The day of reckoning has arrived. The safety net is shreadding and falling apart.
This year payouts will exceeds receipts.
Click here for story. Congress has emptied the coffers. Anyone that has been sitting around thinking their social security taxes have been sitting somewhere collecting interest, belongs in a loonie farm.
The system is broke.
Sorry to inform all the young people of the world, but you're going to have to pay in more and more and more to get less and less and less.
Congress is a bunch of thieves and hoodlums and crooks.
Throw them all out. Dems and Repubs. Not a dimes worth of difference in the two.
Thursday, March 25, 2010
Wednesday, March 17, 2010
I sat there in the Dnipro Hotel in Kiev in the fall of 2004. It was so cold outside but I sat there in the warmth of the lobby having champagne and enjoying the chamber music quartet. 
Outside were demonstrators in sub zero temperatures, demanding that the election of their new president be thrown out since he was a holdover former Communist tyrant. Finally after days of protesting the United States and other Western governments stepped in and forced a new election. 
In that election a very pro-Western and democratically inspired and free-market leader (with an American wife), Viktor Yushchenko was placed in office. And the people of Ukraine were promised great democratic reforms. My partners and I contributed a significant amount of money to this man's election in the hope that some real change would come to the way power was administered in the Ukraine and that with increased international commerce exchange, the people would see their life styles improved and the economy better. What happened next and over the next four years is a disgrace. First the US abandoned the new leader and any support. And then the new leader Yushchenko just became another power hungry politician trying to maintain his own position in light of the fact that since conditions had not improved he had lost the Orange Revolution support. So who was the loser in the presidential elections in Ukraine? On the surface, it is the prime minister, Yulia Tymoshenko, who finished at least 3pс behind the opposition leader Viktor Yanukovich. However, the well-informed internet resource Ukrainska Pravda takes a more nuanced view of the situation.
Tymoshenko lost a battle, but did not lose a war. As the prime minister, she still controls the government and thus the country's economy. Her loyalist Yuri Lutsenko, fired as interior minister, refused to let go of his control of the country's police. Tymoshenko herself refused to concede her defeat, using the same language she used in 2004, during the so-called Orange revolution.
At the time, the Western media, from Vancouver to Warsaw, just loved that language, believing every word of it. Tymoshenko was elevated to the status of Ukrainian Joan of Arch and Yanukovich was vilified as a "Kremlin's stooge".
Now Tymoshenko's conduct is an embarrassment, since this election was recognised as fair by the EU, the US and just about every possible monitoring organisation. An obvious questions sneaks into one's mind: what if in 2004 her motives were the same as now: trivial lust for power and not a mixture of democratic principle and idealistic nationalism, as the West believed in 2004-2005?
As the situation develops, this version appears to be closer to the truth, thus revealing the true losers of 2010 elections – Western experts and politicians, who believed Tymoshenko in 2004-2005.
The disastrous economic consequences of the Western-backed Orange governments in Ukraine are indisputable and recognised even by such former zealots of Orange revolution as the New York Times and Newsweek. One figure is telling enough: Ukrainian exports to the United States dropped by 90pc in the five years of Orange rule.
The usual objection to Tymoshenko's critics – "But now they have democracy!" – under closer inspection doesn't hold either. "Democracy without democrats" – a formula once applied to Weimar Germany – is even more applicable to Ukraine.
Indeed, one cannot call either former president Viktor Yushchenko nor Yulia Tymoshenko democrats. Democrats are ready to concede defeat and respect the rules of the game. This rarely happened with Yushchenko and Tymoshenko. In every situation they used every tool at their disposal to hold on to power.
These tools included dissolving a democratically elected parliament, making a mockery of justice and arranging sleazy media attacks against each other.
In this situation, Yanukovich's coming to power seems preferable for democracy, since nationalist opposition will remain stubborn and real, while Yanukovich's supporters might be scared away by Tymoshenko's vengeful authoritarianism.
The blank check which the West gave to Yushchenko and his Orange team in 2004-2005 did a terrible disservice to the Ukrainian nation. Instead of concentrating on joint movement towards Europe (which does not necessarily mean away from Russia), the Orange politicians polarised the nation, discredited democratic institutions, badly damaged their own economy and the economy of other European countries, disrupting supplies of Russian energy to the EU.
Isn't this a bit too high a price to pay for prejudice against Russia which lay at the core of Western support for the Orange revolution?
"In our enthusiasm to find others who appear to share our goals, we have allowed ourselves to be fooled into believing that anybody we dislike is by necessity illegitimate, that our enemy's enemy is our friend," writes professor Paul Robinson in Ottawa Citizen.
My old friend Ivan, the doorman at the Dnipro Hotel is probably not smiling today. His wages of $65.00 per month have probably not changed. And he probably still lives in the two bedroom apartment with his other 7 family members. One could only add that consequences could be especially bad if the perceived "enemy" (in the case of the Orange revolution, "imperialistic Russia") is not actually an enemy at all. Rossiyskaya Gazeta (Russia) Dmitry Babich is an RIA Novosti commentator
Monday, March 15, 2010
My new grand daughter Vivi.
Vivian "Vivi" Eleanor
Born March 13, at 3:15 pm.
9 pounds and 5 ounces and 20 inches tall.
Sweet as can be and her big sister is thrilled
for her arrival.
Sunday, March 14, 2010
The Coming Great war of Shites and Sunnis
I love reading Byron King's projections and forecast. His brilliance has often times been a great source of inspiration for me to do research of my own on issues and events that he examines through his lens and keyboard. To be added to his mail list, go to: http://dailyreckoning.com/whitelist-daily-reckoning/. Below
are his ideas and mine. In the future, they will be reality to every single living person on the face of the earth, whether they believe events in the Middle East affect them or not. The world's political landscape is going to change in soon-coming future from a war involving millions of combatants.
Byron King who is a Resource Expert for The Daily Reckoning wrote this past week:
. . . about a war 1,354 Years in the making. He calls it The "NEW" War and theorized that it could rocket prices of oil past $220 Before 2011.
I've followed these two fighting sides for a long time. And I have believed since 1979 that this was a war that would ultimately become the "mother of all wars". And yet, as the two sides have continued to align themselves against each other, no one in the press or Washington ever mentions the battle that is . . and will be . . taking place.
Mr. King asks the question: What could be eight times bigger than the wars in Iraq or Afghanistan — and lethal enough to at least DOUBLE the price of gas and oil next few years? Brace yourself for the "new" and bloody war nobody saw coming. Nobody in the Pentagon will talk openly about it. Nobody in the White House knows what to do.
