Afghanistan: Not Putting Our Head In The Sand

What are we, the United States, doing on the other side of the world in two Islamic Republics? The simple answer is nukes. But, if the President of the United States says that we are over there because Pakistan has nukes, then there is no theater. The world needs a little theater. What will the world look like if the international terrorist network, known as al Qaeda, a.k.a al Qaida, or, al Qa'ida, gets their hands on a nuclear weapon or nuclear material? That is the real bottom line.

The talk about helping Afghanistan, an Islamic Republic, build up its defenses to be able to put down the Talaban and al Qaeda is just a piece of the story. Unfortunately, Pakistan has nuclear weapons and that, in my opinion, is what brings us to the region. As we could bomb al Qaeda, in the mountains between Afghanistan and Pakistan, from the air, from now until we run out of jet fuel in the 22nd century, or level the mountains from a century of bombing, the facts will not change. The enemy is al Qaeda and there is no signing a peace treaty with a terrorist network that has no boundaries. Now, by giving Afghanistan time to get their shit together, and again, in my opinion, we have no good choices here, we can hopefully help Pakistan arrive at a more stable republic. This stuff is not like WWI or WWII, where you have a clear victory and an end to the fighting. Shit in this part of the world goes on and on and on. I know, no one wants to hear or believe that. Wrap it up and put a ribbon around it and mail it in time for Christmas is the way the western mind works, except this is not the west . This is not Europe. This is Asia, and this is traveling back in time to another century.

Our President doesn't have any good choices here, but the ball he must keep his eye on is the nukes that the Government of Pakistan have. Pulling out of Afghanistan is in reality not an option, it is putting our head in the sand.

Stay tuned.

The Economy & Monetary Policy

Last night I read where Fed Chairman Ben Bernanke wrote an op-ed piece in Sunday's Washington Post describing how "political influence" would screw up our central bank's ability to conduct monetary policy.

Our Congress behaves so poorly that it is almost enough to make me become a conservative. The only thing holding me back is that the conservatives in Congress do the same thing - act poorly.

Would not it be a good idea to require that members of Congress read and learn something about monetary theory and policy before they screw things up. But these people in Congress know it all already. Mark my words, if Chairman Bernanke can not influence this new legislation, the United States will see a big change in the way the world will treat our debt and the holding of US dollars. We, those of us in the country, might not see it, but the rest of the industrialized world will react to the politicalization of our monetary policy. The ministers of finance around the world know a hell of lot more about monetary theory and policy than Senator Dodd and the rest of our Congress. They are not fools and they will not tolerate our foolishness and stupidity.

With credit card interest rates at 29.99% APR (Annual Percentage Rate), monetary policy to a certain extent has shifted from the Fed to the banks that set the interest rate for credit cards. Let me explain. The Fed is keeping interest rates low in the hope that banks will lend money to businesses so that they will expand and hire more people. This is good because this is the direction we all want our domestic economy to go in. Unfortunately, the issuers of credit cards are making their own "monetary policy" when they raise the interest rate on the unpaid balance to 29.99%. This will cause people to buy less or cut up their credit cards altogether. Just the opposite of what the Fed is trying to do by keeping the cost of money low for the banks.

Going back to a cash economy is a step backwards. Credit and the availability of credit is what permits an economy to grow at a faster rate. The banks know this, but they are not concerned with the overall economy. Banks are concerned with making as much money for themselves and their shareholders. The problem is - banks and credit are the tools by which our domestic economy can move forward at a faster pace.

The Fed needs greater control over monetary policy not less.

Stay tuned.

Senator Dodd: Do Not Eff With The Fed

Our central bank is a complex tool, that used correctly can maintain the integrity of the US Dollar and supply the economy with enough money (credit) to facilitate our economic growth. Too much money in circulation and you run the risk of inflation, while too little money can hold back the growth of the economy. Simple?

Now comes the Senate and Senator Christopher Dodd and his Senate Finance Committee. They are suppose to understand the basics of a central bank, our Federal Reserve Bank. The Fed, as it is known, is today the scape goat for the economic crisis of 2007-08 and the present. But, is it fair to make the Fed and its Chairman, Ben Bernanke, the scape goat for the actions of the Senate, the prior Fed Chairman, Alan Greenspan and prior administrations? Politics is not about being fair, politics is about taking credit and getting re-elected.

