The quagmire that is Iraq and Afghanistan continues unabated in its loss of money and lives. Congress will approve another $120 billion request and Mr. Bush’s $40 billion war will have become a $440 billion war and occupation with no end in sight. The building of four large airbases around Baghdad can only lead to the conclusion that America plans to be in Iraq for decades to come - a perpetual financial drain on our economy. There is a $600 billion embassy complex being built in Baghdad’s green zone. We are sure that is not for temporary occupancy.
Rep. Jack Murtha has been saying for sometime that Iraq is not about terrorism; it is about civil war.” The bloody events as of late have proven his assessment all too true. Jack is unusual for a politician. He’s a truth seeker and a truth teller. Jack has been giving us the facts, the truth.
The flipside of that is George and the neocons know for sure they have brought democracy to Iraq. Democracy like terrorism is a cover for all the other real reasons we are there. Even Jack Murtha doesn’t get that because he is inside the box. America is now in the midst of a civil war in Iraq and our military is stuck in the middle of it. The civil war is the result of rigging Iraq’s “democratic elections.” The Association of Muslim Scholars, a hard line Sunni group, blamed America for worsening conditions in Iraq and they are right. Hundreds of thousands of Muslims across the country are chanting, “no to the occupation,” and they are right in doing so.
This has made us less safe in America because it could motivate Muslims to retaliate against us in the US and they have every right to do so. How would you feel if you were an Iraqi and your country and people were being torn apart, and you had done nothing wrong? Our troops are in a crossfire and we have helped recruit even more Islamic combatants. History resonates with the enmity and violence between Muslim sects, and our American youth are losing their lives and limbs trying to sort out these centuries of ancient hatreds. Many politicians in both parties want out of Iraq and Afghanistan, but are afraid of bringing up the issue because 45% of dumb Americans still are convinced it is a good idea to be there.
The Chinese are not much for words so when they say something you had best listen. They will cut back their foreign dollar reserves by 50% soon, but over a period of time, in order to increase the value of the yuan. If you had $820 billion you’d want to diversify some of your holdings. It’s an event that has to happen and once it begins it will be unstoppable. That is one of the key reasons the dollar’s value has to go substantially lower.
We also want to remind you again that Syria is exchanging most of its dollar reserves for euros and other currencies that they need in trade. In addition, as we told you last week, Norway wants its own oil bourse to trade oil in euros. The world is starting to move in that direction and the trend will be unstoppable if the Iranian oil bourse opens on March 16, 2006. What is tragic is that Americans do not know any of this because the media has kept them in the dark.
For all intents and purposes we do not have a constitution left. The revised Patriot Act is being fast tracked for approval. This shows you how totally corrupt our Congress is. It places all Americans in the position of legally being spied upon based on the whims of government agents. Citizens are finally realizing that the law is terrorist in nature and in fact the terrorists are within our government. There is no longer use for probable cause – it is any cause they want it to be. Permanent passage of the Patriot Act deflects attention to a bogus enemy that doesn’t exist, it puts us in jeopardy for merely questioning government, and it allows our criminal government to keep their cover by preying on those who dissent.
Iran says if they are attacked they will retaliate with a military strike on Israel’s main nuclear facility Dimona, the port city of Haifa and the Zakhariya area. Our guess is you won’t see sanctions against Iran. The bluff of the US and Israel has been called.
The Army has recommended that seven 82nd Airborne Division Paratroopers be discharged following allegations they engaged in six acts shown on a gay pornographic website. They face court martial on charges of sodomy, pandering and engaging in sex acts for money.
The White House has finally turned over 250 pages of emails they said they didn’t have, from VP Dick Cheney’s office. From 2003 they relate to the leak of the cover of CIA operative Valerie Plame Wilson. The emails are said to be explosive, and may prove Cheney masterminded the caper. It is expected the emails will prove Cheney lied to FBI investigators. Some of the emails turned over to Special Prosecutor Patrick Fitzgerald gave up Plame Wilson’s identity and CIA status.
