass their bills.
One way to cure them of their cluelessness is to pressure them to pass the Enumerated Powers Act. This short, simple bill will require that all bills cite their authority under the Constitution. This requirement will be a step in the right direction of rolling back the federal government to its Constitutional limits.
Liberty Maven
by Peter Schiff
by John Browne, Senior Market Strategist, Euro Pacific Capital
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