This war will be be the deadliest surprise threat to world politics and the global economy of the coming years. And you should see there's not much new about it at all — the pressure's been building behind this for the last 1,354 years!
He imagines a volcano of blood. When it blows, we could see many people's savings get SLAMMED... the dollar thrown into a TAILSPIN... and, here's what will stun the still-recovering world economy, gas and oil prices doubling or even tripling by sometime in the soon-coming years. It's the last thing most people expect, from market pros to our stupid bumbling, act-smart-know-nothing-bumbling D.C. bureaucrats... but if nothing changes ... this is a page in future history books that's already writing itself. I hope that I am wrong. I suspect that I'm not. And the reason I believe I'm right is because even if the politcians and generals did admit to this war that is developing, they would have to admit that there is nothing in the world they can do to stop it from coming to a bloodbath. Eight key Islamic countries are hurtling headlong toward a bloody "new" war — with each other.
This could begin as early as the next 12 to 18 months. Or perhaps a few years from now. But IT WILL COME. IT IS A CERTAINTY. And it will affect every person on the face of the earth. And with no less than 66% of the world's key energy reserves right in the middle of the entire battlefield. It may sound impossible. But it's not. Even if I'm only half right, and we get an oil-state stalemate unlike anything the world has ever seen — oil could easily soar past the old high of $147.30 per barrel, well on its way to as much as $220... with gasoline bucking against a ceiling of $8 per gallon.
Long before $147 oil... before the war over 9/11 or the war in Afghanistan... before either war in Iraq, the 1979 Iran hostage crisis, or even the oil crisis of 1973. All the way back to a lamb dinner, served up one evening in the year 629 AD. There was a murder that night that has been changing the world every since, and is about to change it in a major way. Nobody could have known that the dinner they were about to eat would one day change history. Some say it was goat. Others say it was lamb. Either way, it was poisoned. And the guest of honor was Mohammed, the controversial founder of Islam.
It was just one bite, that's all it took. He tasted the poison and immediately spit it out. But it was too late. He would soon die, sparking a bitter and deadly divide. Because, when Mohammed died nobody could agree on who should take over. And his followers and descendents have been killing each other as a result ever since. For more information on this rivalry, click the link below on Muslim Sunni Shiite history.
On the one side, you've got the Sunni Muslims. They're the ones that run Saudi Arabia, Egypt, Jordan, and many of the other countries in the Middle East. They used to also run Iraq thru Saddam Hussein. On the other, you've got the Shia Muslims. It's the Shia that run Iran. And now, thanks to the brilliance of our own US government, they run Iraq, as well as Lebanon and Syria. Most people call them Shiites.
Think Protestants and Catholics in Northern Ireland... Serbs vs. Croats in Bosnia... or even the religious Thirty Years War that ripped apart Europe in the 16th century. For a excellent description of the differences between the two and their origins, I encourage you to read an article done by the History Network:
Click here for article on Sunni and Shiite Muslim differences.
This Sunni-Shia split has built up pressure now for the last 1,354 years. But it has especially come to full force since the end of the first world war when Western European culture began "infecting" Muslim culture in Egypt and other middle eastern countries. After World War 1 when the British came into the middle east after the fall of the Ottoman Empire, they brought with them every form imaginable of western decadence. The Shiites believe that the Sunni's are responsible for the defilement of their holy land.
But it's only now that this pressure has found its ultimate release — with Iran driving a new Shia uprising smack dab in the middle of the most dangerous place on Earth — the oil-soaked Middle East. And guess which radical Sunni muslim is sitting right next door to Iran? If you guessed Osama bin Laden you were right.
What's different is that too many in the West... right up to the White House and the Pentagon... don't "get" just how deep this Islam divide could go or how far it could run. The idea in Washington is to just make them all democratic countries and they will naturally just be a peace because they are free.
Unfortunately for the free world, most of the Shiites are in the area of the strongest concentration of the oil. And even if this fact is lost on most politicians and generals, it is not lost on bin Laden and his other Sunni extremist. This is a war for not just their faith, but their economic futures as well. And one terrorist with a grudge can do a lot of damage. Imagine what a 140 million of them could do when pushed too far?
Iran, all by itself, could even be a deadly force. But can you imagine what millions of Shiites with a 1,354-year old ax to grind could do? Perhaps it will be named The 162-Million-Man March?
Nobody knows exactly how many Shia there are right now in the Middle East. That's because in all but four Middle Eastern countries, Sunni leaders don't bother to count.
Sunni schools teach that Shiites aren't real Muslims. In most countries, Shias don't get a seat in government. They can't become judges or even testify in high courts. In Sunni-run Saudi Arabia, Shias and Sunni can't even marry. Oh by the way . . .thank you US for installing now a Shite controlled government in Iraq. Let me try for a minute to think of anything else you could do to make Bin Laden and his other Sunni-crazies even more angry at us?
For centuries, the Shia have been the underclass.
But now, for the first time in history, they see this as their chance to turn the tide. And how big a tide is it? Hands down, saber-rattling Iran has the most — 70 million Shia. But then you've got the "liberated" Shia of Iraq — 22 million. Plus as many as 2 million Shia in Iran-backed Lebanon. And up to 4 million Shia in Iran's top ally, Syria. Then you've got another 700,000 Shia in Kuwait... up to 500,000 Shia in Bahrain... up to 400,000 Shia in the United Arab Emirates... 300,000 Shia in Oman... and around 100,000 Shia in Qatar, according to the Pew Research Center in Washington. On top of that, as many as 10 million Shia in Yemen... another 7 million Shia in Azerbaijan... and 11 million Shia in Turkey... not to mention the combined 30 million Shia in Afghanistan and Pakistan.
Not all Shia want a revolution. In fact most don't. Most want a peaceful, but "undefiled" land to live in. But out of between the 147 million to 162 million Shia spread from Pakistan to Lebanon and Azerbaijan to Yemen, enough do that this is the river of "Secret Revenge" and common blood running through the entire Middle East.
The Sunnis are worried. Especially in Sunni-run Saudi Arabia. And especially now.
You must remember that Iran used to be Persia. At one point Persia was the biggest and most powerful empire in history! Iraq, Syria, Turkey, Egypt — even Israel — the Persians controlled them all. Along with all of Afghanistan and Pakistan and most of the oil-rich coast of the Caspian. For 300 years, Persian armies held off the Roman Empire. Their scholars walked with Aristotle and Plato. And influenced Greek art.