It is expected that $1 trillion of $7.6 trillion in mortgages written in the first six months of 2005 are likely to default. These mortgages are packaged into pools and bonds are issued against them. The amount of bonds backed by these high-risk loans more than doubled since 2001, to $476 billion, so there are two branching-points feeding the potential housing bubble explosion. First, the home mortgages themselves - second, the bonds issued against the mortgages.
It is expected dollar volume of mortgage loans may fall 25% this year. This is borne out by the monthly housing index, a gauge of builder confidence in the single-family home market, which is at its lowest level since April 2003.
Our President last week told an audience in Milwaukee that the economy was growing at 3.5%; unemployment was down to 4.7%; more than four million new jobs were created in the past 30 months; home ownership was at record levels, and after tax income was up 8% over the past four years.
What he left out was the economy grew 3.5% because money and credit rose over 10% devaluing consumer-buying power; that unemployment was 13% because those who couldn’t get a decent job are not counted anymore. As well, he left out that over the past four years of recovery 10 million jobs should have been created and only three million were created. He did not address the five million jobs we offshored or outsourced. We hear nothing of the 3.3% rate at which sub-prime borrower homeowners are losing their homes, nor that the 8% gain in income was offset by a 40% loss in purchasing power – some recovery. We are not doing fine, we are doing terrible.
Our President says this is due to low taxation. He left out that our fiscal deficit since his tenure has been more than $500 billion annually. He has not engaged in careful government spending. Over $400 billion has been wasted on two needless wars and occupations.
Mr. Bush might look at US poverty figures as he wastes our money in the Middle East. US income grew at only 1.5% between 2001 and 2004, compared with 10.3% between 1998 and 2001. Between 2001 and 2004 real wages fell 6.2%. This was during a period of low unemployment, which does not auger well for the next crisis. We’ll have to send the unemployed to India and China to work.
Savings are minus 0.5% and ownership in mutual funds has fallen 3.3% to 48.6%, the first recorded drop since the survey began in 1989.
Prior to Hurricanes Rita and Katrina, 25 million Americans went to Second Harvest for food and shelter - that is up 9% from 2001. Thirty-eight million Americans live in hungry or food insure households, up 5 million since 2000. We find this to be a dismal track record in a recovery.
Sales of new homes fell 5% in January, the lowest in a year. The number of new homes on the market (inventory) increased 2.5% to a record 5.2 months supply at the January sales pace, the largest inventory in nine years. Sales were 1.233 million and the “experts” forecast 1.27 million sales fell in three of four regions. The West was up 11.3%; the South fell 10.3%; Midwest 10.8% and Northeast 14.9%.
The more we look at the situation that Ben Bernanke is in the more we believe that we’ll have at least two 1/4% interest rate increases and maybe two more before the year is over. He will use them as a cover to convince investors and professionals that he’s an inflation fighter; while he is expanding money and credit at better than a 10% rate. That is the plan and that is why in a few weeks M3 won’t be published anymore. He and his masters want to deceive us.
Ben would have us believe that the economy has absorbed oil sticker shock without inflation spiking. Official inflation cannot spike, because all of the numbers are rigged. They are what the Fed wants them to be. Inflation is not under control; it is more than 10% and ready to accelerate again.
Bernanke says, “The Fed doesn’t really have good instruments for addressing asset price bubbles should they exist, particularly if they are in on particular segment or another.” Yes Ben and we believe the tooth fairy. You don’t want to recognize them because the Fed creates them. Ben says inflation and inflation psychology have remained at bay, so the Fed can pursue a policy of rate hikes that is more gradual and predictable. He must think we are terribly dumb.
Palestinian funds have been cut off so they cannot pay for oil and Israel has cut off their oil. What can Israel be thinking? Israel will not transfer taxes and tariffs on products crossing Palestinian land borders as well. That is $60 million a month and is 60% of Palestinian public funds. That is terrible. That is no way to solve Arab-Israeli problems.