Anyone Feel A Chill?

“Fight Against Stupidity And Bureaucracy”

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The Sunday Sermon

USA-and-USSR-Flag

I know the summer is coming to a close, but the chill I’m talking about in this post is the one coming from the Cold War.

You remember it?

The thing that we though we had got rid of in 1992 when Daddy Bush said, “A world once divided into two armed camps now recognizes one, sole and pre-eminent power, the United States of America.”

That ended the Cold War and everyone was happy. America had won.

So why did it start again? And why did our politicians not have the gumption to avoid it?

Two pretty good questions, I think.

I suppose the answer is that it all started again because America desperately needs a bogey man – a global one, not some terrorist organization like Al Qaeda or ISIS.

It gives them a reason to keep the war machine going which is good for the economy.

It gives them the chance to tell the world that the choice they have to make is between America and Russia (in other words, between ‘good’ and ‘bad’).

good_v_bad

And indeed it used to be that way, when the Russian regime was hell bent on imposing their failed communist philosophy on the free world.

The problem is that America wasn’t content with winning. For some reason it felt it needed to win again.

This time it is trying to do so by bribing and coercing former Soviet satellite states into joining an economic and military (EU/NATO) alliance against Russia.

That has, understandably and predictably, provoked the Russians into once again flexing their muscles, the result of which we are starting to see in the Ukraine.

And so the Cold War begins again.

But it won’t be the same as the last one. Some things are very different.

This time America is bankrupt, not Russia, which on the contrary has massive wealth at its disposal. This time America is being perceived by the rest of the world as dithering and incompetent.

nsa-spying-scandal

And, thanks to the arrogance of organizations like the NSA, this time it is America, not Russia, who is perceived by the rest of the world as untrustworthy and untrusting of its allies. That’s quite the reversal of the old Cold War when it was the Russians who were notorious for listening in on conversations, bugging hotel rooms and the like.

In addition Russia is not currently bound to an outdated and failed communist dogma.

Despite all the bogus posturing of President Obama, who it seems can’t make up his mind to do anything, Russia will not allow NATO to set up shop in its backyard.

America has made a huge tactical mistake interfering so close to Russia. They are leaving Putin with little alternative but to do his own bit of posturing. The only difference is he means it.

When a bear is sleeping, poking it with a stick is never a wise move. Neither is trying to force it into a corner.

This time it may well bring consequences that none of us will like.

poking a sleeping bear

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The Sunday Sermon

“Fight Against Stupidity And Bureaucracy”

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Can’t let the month end without another Sunday Sermon.

This time a little bit of an update on the political and financial scene as I see it.

So far the Obama administration is doing great! (That was a little sarcasm in case anyone didn’t get it.)

Troops are being sent to Syria and soon we’ll get bogged down in another mess that’s none of our business and will probably take many years and many lives to get us disentangled from – leaving behind chaos and confusion and a worse situation than the one we tried to fix.

obama-milking-us-economy-dry_cow_

Meanwhile the economic crisis continues. Not that you’d notice. The sham recovery has meant that stocks have been on an upward trend, bonds have been doing well, and confidence is high.

And all because….

….well all because the Fed continues to print money and pour it into these markets.

bernanke printing money cartoon

Or at least it has been.

Then Bernanke made a statement a few days ago to “clarify” the government’s position.

Oh dear me!

He said that the government would… he thought… he hoped anyway…. assuming nothing unforeseen happened…. at least nothing major that they didn’t see coming… that they would ease off their money printing and bond buying… or at least they might… soon or maybe later… but sometime at least… well, it was being discussed…

Needless to say with that dithering statement confidence immediately melted away from the market and the DOW headed down by more than 500 points. In fact investors and brokers seemed to be selling everything, not just stocks and bonds but gold and other commodities too. Not quite panic but definite unease was clear to be seen.

The only reason it didn’t all collapse is that while the underlying message is clear, the Fed’s delay in implementing their tap turn off gives investors a little more time to make a little more money  –  they hope.

The problem with that is knowing when to sell. And that is the trick that has eluded investors from individuals to hedge fund managers since the markets began.

What Obama and Bernanke want is crystal clear. They see the folly in printing money and buying bonds at near $100 billion a month and they know they have to stop it eventually otherwise an even bigger financial catastrophe will result.

Their problem is they want to stop it without causing a massive market correction.

bernanke economic growth

And that, as Samuel Goldwin used to say, can be summed up in two words – im possible!

It will be interesting and perhaps a bit painful to watch what happens next.

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