It was the Persians who invented chess. And the windmill. Not to mention bricks, algebra, trigonometry, and wine. The bottom line is... no Empire forgets its past glory. The Iranians resent losing theirs. But now they see a chance to get it back.
The nuclear bomb? Tehran's crackpot leaders don't just want it to scare Israel. They want it so they can throw a dark shadow over their Sunni Arab neighbors, too!
With total control of the Hormuz "oil chokepoint" in the Persian Gulf
and new power in "liberated" Iraq, the Iranians have a brand new foothold
for kicking off the long-awaited "Shia Revolution."
It is important to notice two things about the "battlefield".
First, you'll see how Iran's Shia influence has spilled across the border into southern Iraq. Southern Iraq is where you'll find six of Iraq's eight "Supergiant" oil fields. It's also where you'll find a key border with Shia Islam's mortal enemy — Saudi Arabia. Saudi Arabia is Sunni controlled by Sunni aristocracy.
For eight years back in the 1980s, Saudi Arabia helped Iraq wage a bloody war against Iran. Along with other Sunni governments, the Saudis even gave Saddam over $47 billion to launch missiles and nerve gas attacks over the Iranian border. Also, Sadam was a Sunni. That's one reason the United States helped fund him in his battle with Iraq because we wanted the Shiites in Iran knocked down. Of course . . go figure this one out . . . the United States is the one (under Jimmy-sell-our-allies-down-the-river-Carter) who tore down the Shah of Iran and helped install the present Shiite government that we are now so feverently trying to destroy?
Iran hasn't forgotten or forgiven that we tried to help Saddam destroy their country.
(Imagine if Canada or Mexico had given money to Japan to help them bomb Pearl Harbor. Iran has waited to make the Saudis pay — and now they have their chance.)
"Iran is clearly seen as a very serious threat by those on the other side of the Gulf front." — Gen. David Petraeus, Jan. 31, 2010
It is also important to see and know that Iran has almost total control over the Strait of Hormuz. Hormuz is the tight waterway that connects the Persian Gulf to the rest of the world. Over 17 million barrels of oil have to pass through Hormuz every day. That's 40% of all the oil shipped in the world. And 90% of all the daily oil shipments from the entire Middle East. With Hormuz alone, Iran could cripple the world overnight.
Today, Iran backs Shia militants in Iraq. They give them money and guns. They've even helped Shia politicians take over the Iraqi government. Why? Because gaining control in Iraq takes the Iranians one step closer in their twisted plot for geographical superiority from Iran, through Iraq thru Saudi Arabia to Yemen.
This might help to explain the sudden importance of Yemen and why it is in the news almost every day. The recent attempted plane terrorism during Christmas 2009 invloved an Al Quida trained terrorist who came from Bin Laden's new training ground . . .Yemen.
Hence the decision by The Pentagon to triple its budget on Yemen. Our top U.S. General Patraeus just had a not-so-secret meeting with Yemen's president. And our own State Department calls Yemen a “threat... to global stability.” Even ABC News just called Yemen the next "top target" in the terror war and a "near-perfect haven for terrorists." Obama just sent Yemen our troops, ships, and weapons. Yemen's on/off Shia revolution gives and "Gate of Tears" oil chokepoint
could soon give Iran a strategic "backdoor" attack point into Saudi Arabia
Yemen might be a failed country... with a collapsing government, a shrinking oil supply, an exploding population and not much of anything else but lawlessness and chaos. Estimates are that their own oil production will cease in less than 10 years. But in that same time their population will grow 20%. But what Yemen does have is position. It sits just on the tip of the Arab peninsula... south of another key Saudi border and on the coast of another key oil strait called Bab-el-Mandeb. That name means the "Gate of Tears."
"Nature," goes the old saying, "abhors a vacuum."
For instance, when a failed assassin's bullet burst a blood vessel in Vladimir Lenin's brain in 1922... madman Josef Stalin quickly stepped in to fill the void. Likewise when the Weimar Republic collapsed in 1933... and Hitler stepped into power. Today there's a new void about to be filled — in the ravaged Middle East — and the lethal force that's stepping up to fill it could plunge the entire region into a "new" Islamic war. If that happens, nearly 66% of the world's oil supply will get caught in the crosshairs. And like Hormuz, most oil states on the Red Sea can't get a drop of oil out without shipping it through the Bab-el-Mandeb. Over 3.3 million barrels go through every day. Many energy experts agree that blocking this chokepoint alone could slap a $30 "political premium" on the price of every barrel of oil... but there's an even bigger threat taking shape.
For the last six years, Yemen has fought a vicious and bloody war with Shia rebels. These rebels are poor. There's no way, says a Yemen general, these rebels "could fund and fight this war with pomegranates and grapes... no doubt there is Iranian support."
Iran loves to buy loyalty. Take the $1 billion Tehran now "donates" every year to Hezbollah terrorists in Lebanon. Or the billions they gave Syria's Shia president to build cement factories, car factories, power plants, and storage silos. In return, Iran gets Hezbollah's Arabic-speaking terrorists to run militant Shia training camps in Iraq. And gets Syria to distribute Iran's money and weapons to others in the Shia network.
The secret money Iran sends to Shia rebels in Yemen could soon have a payoff too — by opening up another route for "backdoor" Shia access into Saudi Arabia. Yemen's rebels have already hit towns across the Saudi border. And the Saudis have hit back, losing dozens of troops in the process. We’re just in the first innings of this one.
How bad is it now? So far, 50 Saudi schools along the border have had to close. Another 240 border towns have already been evacuated. And Saudi jets have already dropped bombs in Yemen.
What exactly has the Saudis running scared? It is that they know that the ultimate prize in this middle eastern war is not religious but economic goals. Everybody in the world . . . and above all else Iran . . .wants to dominate and control and rule Saudi Arabia.
It may seem like a silly analogy. But it's true. In the game of Risk where players play for world domination, I have never seen anyone win, who did not first gain control of the Middle East.
I don't think for a minute that Iran's plot can actually succeed. Their greatest threat is not the United States or some silly blockade that the US threatens to throw up. The fact is we have to have their oil. We're not going to cut off their source of income. However the tiny mouse that will not sit still is our little ally of Israel. (Note: That's the same little ally that our current president is not being such a strong ally too). Israel is NOT going to let Iran get a nuclear bomb. And they have just been sitting idly by waiting on the US and Western Europe to "negotiate" away the bomb. And while we try and negotiate, the Iranians go on building and researching and developing. In the end . . I believe, the negotiations and blockades will fail. And Israel will quite simply, quickly, calmly, and efficiently go in and bomb most of what is now Iran off the face of the globe.
