The above statement is so far from the truth that it amazes me so many have accepted it as fact.

First of all, our country’s wealth does not come from our citizens earning it in their jobs or businesses and second of all, country’s like China do not buy our debt as an investment, they are not passive investors.

The truth is that the United States can run such a high defecit because of the Petrodollar. Countries buy our debt because of the Petrodollar.

Here’s how it all began!!
In order to prevent this monetary transition to a basket of currencies, the Nixon administration began high-level talks with Saudi Arabia to unilaterally price international oil sales in dollars only — despite US assurances to its European and Japanese allies that such a unique monetary/geopolitical arrangement would not transpire. In 1974 an agreement was reached with New York and London banking interests that established what became known as “petrodollar recycling.” That year the Saudi government secretly purchased $2.5 billion in US Treasury bills with their oil surplus funds, and a few years later Treasury Secretary Blumenthal cut a secret deal with the Saudis to ensure that OPEC would continue to price oil in dollars only.

When OPEC prices oil in US dollars only, that meant that every country in the world needed a reserve of US Dollars to buy oil. Since the debt purchased by countries like China represents an IOU in US Dollars, it can be used to buy oil. We can spend to oblivion as long as the oil currency stays as the US Dollar.

What happens if OPEC decides to switch to, lets say, the Euro??
The result would be the transfer of wealth from the United States to the EU. Every country would flush out their US Dollars and exchange them for the Euro. There would no longer be anyone to finance the debt and the United States would transform into a Third World Country, practically overnight.

There were two countries that switched to only purchasing oil in the Euro, now there is only one. They were North Korea and Iraq. Iraq made the switch around the year 2000 and kept all of his Euros in a French Bank. Now you know why France and Germany were so against the Iraq war and why they are so friendly with Iran because they stand to gain the most by our financial demise. This is probably the main reason we are in Iraq and Bush was so determined to invade Iraq. One of the main reasons for the Iraq War is a currency war and the petrodollar.

While I don’t hold to the same conclusion as the following essay, it really opened my eyes to how the economy of the world really functions and how America’s economy depends on the petrodollar.

The Real Reasons for the Upcoming War With Iraq:
A Macroeconomic and Geostrategic Analysis of the Unspoken Truth
by William Clark

SBD

**This is the democrat party folks**. Repeat it for everyone to see. I have said many times, if you want to beat a liberal at the ballot box – simply let them talk.**

Baloney… this is the majority voice of the Democratic Party…the ones who know Dubya and the Republicans are the problem, not the Troops:

“In early 2005, I joined several other Senators on a Congressional delegation led by Senator John McCain to Iraq, Afghanistan, Kuwait and Pakistan. In Iraq, we visited Baghdad, Fallujah and Kirkuk and met with U.S. troops, Iraqi leaders and ordinary Iraqis. In Afghanistan, we visited with Afghan leaders in Kabul and with U.S. troops at Bagram air base. During our trip, we expressed our support and the American people’s support for the servicemen and women that we encountered. It was a privilege to thank these men and women in person for their service. ”

“This was my second visit to Iraq and Afghanistan – I previously spent time with our troops in both nations over Thanksgiving weekend in November 2003. During that trip, I was honored to share Thanksgiving dinner in Afghanistan with servicemen and women from the 10th Mountain Division from Fort Drum and to fly with members of the 914th Airlift Wing of Niagara Falls Air Reserve Station. On my most recent trip, I encountered the same images I witnessed on my first: brave soldiers serving with courage, valor, and honor in defense of freedom. I am so proud of them and of their service. ”

“We owe our men and women in uniform an enormous debt of gratitude for their sacrifices. And recent experience has reminded us that they deserve more than just our thanks. We need to ensure that we are providing them with the support and resources that they need to get the job done”….Hillary Clinton

Dubya has lashed out at Americans “who claim that we acted in Iraq because of oil, or because of Israel, or because we misled the American people.”

True, he said, some “honest critics” have condemned his decisions about Iraqi reconstruction, U.S. troop deployments and so on. But Bush drew a bright line between “responsible” opponents and the “irresponsible” kind, who raise doubts about the entire purpose of the war and thereby bring “comfort to our adversaries.”

In other words, it’s OK to criticize the White House for bungling the war after it started. But if you question how the war started, then you’re obviously helping the Bad Guys. And you’re hurting the United States.

The president has it exactly backward. By asking tough questions about the buildup to the war, Americans are acting in the very best traditions of their history. And it’s the president himself — not his opponents — who is ignoring this same history.

