Archive for the 'Foreign Policy' Category

Buffett’s Prediction on Effects of Growing Trade Deficit Turning Out to Be True

Posted on July 10, 2008, 8:32 am. Closed

Warren Buffett wrote an article for the November 10, 2003 Fortune about the negative consequences of America’s growing trade deficit. In the article, Buffett tells the story of the citizens of Squanderville and Thriftville. The citizens of Thriftville work hard to produce goods for which the Squanderville are willing to pay.

The Thriftville citizens accumulate a large amount of Squanderville bonds. The Thriftville citizens get nervous about the ability of Squanderville citizens to repay the IOUs, so Thriftville citizens decide to sell some of the bonds back to Squanderville and to use those proceeds to purchase Squanderville land, figuring that it would be harder for the Squanderville government to renege on physical land as opposed to paper IOUs. Pretty soon, Thriftville owns all Squanderville land.

America is Squanderville. Soveriegn wealth funds have been buying hundreds of millions of securities of American companies and American real estate. The New York Times has a recent story on how foreign investors are purchasing “trophies” and choice real estate. The recent purchase of the Chrysler Building by the government of Abu Dhabi is just one example. If we don’t want to be owned by foreign nations and we don’t want our grandchildren working to pay off our debts, per Bufffett’s advice we must attempt to correct the trade deficit.

But maybe we shouldn’t be worried. As Coyote Blog points out, America has experienced similar periods of angst, citing the 1980s panic of the Japanese buying up America. Nothing horrible happened then and perhaps nothing horrible will happen now.

Furthermore, Coyote Blog writes, “The fact is that holding our debt and owning US assets gives China (and other nations) a huge shared interest in our stability and continued prosperity.” This observation is true, but I still think we and our descendants are going to be working a lot harder and much longer in order to pay off our debts than if we had less debt.

Hamas is a Terrorist Group While Iran is Not?

Posted on April 16, 2008, 10:26 pm. Closed

Obama puts forward the “the same incoherent litmus test he mentioned a few days ago.” This is a test that “conveniently allows him to talk to Iran — a sovereign state … but otherwise guilty of the same sins he lists vis-a-vis Hamas — while ignoring Hamas lest it put him on the wrong side of pro-Israel voters.”

My question is how does one not consider Iran to be a terrorist organization? Yes, it has borders, yes it has a hierarchical structure unlike the network-based structure of a terrorist organization. But Iran still wants to DESTROY Israel. Iran is still funding terrorist groups, giving money to the families of suicide bombers, and training forces that are killing U.S. and allied soldiers.

To me, Iran is a terrorist organization dressed up as a state. Obama, Clinton, Carter, or the State Department can talk all they want with Iran. This won’t change Iran’s goals of ruling the middle-east and pushing the Jewish people into the sea. It took millions of lives and a world war to realize that Hitler wasn’t playing around. Will it take that much to force us to realize Iran isn’t playing around?

What’s even scarier nowadays is the realistic possibility that a so-called state can conceivably pass off a nuke to a terrorist organization who would then detonate it wherever it pleases. There would be no smoking gun and it would be nearly impossible to connect officially such an action to a “state.” Just by virtue of having borders and some form of centralized government, Iran can allow “unaffiliated” terrorist organizations do its dirty work while it can bask in one of the benefits of statehood, namely unending diplomacy and talks which further legitimizes an undeserving and dangerous terrorist organization state.

Durable Goods Orders Decreased

Posted on February 28, 2008, 9:28 am. Closed

Yesterday I read a long post from Market Ticker detailing some of the recent, distressing economic and business news. Here are some things that stuck out for me.

First, durable goods orders decreased 5.3% on the month and inventories are rising. Market Ticker says this is always a sign a recession is on the way (or at least evidence that people are cutting back on spending), which makes sense to me. People used to be buying lots of crap, manufacturers ramped up production bit by bit to meet demand. Now that the demand is no longer there because people are limiting their spending, inventories will naturally rise and products will not get shipped.

Second, he berates the short-sighted politicians for setting America up for an energy crisis. The fools have prohibited any nuclear energy development for the past 30 years. We’ve turned our food into energy and we have refused to drill for oil off our coasts, oil which we know is there.

Also, and a most interesting and scary prediction that there will be a war between China and Russia in the future:

Let’s talk geopolitical risk – what’s really driving metals prices. Its not talked about, but it should be. China has north of 1.2 billion people. Russia, which shares a border with China, has 140 million, or about 1/10th of China.

Russia has a net surplus of both oil and natural gas, and in addition has a surplus of land per-capita. China has a dearth of all three. So long as China can pay for what they need, this is not a serious problem.

But as we flush, to believe that China can turn to internal consumption and pick up the slack, with a per-capita income of under $2,000, where ours is more than 10 times as high, is pure fantasy.

I wouldn’t take that bet at any odds.

What I expect to happen is that China will eventually run out of ability to subsidize, and will turn to what nations have always historically turned to when faced with severe internal pressures and a resource-rich nation sharing a border with them.

Quite distressing news overall, but good news if you happen to be a bear.

Ron Paul and New Hampshire

Posted on November 6, 2007, 2:26 pm. Closed

Congressman Ron Paul had an excellent one-day fund raising take of $4 million. Not too bad for an anti-war Republican.

New Hampshire Republican Party Chairman Fergus Cullen told On Call today that Republican Ron Paul has a shot a shaking up the GOP contest in the first primary state. Cullen said that with Paul’s $4 million fundraising take yesterday, he legitimizes his candidacy. Also, the crusty Granite State is fervently anti-war, a sentiment shared by members of both parties.

Judging by Paul’s performance of late, I’m going to predict that he will win New Hampshire and maybe Iowa, but will fail in South Carolina and other Southern states. Paul will be this election’s McCain.

What Will Happen If/When We Leave Iraq?

Posted on July 12, 2007, 8:11 am. Closed

Despite how he hates how Iraq has long been mismanaged, Ralph Peters writes that there is not a sensible way of leaving Iraq that won’t undercut American security and won’t produce massive innocent casualties.Â Continue reading ‘What Will Happen If/When We Leave Iraq?’

A Canadian Cartoonist’s Take on Ron Paul

Posted on July 4, 2007, 12:04 pm. Closed

A Canadian cartoonist’s take on Ron Paul.Â I think it’s an accurate portrayal.

The Exception of Ron Paul

Posted on June 20, 2007, 12:11 pm. Closed

This is a good article about Congressman Ron Paul in The American Conservative. I feel like Ron Paul has better principles than any of the other Republicans out there. He is also much more principled than any other lawmaker out there (hence the “Ron Paul exception” which the article mentions). He’s right on nearly every issue, but my main beef with him is his stance on foreign policy. Continue reading ‘The Exception of Ron Paul’

Not Much Has Changed

Posted on June 19, 2007, 5:01 pm. Closed

Capitulation, Gullibility, Incompetence

Posted on June 18, 2007, 10:08 am. Closed

Last week I read an article entitled “How the Reagan Administration Taught Iran the Wrong Lessons.” I feel like I learned a lot about the U.S.’s dealings with Iran in the 80s and I was greatly saddened by what went on, especially so because this happened under Reagan. Our dealings with what the administration deemed to be “moderates” during the hostage situations and the constant reneging of promises are proof enough to me that Iran does not deserve anyone’s trust. Continue reading ‘Capitulation, Gullibility, Incompetence’