But the threat alone of Iran trying to take over Saudi Arabia from the south, could be enough to kick oil much higher. But it's hard for me to imagine how high oil might go if Israel bombs Iran. $300.00? $400.00?
When could this happen?
Our CIA, Britain's M16, and other top spy agencies say Iran could have a working nuclear bomb as soon as April 2011. The Times of London uncovered a confidential document that says Iran already has a "neutron initiator" ready to test. That's the part you need to trigger a warhead. And Der Spiegel, the German magazine, says Iran may even have the tech and material to build a simple nuclear bomb before the end of THIS year. But the Bomb is just a beginning.
Even if the go ahead to build a nuke never comes from Iran's top cleric, the more immediate danger is a wildfire of Shia-Sunni unrest... starting in Iran's new hotbeds of Shia support... and spreading across the rest of the Sunni-run oil states... with the richest oil fields in the world's richest oil nation as the final battleground.
Iran has a Shia network that reaches from Afghanistan to Lebanon once again... more connections building along the Persian Gulf... Yemeni Shias to the south... and Shia connections along the oil rich Caspian Sea. You could see this spread to the nearly two million Shia that live and work on Saudi Arabia's oil fields very soon. Even though that's exactly what the Saudis — and our own Pentagon — hope will never happen. Very soon I believe, Iran will have its mortal enemy, Saudi Arabia, surrounded — by millions of Shia.
Right now, big and small Gulf states are piling up weapons, stocking anti-missile batteries, and sandbagging their oil terminals, ports, and water desalinization plants. Abu Dhabi alone has already bought $17 billion worth of U.S. anti-missile hardware. And the United Arab Emirates and Saudi Arabia just splurged on weapons, to the tune of $25 billion.
Our own F-16 fighter jets, Patriot missile systems, giant cruisers and up to 20,000 more U.S. troops are quietly digging in for an epic fight... that could spread past Iraq and Yemen... and even into Qatar, the United Arab Emirates, and Bahrain. All to get ready for what could be the fight of a lifetime.
But no matter how it starts, Saudi Arabia is where it's most likely to end up. Not only is Saudi Arabia home to Mecca, Islam's holiest place... but it's also home to the corrupt and U.S.-allied Royal House of Saud, considered an insult to all Islam. In a country where they'll cut off your hand for stealing and whip you for holding a glass of whiskey... Saudi princes gorge on cocaine and prostitutes, gambling, palaces, and more.
All while the vast Saudi underclass starves on just $6,000 per year and 30% unemployment. And as many as two million of that underclass is Shia. With a 1,354-year-old ax to grind and billions of dollars in oil revenues as the prize.
Iran is ready to assert its place in the world. Think Japan or Germany in the 1930s. The threat is there, it's large, and it's not going away anytime soon.
Have no illusions — any military response, on any front — could only accelerate the spike in oil prices. So the first thing you're going to want to do is simply get out of the way.
But you're also going to make defensive moves with your money. So what do you want to have your money invested in? GM or Citibank or Savings Bonds or Oil? MMMMMMMMMM? Let me think about that?
are his ideas and mine. In the future, they will be reality to every single living person on the face of the earth, whether they believe events in the Middle East affect them or not. The world's political landscape is going to change in soon-coming future from a war involving millions of combatants.
Byron King who is a Resource Expert for The Daily Reckoning wrote this past week:
. . . about a war 1,354 Years in the making. He calls it The "NEW" War and theorized that it could rocket prices of oil past $220 Before 2011.
I've followed these two fighting sides for a long time. And I have believed since 1979 that this was a war that would ultimately become the "mother of all wars". And yet, as the two sides have continued to align themselves against each other, no one in the press or Washington ever mentions the battle that is . . and will be . . taking place.
Mr. King asks the question: What could be eight times bigger than the wars in Iraq or Afghanistan — and lethal enough to at least DOUBLE the price of gas and oil next few years? Brace yourself for the "new" and bloody war nobody saw coming. Nobody in the Pentagon will talk openly about it. Nobody in the White House knows what to do.
This war will be be the deadliest surprise threat to world politics and the global economy of the coming years. And you should see there's not much new about it at all — the pressure's been building behind this for the last 1,354 years!
He imagines a volcano of blood. When it blows, we could see many people's savings get SLAMMED... the dollar thrown into a TAILSPIN... and, here's what will stun the still-recovering world economy, gas and oil prices doubling or even tripling by sometime in the soon-coming years. It's the last thing most people expect, from market pros to our stupid bumbling, act-smart-know-nothing-bumbling D.C. bureaucrats... but if nothing changes ... this is a page in future history books that's already writing itself. I hope that I am wrong. I suspect that I'm not. And the reason I believe I'm right is because even if the politcians and generals did admit to this war that is developing, they would have to admit that there is nothing in the world they can do to stop it from coming to a bloodbath. Eight key Islamic countries are hurtling headlong toward a bloody "new" war — with each other.
This could begin as early as the next 12 to 18 months. Or perhaps a few years from now. But IT WILL COME. IT IS A CERTAINTY. And it will affect every person on the face of the earth. And with no less than 66% of the world's key energy reserves right in the middle of the entire battlefield. It may sound impossible. But it's not. Even if I'm only half right, and we get an oil-state stalemate unlike anything the world has ever seen — oil could easily soar past the old high of $147.30 per barrel, well on its way to as much as $220... with gasoline bucking against a ceiling of $8 per gallon.
Long before $147 oil... before the war over 9/11 or the war in Afghanistan... before either war in Iraq, the 1979 Iran hostage crisis, or even the oil crisis of 1973. All the way back to a lamb dinner, served up one evening in the year 629 AD. There was a murder that night that has been changing the world every since, and is about to change it in a major way. Nobody could have known that the dinner they were about to eat would one day change history. Some say it was goat. Others say it was lamb. Either way, it was poisoned. And the guest of honor was Mohammed, the controversial founder of Islam.
It was just one bite, that's all it took. He tasted the poison and immediately spit it out. But it was too late. He would soon die, sparking a bitter and deadly divide. Because, when Mohammed died nobody could agree on who should take over. And his followers and descendents have been killing each other as a result ever since. For more information on this rivalry, click the link below on Muslim Sunni Shiite history.
On the one side, you've got the Sunni Muslims. They're the ones that run Saudi Arabia, Egypt, Jordan, and many of the other countries in the Middle East. They used to also run Iraq thru Saddam Hussein. On the other, you've got the Shia Muslims. It's the Shia that run Iran. And now, thanks to the brilliance of our own US government, they run Iraq, as well as Lebanon and Syria. Most people call them Shiites.