Start with Abraham Lincoln, the first Republican president and one of Bush’s own heroes. We associate Lincoln with the Civil War, of course, so we forget that he was elected to Congress during an earlier conflict: the Mexican-American War. He opposed it, arguing that U.S. soldiers had incited the dispute needlessly.

“Marching an army into the midst of a peaceful Mexican settlement, frightening the inhabitants away, leaving their growing crops and other property to destruction, to you may appear a perfectly amiable, peaceful, unprovoking procedure,” a young Lincoln told the House of Representatives. “But it does not appear so to us.”

Sixty years later, in the Spanish-American War, the United States would acquire the Philippines and Puerto Rico. But the Filipinos revolted against their new U.S. rulers, spawning a brutal overseas war — and a fresh round of critics back home. “God damn the U.S. for its vile conduct in the Philippine Isles,” screamed the Harvard philosopher William James, a founder of the American Anti-Imperialist League.

The League also enlisted Mark Twain, who blasted the war in his own typically caustic style. “We have pacified some thousands of the islanders and buried them; destroyed their fields; burned their villages, and turned their widows and orphans out-of-doors; furnished heartbreak by exile to some dozens of disagreeable patriots; subjugated the remaining 10 millions by Benevolent Assimilation, which is the pious new name of the musket,” Twain wrote. “And so, by these Providences of God — and the phrase is the government’s, not mine — we are a World Power.”

In the ensuing century, thousands of Americans would go to jail for opposing the United States’ foreign wars, military conscription or both. Socialist leader Eugene Debs received a 10-year sentence after he criticized U.S. involvement in World War I; on the eve of World War II, David Dellinger and seven other seminarians served 10 months at a federal penitentiary for resisting the draft; and during the Vietnam War, Muhammad Ali was sentenced to five years in jail (and was forced to relinquish his heavyweight crown) for refusing induction into what Ali called a “white man’s war.”

You don’t have to agree with everything those people said or did. But surely they were acting in the best U.S. tradition of democracy, which holds our leaders under constant scrutiny — especially during wartime. Antiwar spokesmen such as Lincoln, Twain and Debs did not aid the United States’ enemies, as Bush would now have it. Instead, they upheld the very principles upon which this country was founded: inquiry, free speech and the accountability of elected officials to the citizens who choose them.

Dubya and this Republican administration are sensitive to criticism because they make stoopid decisions based on flawed political ideology. That’s there problem, not ours.

The guy in the LA Times is a goofball. He can say whatever he wants. But the majority of Democrats know what the problem was, and is.

Have a nice day.

What most people forget is that money is simply an ordered mediator of exchange. What would you rather have: a toyota or a stack of green paper? Would you rather have a buck or a double cheesebeurger? Your choice. The utilitarian view says that a full belly is of more value than a pretty picture of GW. Unless you happen to be my ex-wife who has stuff she picked out of peoples’ trash 40 years ago.

The true assessment of wealth is what people have. You can buy a computer today for $500 that you couldn’t have bought at any price 20 years ago. Thirty years ago you could by a car for 1/3 of your monthly income that needed new tires every 10,000 miles and you bragged if you got 75,000 miles out of it. Twenty years ago calling Aunt Minnie in Nebraska was a momentous, once a yerr event. Now babies are coming with cell phone implants.

Analysis by $’s is static and in no way accounts for money’s true value.

Regards,
Roy

We’ve doubled spending on education over the last 25 years and the performance chart is flat. We still have the same, big problems today that we had before we decided to double the funding.

I see “insurance coverage” as the fundamental problem that has pushed the drug and medical costs so high, because insurance companies keep their costs under control by forcing price concessions from pharmacies, doctors and hospitals for ‘their’ insured.

Result, of course, is that the difference has to be made up somewhere, and the obvious ‘price-cost balance restoration’ point is the uninsured patient/customer.

The same principle is in action in legislative requirements for insurance providers to cover elective and cosmetic surgery, for example. It throws off the base calculations insurers use in setting group-coverage premium prices, raises their costs, which raises premium prices for employers, who pass it on to all group members, either by raising their insurance contribution on withholding salary increases or other workplace benefits.

Those wonderful insurance pharmacy cards, where a holder pays only a dollar, two or three, for each prescription? The insurer only covers part of the differential, brow-beating pharmacies into eating part of the loss to keep the business. That the $5 or $10 difference to pharmacies had to be pulled in somewhere else, resulted in prescriptions that should cost about $12 or $15, suddenly “fairly priced” at $35 or $50 for those without pharmacy cards.

