Letters to the Editor
FredrickBernanke
Published Letters: 170 Editor's Choice: 8
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The Insidious Transfer of Wealth to Our Enemies
[Read the article: Our "black Monday" for oil]
[Read more letters about this article: Here]"The principal recipients of petro-dollars -- the major oil-producing states of the Persian Gulf, the former Soviet Union and Latin America -- will undoubtedly use their accumulating wealth to purchase big chunks of prime American assets or, as in the case of Hugo Chavez of Venezuela or the Saudi princes, pursue political aims inconsistent with American foreign policy objectives. America's vaunted status as the world's "sole superpower" will prove increasingly ephemeral as new "petro-superpowers" -- a term coined by Sen. Richard Lugar of Indiana -- come to dominate the geopolitical landscape.
The above is the only noteworthy paragraph in the article. Though filled with data (numbers) the rest of the article is the same erroneous--time adjusted--information we got from "oil industry experts" back in the 1970s. They were not only wrong, but turned out to be the antithesis of what the oil market actually did in the 1980s and 1990s.
The real crisis lies within the quoted paragraph. Namely, the insidious transfer of wealth from the consuming to the producing nations currently taking place. The USA is the largest consumer nation and the House of Saud and the House of Putin are the number one and two producer nations respectively.
Public pronouncements aside, neither of these countries is an obvious ally of the West. Some may argue that they are philosophically and/or militarily the enemies of the USA and our true allies.
Saudi funds the jihadists, period. Saudi itself is governed by the Islamist Law so revered by the Islamic Terror Movement. Only the pretended and convenient "alliance" between the House of Saud and the USA make Saudi Arabia a target themselves of radical Muslimism.
KGB-Russia adds the sweet touch of its USSR legacy of nuclear weapons to the mix.
The transfer of Western wealth to these and other oil producers, and the investments those nations, under the cover of Sovereign Investment Funds (SIF), should be of great concern to all citizens of the Western democracies, particularly the USA.
The investment in real estate, in shopping centers in non-essential industries in the West is a welcome development. But now these SIF are buying huge chunks of the Western financial system--Citigroup, Morgan, Stanley, Merrill Lynch, UBS--as that system teeters on the edge of collapse. It's the functional equivalent of the KGB owning Boeing or General Dynamics---it's a national security issue.
The Bush Administration sleepwalks through the crisis; and probably their "solution" would be some idiotic, doomed from the start, military solution.
This writer at least has the smarts to understand the gravity of the situation(s) confronting the USA and it allies. The solutions are way beyond his pay-grade.
[My Blog: proteanPerspectives]
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"Bargain Basement" Price for Bear, Stearns?
[Read the article: Nightmare on Wall Street]
[Read more letters about this article: Here]The freaking firm was worthless! Don't you get it?
JP Morgan Chase, with prodding from the Fed, paid a nominal $2 a share; Bear, Stearns stock was $80 a share a month ago.
Even the Sovereign Investment Funds (SIF) mentioned in an earlier post wouldn't get their fingernails dirty with this one.
And, by the way, these SIF are government entities of the oil producing states such as the House of Saud and the House of Putin that are BUYING, not lending, money to Merrill Lynch, Citigroup and the rest---pleasant thought, huh?
The financial-systemic crisis is the most serious one faced by the Western democracies since the Great Depression. Only this time the economies are logarithmically larger and more complex than those of the 1930's. The Fed and other central banks may not have the resources or the knowledge to rectify the mostly unemerged problems buried deep within the financials of Citigroup et al.
Imagine an announcement by Citi on Tuesday: "We regret to inform our depositors that we are compelled to freeze their deposits effective immediately for a 30-day period during which we will attempt to re-organize our financial structure."
What does the average Joan do if she has a deposit in XYZ Bank? She hightails it over there to get it out.
Jimmy Stewart, where are you now that we need you?
[My Blog: proteanPerspectives ]
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The Unforeseen Consequences of Being a Church Member
[Read the article: Was Obama's speech enough?]
[Read more letters about this article: Here]Question: Has Obama played the "religion/spiritual/god card during his campaign, as George W. Bush and Reagan did?
I don't know the answer.
If he did, and continues on that path, he deserves all the criticism being hurled at him from various quarters. You suck up to the "believers" and then it is discovered that your "spiritual mentor" is a race-baiting ignoramus, you pay the consequences.
If, however, Obama has not made his religiosity part of his campaign, the remarks of the guy who runs the church he happens to attend are essentially irrelevant to Barack's qualifications to be POTUS.
This writer surmises that Obama long ago figured out that if he were ever to become a presidential candidate, he would at least have to be able to say he attended church regularly. He needed one with close proximity to his home turf, so it would not be a major project to schlep over there on Sundays. Wright's place was close by--another assumption this writer makes--so Barack dropped in and, presto!, he could legitimately claim to be a regular churchgoer.
The tactic, if indeed that is what it was, has somewhat backfired on him; but he's smart enough to survive it.
[My Blog: http://proteanPerspectives.blogspot.com]