Think Protestants and Catholics in Northern Ireland... Serbs vs. Croats in Bosnia... or even the religious Thirty Years War that ripped apart Europe in the 16th century. For a excellent description of the differences between the two and their origins, I encourage you to read an article done by the History Network:
Click here for article on Sunni and Shiite Muslim differences.
This Sunni-Shia split has built up pressure now for the last 1,354 years. But it has especially come to full force since the end of the first world war when Western European culture began "infecting" Muslim culture in Egypt and other middle eastern countries. After World War 1 when the British came into the middle east after the fall of the Ottoman Empire, they brought with them every form imaginable of western decadence. The Shiites believe that the Sunni's are responsible for the defilement of their holy land.
But it's only now that this pressure has found its ultimate release — with Iran driving a new Shia uprising smack dab in the middle of the most dangerous place on Earth — the oil-soaked Middle East. And guess which radical Sunni muslim is sitting right next door to Iran? If you guessed Osama bin Laden you were right.
What's different is that too many in the West... right up to the White House and the Pentagon... don't "get" just how deep this Islam divide could go or how far it could run. The idea in Washington is to just make them all democratic countries and they will naturally just be a peace because they are free.
Unfortunately for the free world, most of the Shiites are in the area of the strongest concentration of the oil. And even if this fact is lost on most politicians and generals, it is not lost on bin Laden and his other Sunni extremist. This is a war for not just their faith, but their economic futures as well. And one terrorist with a grudge can do a lot of damage. Imagine what a 140 million of them could do when pushed too far?
Iran, all by itself, could even be a deadly force. But can you imagine what millions of Shiites with a 1,354-year old ax to grind could do? Perhaps it will be named The 162-Million-Man March?
Nobody knows exactly how many Shia there are right now in the Middle East. That's because in all but four Middle Eastern countries, Sunni leaders don't bother to count.
Sunni schools teach that Shiites aren't real Muslims. In most countries, Shias don't get a seat in government. They can't become judges or even testify in high courts. In Sunni-run Saudi Arabia, Shias and Sunni can't even marry. Oh by the way . . .thank you US for installing now a Shite controlled government in Iraq. Let me try for a minute to think of anything else you could do to make Bin Laden and his other Sunni-crazies even more angry at us?
For centuries, the Shia have been the underclass.
But now, for the first time in history, they see this as their chance to turn the tide. And how big a tide is it? Hands down, saber-rattling Iran has the most — 70 million Shia. But then you've got the "liberated" Shia of Iraq — 22 million. Plus as many as 2 million Shia in Iran-backed Lebanon. And up to 4 million Shia in Iran's top ally, Syria. Then you've got another 700,000 Shia in Kuwait... up to 500,000 Shia in Bahrain... up to 400,000 Shia in the United Arab Emirates... 300,000 Shia in Oman... and around 100,000 Shia in Qatar, according to the Pew Research Center in Washington. On top of that, as many as 10 million Shia in Yemen... another 7 million Shia in Azerbaijan... and 11 million Shia in Turkey... not to mention the combined 30 million Shia in Afghanistan and Pakistan.
Not all Shia want a revolution. In fact most don't. Most want a peaceful, but "undefiled" land to live in. But out of between the 147 million to 162 million Shia spread from Pakistan to Lebanon and Azerbaijan to Yemen, enough do that this is the river of "Secret Revenge" and common blood running through the entire Middle East.
The Sunnis are worried. Especially in Sunni-run Saudi Arabia. And especially now.
You must remember that Iran used to be Persia. At one point Persia was the biggest and most powerful empire in history! Iraq, Syria, Turkey, Egypt — even Israel — the Persians controlled them all. Along with all of Afghanistan and Pakistan and most of the oil-rich coast of the Caspian. For 300 years, Persian armies held off the Roman Empire. Their scholars walked with Aristotle and Plato. And influenced Greek art.
It was the Persians who invented chess. And the windmill. Not to mention bricks, algebra, trigonometry, and wine. The bottom line is... no Empire forgets its past glory. The Iranians resent losing theirs. But now they see a chance to get it back.
The nuclear bomb? Tehran's crackpot leaders don't just want it to scare Israel. They want it so they can throw a dark shadow over their Sunni Arab neighbors, too!
With total control of the Hormuz "oil chokepoint" in the Persian Gulf
and new power in "liberated" Iraq, the Iranians have a brand new foothold
for kicking off the long-awaited "Shia Revolution."
It is important to notice two things about the "battlefield".
First, you'll see how Iran's Shia influence has spilled across the border into southern Iraq. Southern Iraq is where you'll find six of Iraq's eight "Supergiant" oil fields. It's also where you'll find a key border with Shia Islam's mortal enemy — Saudi Arabia. Saudi Arabia is Sunni controlled by Sunni aristocracy.
For eight years back in the 1980s, Saudi Arabia helped Iraq wage a bloody war against Iran. Along with other Sunni governments, the Saudis even gave Saddam over $47 billion to launch missiles and nerve gas attacks over the Iranian border. Also, Sadam was a Sunni. That's one reason the United States helped fund him in his battle with Iraq because we wanted the Shiites in Iran knocked down. Of course . . go figure this one out . . . the United States is the one (under Jimmy-sell-our-allies-down-the-river-Carter) who tore down the Shah of Iran and helped install the present Shiite government that we are now so feverently trying to destroy?
Iran hasn't forgotten or forgiven that we tried to help Saddam destroy their country.
(Imagine if Canada or Mexico had given money to Japan to help them bomb Pearl Harbor. Iran has waited to make the Saudis pay — and now they have their chance.)
"Iran is clearly seen as a very serious threat by those on the other side of the Gulf front." — Gen. David Petraeus, Jan. 31, 2010
It is also important to see and know that Iran has almost total control over the Strait of Hormuz. Hormuz is the tight waterway that connects the Persian Gulf to the rest of the world. Over 17 million barrels of oil have to pass through Hormuz every day. That's 40% of all the oil shipped in the world. And 90% of all the daily oil shipments from the entire Middle East. With Hormuz alone, Iran could cripple the world overnight.
Today, Iran backs Shia militants in Iraq. They give them money and guns. They've even helped Shia politicians take over the Iraqi government. Why? Because gaining control in Iraq takes the Iranians one step closer in their twisted plot for geographical superiority from Iran, through Iraq thru Saudi Arabia to Yemen.