The only solution I’d see as equitable, would be to require the insurance companies to pay for the benefits they and their policies state they’re covering, and prohibit them from passing their costs on to end providers.

Yep, sort a like Welfare.

Remember that Reagan wanted to “starve the beast”. Problem
is that then a Dem gets in and they tax and spend on entitlements
that continue to destroy the fabric of this country.

So once you realize that money is going to be spent – why be
the old penny pinching aunt who skimps to leave something to
her nephew – who then blows it.

The design of the drug program is horrible – but the basic idea
that these drugs will save expensive hospitaliztions is true.

Just too many weak kneed R Senators that do too much
compromising – Bush wanted to tie a test of school vouchers
and building of private schools in hurricane damaged areas – but
that has seemed to dissapear from plans.

Just know the article is one to think about and we will see
what next three years bring.

Your comment has piqued my interest! And I hate thinking about the economy and money things.

Thanks for the link. I’ll just have to grit my teeth and take a peek.

CNNGALLUP SHOCK POLL: ONLY 16% FIRM ON HILLARY FOR PRESIDENT
Wed Jan 25 2006 10:50:26 ET

Most voters now say there’s no way they’d vote for Sen. Hillary Rodham Clinton if she runs for president in 2008 – while just 16 percent are firmly in her camp, a stunning new poll shows.

CNNGALLUP found that 51 percent say they definitely won’t vote for Clinton (D-N.Y.) in 2008, another 32 percent might consider it, and only 16 percent vow to back her. That means committed anti-Hillary voters outnumber pro-Hillary voters by 3-1. The poll suggests she can forget about crossover votes – 90 percent of Republicans and 75 percent of conservatives say there’s no way they’d back her.

Meanwhile, 46% said they would oppose Secretary of State Rice if she ran for President – a step Rice has repeatedly said she won’t take.

END

SBD

Missed you today!

On TV they are explaining how it is legal to listen to people in America talking to suspected terrorist targets in foreign countries.

If they decide to make the person in America a target, then they need a warrant.

It is exactly what you said.

You’ll find this Blitzer report, pulling straight from the DNC spin on the financial reporting. The irony isn’t so much about Wolf retailing the spin, it’s that DNC would even TRY and spin their dismal numbers. No matter how hard you try there is still no Lemonade!

http://media.nationalreview.com/088266.asp

Click here: || RedState.org
http://www.redstate.org/story/2005/9/19/111143/226
I, Heretic
By: Nick Danger · Section: Miscellania

Here I am going to spout heresy. I am going to argue that the fiscal policies being followed by President George W. Bush represent a breakthrough in conservative — yes, conservative — thinking. They represent good policy; and even better strategy.

I will suggest that President Bush understands money better than any President we have ever had. He understands it better than most economists. He understands it better than our illustrious pundits. President Bush understands money the way a financier understands money. He sees it as a force or a power that one squirts at the world to make the world change. He sees it as a weapon.

This is not how accountants view money, and it is not how most economists view money. And it is certainly not how any ordinary citizen could view money. But in the mind of a President of the United States, such thinking has the potential to lead to some rather revolutionary results.

(YOU REALLY MUST READ COMPLETE COLUMN – WILL ASSUAGE
YOUR DOUBTS)

AND THE BEST CLUE TO EVER, AS TO WHY THEY HATE! HATE!
HATE! GEORGE W BUSH.

Danger ends with these paragraphs:

So we do this our way, and yes, we spend some money – a fortune, frankly – to get it off the ground. Know what we’ll have when we’re done? People who want smaller government. Homeowners. With jobs. Why will they want big government? They won’t. And that’s how we win. But we can’t get there unless we make it happen; unless we exercise power; unless we spend money. We have to demonstrate to people that our ideas work.

We know where to get the money. It’s a Good Thing to get the money, because doing so weakens the Chinese and allows us to take care of survival in the face of some other people who are just as scary. And instead of sitting here quietly waiting for the next Democratic administration to come in and click the ratchet one more notch to the left, we can reverse some of the harm they’ve caused, and demonstrate that our ideas are better. This really does all play together. And it really is “conservative” in the strongest sense of the word. It’s just not the same old short-term thinking, like we’re used to from our politicians. It’s not “small ball.” It’s playing to win, as opposed to playing not to lose.

