December 11, 2006

As Americans take out their credit cards and Christmas savings to head for the box store discounters this season carrying high hopes that the democrats who won the midterm elections are actually going to solve things, particularly the mess republicans have made in Iraq, there are at least three major happenings that deserve everyone's attention:

1.  Is the Grim Reaper, Donald Rumsfeld, really resigning or is he making his strongest last minute political move to remain in power and control? In order to truly walk away from his job, the democrats must confirm Bush's appointment of Robert Gates, another Texas neocon with an Iran/Contra history, as the next Secretary of Defense. Rumsfeld remains in power until some replacement is authorized, which could take a long time. And Rumsfeld knew Bush had been talking to Gates.

On Sunday, December 03, 2006, the New York Times published a front page article titled "Rumsfeld Memo on Iraq Proposed Major Change" which resembles a dog training manual but covers what Rumsfeld reportedly said about "minimal" strategies "above and below the line." (Read Memo)

2.  The new Secretary of the Treasury, Henry Paulson, along with the head of the independent Federal Reserve, Bernard Bernanke, are this month heading to the Orient supposedly to "press China" to revalue the yuan. Rotsa Ruck.

As mentioned elsewhere, this is tantamount to asking WalMart to send its happy face flying around stores flipping price cards backwards - raising prices. And this is brought to being at a time when both China and Japan, our two largest creditors, have stated their intentions to "come off" the dollar and "diversify" their investments, a situation that unless orderly and "minimal" could bankrupt the U.S. overnight. Without substantially increasing interest rates to make treasuries more attractive to investors, and thus increasing domestic inflation, Treasury securities are going to become more and more difficult to sell and as a way of raising or borrowing money. In "auctions," treasuries are already less than fifty percent "accepted" from securities "tendered."

Let's not forget that it was Paulson who, while being fairly new to the job, just helped raise the national debt a record $615.7 billion in fiscal 2006 and one day. Without raising interest rates substantially, treasury securities are already becoming more and more difficult to sell.

We should also remember that wanting Euros instead of Dollars for oil was one of the real reasons for invading Iraq and deposing Saddam. Iran has made the same overtures and you don't see us asking England to revalue their currency as we approach the point where it takes $2 paper to buy £1 sterling.

3.  Many economists are already predicting a 2007 recession and that's in government terms of a candid full three quarters in a row of decline by their indicators. With a dollar falling in value, a horrendous trade deficit plus a real budget deficit of $485 billion last year, and an increase to the national debt of $126.3 billion so far this fiscal year, the last thing we need is wilder spending by the government. But that's exactly what the Pentagon is asking for to support the occupations and battles in Iraq and Afghanistan while the media debates the definition of civil war.

The Pentagon started off by asking for $160 billion over their already bloated budget program of almost a half trillion for 2007, then trimmed this down to $130 billion, and is now willing to settle for something over $100 billion. None of that is chicken feed.

Among the alternatives offered in the Rumsfeld memo is the idea of trimming the number of military bases intended for Iraq from 55 to 5. Isn't that interesting? Obviously, the plan is to increase our military Empire of 234 bases spread across the world to 289 unless Bush follows Rummy's latest advice. And we wonder why so many people of the world hate us as we watch to see if John Bolton, one of the authors of Pax Americana, will be confirmed as our representative to the United Nations.

Meanwhile, back at the home front, middle class workers continue to lose their pensions and health care plans even though they've paid for this insurance for years and are entitled to those benefits, their jobs continue to flow out of the country, and illegal aliens continue to enter to work for slave wages and benefits supplied by the same taxpaying working public.

On top of all that, New Orleans is still waiting for the "greatest reconstruction effort the world has ever seen" as promised by Bush during one of his immediate post Katrina publicity speeches. And those thousands of trailers purchased by FEMA (Failing Everyone Miserably Again) sitting on pads that cost us millions to keep them from sinking into the ground in Hope, Arkansas, the home of Bill Clinton, are now being moved to the unused "proving grounds" just north of Madison, Indiana, in hopes no one but a few tobacco farmers will notice.

It's bound to be an interesting few weeks as the republicans push for as much as they can get in December and as the democrats take over control of Congress after New Years day.

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Archives

Special Bonds In "Special" Trusts

New Orleans Looks Like Iraq

New Debt Record - $76 Billion

Too Late For Corrective Action

Going Whole Hog In Just Four Days

Snow Thinks Citizens Are Stupid

Shackled, But Plunging Ahead Anyway

Debt Limit - We're Not There Yet

The Economy - What Does This Tell You?

Broke & Stalling - Now We're At The Debt Limit

FEMA = Failing Everyone Miserably Again

To The Moon Alice

Scrambling - And Hitting The Road

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