This might help to explain the sudden importance of Yemen and why it is in the news almost every day. The recent attempted plane terrorism during Christmas 2009 invloved an Al Quida trained terrorist who came from Bin Laden's new training ground . . .Yemen.
Hence the decision by The Pentagon to triple its budget on Yemen. Our top U.S. General Patraeus just had a not-so-secret meeting with Yemen's president. And our own State Department calls Yemen a “threat... to global stability.” Even ABC News just called Yemen the next "top target" in the terror war and a "near-perfect haven for terrorists." Obama just sent Yemen our troops, ships, and weapons. Yemen's on/off Shia revolution gives and "Gate of Tears" oil chokepoint
could soon give Iran a strategic "backdoor" attack point into Saudi Arabia
Yemen might be a failed country... with a collapsing government, a shrinking oil supply, an exploding population and not much of anything else but lawlessness and chaos. Estimates are that their own oil production will cease in less than 10 years. But in that same time their population will grow 20%. But what Yemen does have is position. It sits just on the tip of the Arab peninsula... south of another key Saudi border and on the coast of another key oil strait called Bab-el-Mandeb. That name means the "Gate of Tears."
"Nature," goes the old saying, "abhors a vacuum."
For instance, when a failed assassin's bullet burst a blood vessel in Vladimir Lenin's brain in 1922... madman Josef Stalin quickly stepped in to fill the void. Likewise when the Weimar Republic collapsed in 1933... and Hitler stepped into power. Today there's a new void about to be filled — in the ravaged Middle East — and the lethal force that's stepping up to fill it could plunge the entire region into a "new" Islamic war. If that happens, nearly 66% of the world's oil supply will get caught in the crosshairs. And like Hormuz, most oil states on the Red Sea can't get a drop of oil out without shipping it through the Bab-el-Mandeb. Over 3.3 million barrels go through every day. Many energy experts agree that blocking this chokepoint alone could slap a $30 "political premium" on the price of every barrel of oil... but there's an even bigger threat taking shape.
For the last six years, Yemen has fought a vicious and bloody war with Shia rebels. These rebels are poor. There's no way, says a Yemen general, these rebels "could fund and fight this war with pomegranates and grapes... no doubt there is Iranian support."
Iran loves to buy loyalty. Take the $1 billion Tehran now "donates" every year to Hezbollah terrorists in Lebanon. Or the billions they gave Syria's Shia president to build cement factories, car factories, power plants, and storage silos. In return, Iran gets Hezbollah's Arabic-speaking terrorists to run militant Shia training camps in Iraq. And gets Syria to distribute Iran's money and weapons to others in the Shia network.
The secret money Iran sends to Shia rebels in Yemen could soon have a payoff too — by opening up another route for "backdoor" Shia access into Saudi Arabia. Yemen's rebels have already hit towns across the Saudi border. And the Saudis have hit back, losing dozens of troops in the process. We’re just in the first innings of this one.
How bad is it now? So far, 50 Saudi schools along the border have had to close. Another 240 border towns have already been evacuated. And Saudi jets have already dropped bombs in Yemen.
What exactly has the Saudis running scared? It is that they know that the ultimate prize in this middle eastern war is not religious but economic goals. Everybody in the world . . . and above all else Iran . . .wants to dominate and control and rule Saudi Arabia.
It may seem like a silly analogy. But it's true. In the game of Risk where players play for world domination, I have never seen anyone win, who did not first gain control of the Middle East.
I don't think for a minute that Iran's plot can actually succeed. Their greatest threat is not the United States or some silly blockade that the US threatens to throw up. The fact is we have to have their oil. We're not going to cut off their source of income. However the tiny mouse that will not sit still is our little ally of Israel. (Note: That's the same little ally that our current president is not being such a strong ally too). Israel is NOT going to let Iran get a nuclear bomb. And they have just been sitting idly by waiting on the US and Western Europe to "negotiate" away the bomb. And while we try and negotiate, the Iranians go on building and researching and developing. In the end . . I believe, the negotiations and blockades will fail. And Israel will quite simply, quickly, calmly, and efficiently go in and bomb most of what is now Iran off the face of the globe.
But the threat alone of Iran trying to take over Saudi Arabia from the south, could be enough to kick oil much higher. But it's hard for me to imagine how high oil might go if Israel bombs Iran. $300.00? $400.00?
When could this happen?
Our CIA, Britain's M16, and other top spy agencies say Iran could have a working nuclear bomb as soon as April 2011. The Times of London uncovered a confidential document that says Iran already has a "neutron initiator" ready to test. That's the part you need to trigger a warhead. And Der Spiegel, the German magazine, says Iran may even have the tech and material to build a simple nuclear bomb before the end of THIS year. But the Bomb is just a beginning.
Even if the go ahead to build a nuke never comes from Iran's top cleric, the more immediate danger is a wildfire of Shia-Sunni unrest... starting in Iran's new hotbeds of Shia support... and spreading across the rest of the Sunni-run oil states... with the richest oil fields in the world's richest oil nation as the final battleground.
Iran has a Shia network that reaches from Afghanistan to Lebanon once again... more connections building along the Persian Gulf... Yemeni Shias to the south... and Shia connections along the oil rich Caspian Sea. You could see this spread to the nearly two million Shia that live and work on Saudi Arabia's oil fields very soon. Even though that's exactly what the Saudis — and our own Pentagon — hope will never happen. Very soon I believe, Iran will have its mortal enemy, Saudi Arabia, surrounded — by millions of Shia.
Right now, big and small Gulf states are piling up weapons, stocking anti-missile batteries, and sandbagging their oil terminals, ports, and water desalinization plants. Abu Dhabi alone has already bought $17 billion worth of U.S. anti-missile hardware. And the United Arab Emirates and Saudi Arabia just splurged on weapons, to the tune of $25 billion.
Our own F-16 fighter jets, Patriot missile systems, giant cruisers and up to 20,000 more U.S. troops are quietly digging in for an epic fight... that could spread past Iraq and Yemen... and even into Qatar, the United Arab Emirates, and Bahrain. All to get ready for what could be the fight of a lifetime.
But no matter how it starts, Saudi Arabia is where it's most likely to end up. Not only is Saudi Arabia home to Mecca, Islam's holiest place... but it's also home to the corrupt and U.S.-allied Royal House of Saud, considered an insult to all Islam. In a country where they'll cut off your hand for stealing and whip you for holding a glass of whiskey... Saudi princes gorge on cocaine and prostitutes, gambling, palaces, and more.