ME: So, China is in same position as Shylock, cannot collect
debt without serious, perhaps fatal injury to their economy.
(END OF MY COMMENT)

Click here: || RedState.org
http://www.redstate.org/story/2005/9/19/111143/226

September 19, 2005

“Bush understands money…”

Sep 19th, 2005: 11:11:43

Prior to his recent speech concerning the rebuilding of New Orleans, President Bush was already being lambasted by critics from right to left for what appears to be some rather profligate spending behavior. There is pork in River City. There is the $500 billion prescription drug benefit. There is the War on Terror, involving huge expenditures in Afghanistan and Iraq. There are what Democrats call tax cuts, and what the rest of us must still call tax rate cuts even if revenues have risen. And now comes what sounds like two hundred billion more in federal spending to build a shining city in a bowl. This raises questions. Such as, for example, where is all this money supposed to come from? What about the deficit? What about the national debt? Why are we saddling our children with still more debt they will have to pay off? Whatever happened to small government? We’re spending like Democrats! Why? Whatever happened to fiscal discipline? How can anyone call this conservatism?To which the short answers are:
China. Well, China and Japan.
We are taking on debt. Ergo, a cash deficit. So?
It’s about where it ought to be.
We aren’t.
The public doesn’t want it. We have to teach them to want it.
How long, Oh Lord, will our side be on defense?
Who says we don’t have it? Do they know what they’re talking about?
Watch.Here’s where we get the money: our citizens earn it in their businesses or by performing their jobs. They spend it on things they need. A lot of those things are imported. The cash ends up in the hands of foreigners. The U.S. government borrows it back. Note carefully that our consumers now have the stuff, and our government has the cash. Is this a good deal, or what? What the foreigners have is a debt instrument. Good for them. Here is why we take on debt: He who has the cash makes the rules. If we have the cash, we get to say how it’s spent. Remember, money is power. It is a force you squirt at the world to make it change. We drive the change, when and where we want. What the foreigners get is a debt instrument. They are passive investors. Those are the best kind. This is especially important with respect to China. China is accumulating massive amounts of our debt. Good. Better that than they should have the cash, which they would probably spend on things that we would think are scary. Every dollar we can get them to loan us another dollar they don’t have for building battleships. Bush understands this. Too many people don’t. Here’s the deal with the national debt: Debt is about acquiring cash now, from somebody else. An institution should do that any time it thinks it can earn a return on the cash that is higher than the interest it must pay on the debt. In actual practice, people start to get uneasy if an institution’s debt starts to exceed a certain percentage of its total capital. For companies in the U.S., 50% debt is pretty high. In Japan that’s low; Japanese companies rely much more on debt financing than on equity when financing their businesses. There is no right answer to how much debt is the “correct amount.” It’s one of those things that “depends.” For a government, the question is sort of weird, because there is no such thing as owning “equity” in a government. At least, not in the financial sense. For a government, a better measure might be its ability to service its debt, i.e. how much of its actual cash revenue (taxes and fees) is needed to pay the interest on its debt? So long as that looks reasonable, no one should get too worried. Instead they should think about, as Bush obviously does, how we might invest the cash we get from new debt so as to produce a higher return than the interest rate on the debt. If we do that, we don’t care how large the debt gets. We’ll always be able to service it. Our children are not going to have to pay it back. Institutions are not individuals. For our purposes, institutions are immortal. If some of their debt comes due, they simply roll it over. They can do this perpetually. IBM probably has debt on its books that’s been there since the 1920′s. It’s been rolled over several times. No one cares. So long as IBM sees opportunities for investing cash that return more than the interest rate, they will never pay the debt back… they’ll just keep rolling it over. And then the Sun burns out. This can be a difficult concept for non-finance-types to understand. But it is crucial to understanding what’s going on here. So long as the U.S. economy keeps growing… so long as we have opportunities to invest cash in ways that earn a higher rate than we have to pay in interest… we should keep rolling over our debt, and adding more as we can, forever. All these people who moan about the chillrun do not understand this game. The chillrun aren’t going to pay it back. They don’t have to. They’re going to roll it over, and add more of their own. As will their children. Until the Sun burns out. Here’s why we don’t have small government: People don’t want it. They say they do, but when you threaten to give it to them, they vote for the Other Guys. It took Republican politicians decades to figure this out, and most Republican voters still haven’t figured it out. The fastest way to become the minority political party in the United States is to become the party of government frugality and fiscal discipline. Let the Democrats do that. We’ve been there, done that, and have Bob Dole to prove it. Besides, the Democrats are lying. The minute they got in, they’d start spending like, well, like George Bush and the Republican Congress are spending. But there’s a difference: they’d be spending it on their stuff. More social