In 1999, with the "leadership" of Senator Phil Gramm, the Senate passed the Gramm-Leach-Bliley Act which gutted what was left of the Glass-Steagall Act that prevented commercial banks from owning brokerage firms and insurance companies. Later, under President George W. Bush's administration, Senator Gramm slipped in another Bill called the Commodity Futures Modernization Act. After doing all this "good work", Senator Gramm left the Senate and went to work for UBS (Union Bank of Switzerland), who bought Paine Webber, a brokerage firm due to the deregulation Bill of Senator Gramm.

The Fed's role in all of this is unknown to me, but to blame the current Chairman for the mess that was made by the US Senate seems to me a bit unfair. Perhaps Congress should make everyone working at the Fed wear a little yellow cloth bank sewn to their left breast pocket of their suit coats. In this way, we can make those people working at the Fed first-class scape goats for everyone to see.

The Fed is not the problem. The new legislation that is being crafted by Senator Dodd and his fellow senators will tie the hands of the Fed to operate and conduct monetary policy. The Fed has an assortment of tools it can use to conduct monetary policy and its three basic tools can not be taken away or else we will no longer have an independent central bank. Remember, there are other central banks and their governments around the world that understand how a central bank is suppose to operate. Fucking up our central bank with a bunch of stupid regulations will not go unnoticed by the central banks in the rest of the world. Politics is one thing, but fucking up the monetary system of the United States is a whole lot bigger.

Stay tuned.

Sunday: Time For Pro Football & The New York Times

The Cincinnati Bengals play the Cleveland Browns today at one o'clock at Paul Brown Stadium. How many states can have such a situation as two professional football teams playing each other, founded by the same man and in the stadium named after him? Is it any wonder that the Pro Football Hall of Fame is in Ohio. While the first pro team may have been the Canton Bulldogs, Paul Brown was one of the founders of modern football in America.

After that disappointing loss to the Oakland Raiders last week, which the coaches played to sit on a lead (stupid), let us hope that the players have some say in the game plan for today. The offensive coordinator of the Bengals needs to use the players he has to their full advantage. On paper, this game should not even be close. But, the Browns will give a lot of fight and try like hell to win their second game of the season. Bengals need to play to win, not sit on a few point margin.

Monday, I plan to talk about Senator Chris Dodd and the new legislation coming out off the Senate that will restrict the ability of the Fed to conduct monetary policy. Oh, I know everyone will be hardly able to wait to read that.

How about a picture of a level playing field for Sunday?

Stay tuned.

Saturday Is For Art

Well, I hope everyone had a nice Thanksgiving. I did not go out shopping on Black Friday. I went to the Cincinnati Art Museum to view the new Art Nouveau Jewelry & Glass exhibit and the Chinese scroll painting exhibit "Tigers and Carp". If you like beautiful Tiffany glass and beautifully designed jewelry, you will enjoy this exhibit. I haven't put up my gold fish paintings in a while, so why not go with them this Saturday. Nothing political, as we can all use a break from that stuff. On Friday the University of Cincinnati football team beat Illinois from the Big Ten, to take their season's record to 11-0. Next week they play Pitt at Pittsburgh. Good Luck Bearcats.

And now a word from our sponsor: SKI CINCINNATI t-shirts make excellent gifts for the Holidays. You can buy SKI CINCINNATI t-shirts at the following gift shops and store -- Contemporary Arts Center at 6th & Walnut and on-line from their web store; Cincinnati Museum Center at the old train station, Union Terminal; Cincinnati Art Museum in Eden Park; and Benchmark Outfitters in Blue Ash on Kenwood Rd.

Stay tuned.

Dubai's Dubai World Says Wait Six Months

Today is black Friday in America, and everyone knows what that means. Well, today is also Black Friday in Dubai and the world doesn't know what that means yet. Dubai's investment company Dubai World has asked its creditors, big banks around the world, if it can suspend paying on its debt for six months because it is out of cash. How much are the banks on the hook for? The people that know say $59 billion, with a "B". So, Europe and the United States now have to figure out what is the downside if Dubai World should default. When you owe $59 billion, believe me, the bankers will work with you. One small caveat, Dubai doesn't have any oil. This should be interesting to watch.

Stay tuned.

Happy Thanksgiving Everyone

Happy Thanksgiving to everyone.

If you want to check out some great photography, go to the web site pixelsbypaul.com I went to school with Paul about 50 years ago. So, if you like really nice photographs check him out.

Stay tuned.