All while the vast Saudi underclass starves on just $6,000 per year and 30% unemployment. And as many as two million of that underclass is Shia. With a 1,354-year-old ax to grind and billions of dollars in oil revenues as the prize.
Iran is ready to assert its place in the world. Think Japan or Germany in the 1930s. The threat is there, it's large, and it's not going away anytime soon.
Have no illusions — any military response, on any front — could only accelerate the spike in oil prices. So the first thing you're going to want to do is simply get out of the way.
But you're also going to make defensive moves with your money. So what do you want to have your money invested in? GM or Citibank or Savings Bonds or Oil? MMMMMMMMMM? Let me think about that?
the next revolution?
The Patsy Revolt of 2010
Bill Bonner writing from Mumbai, India, wrote: "Masked youths...attacked the head of Greece's largest trade union, who was addressing the crowd, and hurled stones at the police. GSEE union boss Yiannis Panagopoulos traded blows with the rioters before being whisked away, bloodied and with torn clothes."
The Daily Mail account put the blame for these disturbances on Germany's finance minister, who warned the Greeks that "the German government does not intend to give a cent." At least Bild, a popular German newspaper, was trying to be helpful. It suggested that Greece sell Corfu...and that Greeks get up earlier and work harder.
Meanwhile, from Iceland comes news that every voter with an IQ above air temperature has cast his ballot against a bailout plan. The Icelanders were slated to make good $5.3 billion in bank losses. But why shackle common voters to the banks' losses? The plan was so outrageous and so unpopular that Iceland's normally compliant Prime Minister called for a referendum. Given a chance to vote on it, 93% said no. The other 7% probably read it wrong.
Insurrection is in the air. A revolution in this overspending, mismanaged countries is brewing. In England, government employees are preparing the biggest strike since the '80s. In America, dissatisfaction with Congress is at record highs; four out of five of those polled say, "Nothing can be accomplished in Washington." And yet here we are in watching and waiting, and I suspect we will see 90% or more of the current House of Representatives incumbents re-elected in the fall.
Herewith, an attempt to deconstruct the rebel yell. By way of preview, it's not the principle of the thing, we conclude; it's the money.
There are more clowns in economics than in the circus. They invented an economic model that has been very popular for more than 50 years - particularly in the US and Britain. It began with a bogus insight; John Maynard Keynes thought consumer spending was the key to prosperity; he saw savings as a threat. He had it backwards. Consumer spending is made possible by savings, investment and hard work - not the other way around. Then, William Phillips thought he saw a cause and effect relationship between inflation and employment; increase prices and you increase employment too, he said. But I believe he was wrong too.
Jacques Rueff had already explained that the Phillips Curve was just a flimflam. Inflation surreptitiously reduced wages. It was lower wages that made it easier to hire people, not enlightened central bank management. But the scam proved attractive. The economy has been biased towards inflation ever since.
Economists enjoyed the illusion of competence; they could hold their heads up at cocktail parties and pretend to know what they were talking about. Now they were movers and shakers, not just observers. The new theories seemed to give everyone what they most wanted. Politicians could spend even more money that didn't belong to them. Consumers could enjoy a standard of living they couldn't afford. And the financial industry could earn huge fees by selling debt to people who couldn't pay it back.
Never before had so many people been so happily engaged in acts of reckless larceny and legerdemain. But as the system aged, its promises increased. Beginning in the '30s, the government took it upon itself to guarantee the essentials in life - retirement, employment, and to some extent, health care. These were expanded over the years to include minimum salary levels, unemployment compensation, disability payments, free drugs, food stamps and so forth. Households no longer needed to save.
As time wore on, more and more people lived at someone else's expense. Lobbying and lawyering became lucrative professions. Bucket shops and banks neared respectability. Every imperfection was a call for legislation. Every traffic accident was an opportunity for wealth redistribution. And every trend was fully leveraged.
If there was anyone still solvent in America or Britain in the 21st century, it was not the fault of the banks. They invented subprime loans and securitizations to profit from segments of the market that had theretofore been spared. By 2005 even jobless people could get themselves into debt. Then, the bankers found ways to hide debt...and ways to allow the public sector to borrow more heavily. Goldman Sachs did for Greece essentially what it had done for the subprime borrowers in the private sector - it helped them to go broke.
As long as people thought they were getting something for nothing, this economic model enjoyed wide support. But now that they are getting nothing for something, the masses are unhappy. Half the US states are insolvent. Nearly all of them are preparing to increase taxes. In Europe too, taxes are going up. Services are going down. And taxpayers are being asked to pay for the banks' losses...and pay interest on money spent years ago. Until now, they were borrowing money that would have to be repaid sometime in the future. But today is the tomorrow they didn't worry about yesterday. So, the patsies are in revolt.
Several countries are already past the point of no return. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.
The rioters can go home, in other words. The system we have taken for granted for so long should . . . and will collapse on its own.
Bill Bonner writing from Mumbai, India, wrote: "Masked youths...attacked the head of Greece's largest trade union, who was addressing the crowd, and hurled stones at the police. GSEE union boss Yiannis Panagopoulos traded blows with the rioters before being whisked away, bloodied and with torn clothes."
The Daily Mail account put the blame for these disturbances on Germany's finance minister, who warned the Greeks that "the German government does not intend to give a cent." At least Bild, a popular German newspaper, was trying to be helpful. It suggested that Greece sell Corfu...and that Greeks get up earlier and work harder.
Meanwhile, from Iceland comes news that every voter with an IQ above air temperature has cast his ballot against a bailout plan. The Icelanders were slated to make good $5.3 billion in bank losses. But why shackle common voters to the banks' losses? The plan was so outrageous and so unpopular that Iceland's normally compliant Prime Minister called for a referendum. Given a chance to vote on it, 93% said no. The other 7% probably read it wrong.
Insurrection is in the air. A revolution in this overspending, mismanaged countries is brewing. In England, government employees are preparing the biggest strike since the '80s. In America, dissatisfaction with Congress is at record highs; four out of five of those polled say, "Nothing can be accomplished in Washington." And yet here we are in watching and waiting, and I suspect we will see 90% or more of the current House of Representatives incumbents re-elected in the fall.
Herewith, an attempt to deconstruct the rebel yell. By way of preview, it's not the principle of the thing, we conclude; it's the money.
There are more clowns in economics than in the circus. They invented an economic model that has been very popular for more than 50 years - particularly in the US and Britain. It began with a bogus insight; John Maynard Keynes thought consumer spending was the key to prosperity; he saw savings as a threat. He had it backwards. Consumer spending is made possible by savings, investment and hard work - not the other way around. Then, William Phillips thought he saw a cause and effect relationship between inflation and employment; increase prices and you increase employment too, he said. But I believe he was wrong too.