engineering. More government-dependency programs. More crosses soaked in more urine on more government grants. For decades, Republicans played defense with money. Tied to this idea about “small government” in a country where people didn’t want that, the best idea they could think of was to build speed bumps on the Road to Socialism. This while the Democrats got to call the shots because Republicans wouldn’t call any when they got in. They’d be “responsible.” They wouldn’t spend as much. All they did was conserve borrowing capacity for the next time the Democrats got their hands on the spigot. What the rest of us got was a ratchet that clicked left when the Democrats were in, and just sat there when the Republicans were in. Now comes George Bush to play offense with money. Folks, this is a new idea. Think about what we can do here. We get to call some shots. George Bush can see this, why can’t anyone else? Is our highest priority right this minute “small government?” Is it “reduced spending?” Is it “balance the budget?” I don’t think so. I think our first priority is to survive. There are some really crazy people out there who think we should all be Moslem, or dead. There are a lot of them, and they are nuts. They have a lot of money. They are very, very dangerous and thinking anything else is likely to be suicidal. So that’s priority one. We can quibble over the details, but spending money to survive is not a bad idea. So what’s next after survival? Can we now balance the budget? I say no. I say the next priority is to reverse the decline of our civilization. Surviving won’t have that much utility if we all end up as savages clubbing one another. We all just got a very clear demonstration of what that looks like. We’ve seen it before, too. In fact we’ve seen it almost everywhere that Democrats have had their way in imposing their values on citizens through government dependency programs. There is a message in this. It is that the “ratcheting” has to stop. Like it or not, we either spend money to have our values reflected in this society, or the Democrats will keep pushing us toward Lord of the Flies. Did anyone really listen to George Bush the other night? I did. I see that Rush Limbaugh did as well. Limbaugh has phrased it as, “You Democrats had 60 years to try it your way. Now we’re going to try it our way.” Is that worth doing? I say yes, as I will explain below. But let’s be clear: it’s going to cost a lot of money. We are going to have to exercise power to make this happen. Exercising power means spending money. It does not mean balancing the budget, reducing spending, or any other thing. We will get smaller government when people want it. No one alive today in the U.S. has ever seen small government. It sounds scary. Democrats, and their allies in the media, make sure it sounds scary. Grandmothers will be tossed in the street. Poor people will die of starvation. What a cold, cruel world these Republicans envision. People will only support a party of small government when they are sure that that stuff won’t happen. And the only way to make them sure is to demonstrate it. Paradoxically, because of our history since FDR, the only way to demonstrate it now is to spend a bunch of money to create a demonstration. Picture New Orleans 2.0, the shining city in a bowl. It’s a kind of town we have a lot of in the United States. Many people of modest means, but they own their own homes. Or at least it says they do on their mortgage. Someday the mortgage will be paid off and they really will own their own homes. They will be land owners. For sure their children will be. Think about that. Think about how different that is. They care about this place. They care about their homes. They care about their neighborhoods. They care whether their politicians are crooked. It’s no one else’s responsibility to keep things up. This is their place. They own it. So we do this our way, and yes, we spend some money – a fortune, frankly – to get it off the ground. Know what we’ll have when we’re done? People who want smaller government. Homeowners. With jobs. Why will they want big government? They won’t. And that’s how we win. But we can’t get there unless we make it happen; unless we exercise power; unless we spend money. We have to demonstrate to people that our ideas work. We know where to get the money. It’s a Good Thing to get the money, because doing so weakens the Chinese and allows us to take care of survival in the face of some other people who are just as scary. And instead of sitting here quietly waiting for the next Democratic administration to come in and click the ratchet one more notch to the left, we can reverse some of the harm they’ve caused, and demonstrate that our ideas are better. This really does all play together. And it really is “conservative” in the strongest sense of the word. It’s just not the same old short-term thinking, like we’re used to from our politicians. It’s not “small ball.” It’s playing to win, as opposed to playing not to lose.

See AJ’s post on their money raising, OUCH.

I think it’s trapped in a catch 22…they have to pander to the smallest, yet most radical element. Even they (elected ones) don’t believe half the crap their espousing.

They failed to make their case, so they’re stuck appeasing the extremist element out of fear (don’t wanna make the Kos kids mad) at the same time knowing they’re alienating the bloc of voters that any politician needs to win, swingers not to mention the moderates of their own party.

The Kos faction gained their grip when they dumped money on Dean. It was all about the money, not foresight. Think signing a deal with the devil. (AJ Dem money woes demonstrates the lack of foresight)

When Condi, who hasn’t even hinted at ambitions let alone the beginning of a campaign, garners better number than Hillary (the Hawk of the party!) you know you’ve got some problems deep within.