Jacques Rueff had already explained that the Phillips Curve was just a flimflam. Inflation surreptitiously reduced wages. It was lower wages that made it easier to hire people, not enlightened central bank management. But the scam proved attractive. The economy has been biased towards inflation ever since.
Economists enjoyed the illusion of competence; they could hold their heads up at cocktail parties and pretend to know what they were talking about. Now they were movers and shakers, not just observers. The new theories seemed to give everyone what they most wanted. Politicians could spend even more money that didn't belong to them. Consumers could enjoy a standard of living they couldn't afford. And the financial industry could earn huge fees by selling debt to people who couldn't pay it back.
Never before had so many people been so happily engaged in acts of reckless larceny and legerdemain. But as the system aged, its promises increased. Beginning in the '30s, the government took it upon itself to guarantee the essentials in life - retirement, employment, and to some extent, health care. These were expanded over the years to include minimum salary levels, unemployment compensation, disability payments, free drugs, food stamps and so forth. Households no longer needed to save.
As time wore on, more and more people lived at someone else's expense. Lobbying and lawyering became lucrative professions. Bucket shops and banks neared respectability. Every imperfection was a call for legislation. Every traffic accident was an opportunity for wealth redistribution. And every trend was fully leveraged.
If there was anyone still solvent in America or Britain in the 21st century, it was not the fault of the banks. They invented subprime loans and securitizations to profit from segments of the market that had theretofore been spared. By 2005 even jobless people could get themselves into debt. Then, the bankers found ways to hide debt...and ways to allow the public sector to borrow more heavily. Goldman Sachs did for Greece essentially what it had done for the subprime borrowers in the private sector - it helped them to go broke.
As long as people thought they were getting something for nothing, this economic model enjoyed wide support. But now that they are getting nothing for something, the masses are unhappy. Half the US states are insolvent. Nearly all of them are preparing to increase taxes. In Europe too, taxes are going up. Services are going down. And taxpayers are being asked to pay for the banks' losses...and pay interest on money spent years ago. Until now, they were borrowing money that would have to be repaid sometime in the future. But today is the tomorrow they didn't worry about yesterday. So, the patsies are in revolt.
Several countries are already past the point of no return. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.
The rioters can go home, in other words. The system we have taken for granted for so long should . . . and will collapse on its own.
Cash for Clunkers and Government Health Care
A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year. So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year. They claim 700,000 vehicles so that's 224 million gallons saved per year.
That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption. More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars So, the government paid $3 billion of our tax dollars to save $350 million. We spent $8.57 for every dollar we saved.
I'm pretty sure they will do a great job with our health care, though? I wonder if they will be as efficient as the Postal Service (now about to cut out Saturday mail) and Amtrak. If costs get too out of control with government managed health care, Congress could always pass a bill prohibiting people from getting sick on weekends I guess? For more on government efficiency at managing things see the Argentina posting that follows this.
That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption. More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars So, the government paid $3 billion of our tax dollars to save $350 million. We spent $8.57 for every dollar we saved.
I'm pretty sure they will do a great job with our health care, though? I wonder if they will be as efficient as the Postal Service (now about to cut out Saturday mail) and Amtrak. If costs get too out of control with government managed health care, Congress could always pass a bill prohibiting people from getting sick on weekends I guess? For more on government efficiency at managing things see the Argentina posting that follows this.
Cry for Us Argentina
In the early 20th century, Argentina was one of the richest countries in the world.
While Great Britain's maritime power and its far-flung empire had propelled it to a dominant position among the world's industrialized nations, only the United States challenged Argentina for the position of the world's second-most powerful economy.
It was blessed with abundant agriculture, vast swaths of rich farmland laced with navigable rivers and an accessible port system. It's level of industrialization was higher than many European countries: railroads, automobiles and telephones were commonplace.
In 1916, a new president was elected. Hipólito Irigoyen, formed a party called 'The Radicals' under the banner of "fundamental change" with an appeal to the middle class.
Among Irigoyen's changes: mandatory pension insurance, mandatory health insurance, and support for low-income housing construction to stimulate the economy. Put simply, the state assumed economic control of a vast portion of the country's operations and began assessing new payroll taxes to fund its efforts.
With an increasing flow of funds into these entitlement programs, the government payouts soon became overly generous. Before long its outlays surpassed the value of the taxpayers' contributions.
The death knell for the Argentine economy, however, came with the election of Juan Perón. Perón had a fascist and corporatist upbringing; he and his charismatic wife aimed their populist rhetoric and attacks at the nation's rich.
This targeted group was swiftly expanded to cover most of the propertied
middle classes, who became an enemy to be defeated and humiliated.
Under Perón, the size of government exploded through massive programs of social spending and by encouraging the growth of labor unions.
High taxes and economic chaos took their inevitable toll even after Perón had been driven from office. But his populist rhetoric and "contempt for economic realities" lived on. Argentina's federal government continued to spend far beyond its means.
Hyper Inflation exploded in 1989, and ended in the final stage of a process the government described as "industrial protectionism, redistribution of income based on increased wages, and a needed growing state intervention in the economy..."
The Argentine government practice of printing money to pay off its public debts, crushed the economy. Inflation hit 3000%, reminiscent of the Weimar Republic. Food riots were rampant; stores were looted; the country descended into chaos.
And by 1994, Argentina 's public pensions - - the equivalent of Social Security - had imploded. The payroll tax had increased from 5% to 26%, but it wasn't enough. In addition, Argentina had implemented a value-added tax (VAT), new income taxes, a personal tax on wealth, and additional revenues based upon the sale of public enterprises. These crushed the private sector, further damaging the economy. A government-controlled "privatization" effort to rescue seniors' pensions was attempted. INSTEAD, by 2001, those funds had also been raided by the government, the monies replaced by Argentina's defaulted government bonds.
By 2002, government fiscal irresponsibility induced a national economic crisis as severe as America 's Great Depression."
For those that will listen, history shouts over and over that we cannot sustain the wild spending and government takeover of business, banking, health care, and continue to inflate unfunded entitlement programs! Like history tells us, it will be an utter and complete disaster!
Today's politicians are enslaving future generations to poverty and misery. And they will be long gone when it all implodes. They will be as cold and dead as Juan Perón when my children and grand children must ultimately pay .
Monday, March 1, 2010
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