tip o my hat

I have to tip my hat to Black Swan on the Mish Comment board. For the uninitiated Mish brings it hard as far as economic issues go, and is worth a read every day. Mish believes we are heading into economic deflation. Trust me on this one nobody ( except Ron Paul) left in the Presidential race can offer any kind of opinion or analysis on this argument. It really is beyond their ability to analyze the situation. In truth, this is a tough issue, even for those in the game --- are we headed for inflation ala Weimar? How about a revisit of the 70's stagflation ? Or are we looking at a debt driven deflation? Honestly -- I don't know. I continue to be long gold and gold related shares. Please ---get out of debt. As Jim Sinclair say--"protect yourself--this is it"

Here is Black Swan's post unedited:

The cold war was a game of chicken to see who would go over the cliff first, while carrying with them the weight of military spending. Thanks to Ronald Reagan and the Muhajadin, the US won, right? After all, the US spends almost as much on defense as the rest of the world combined. We're still playing, but we can't find any country stupid enough to play against us. Are we still winning? This Bushco economic strategy doesn't seem to be working all that well for America in this era of world trade. Our record account deficit illustrates how successful this country has been at producing what the rest of the world wants in trade. The only thing we've been adroit at exporting lately, has been our debt. I'm guessing foreign banks have probably had enough of our financially engineered instruments. After all, multibillion dollar write-downs can be embarrassing. We could sell more of our infrastructure to pay our debt, but it's too late to sell the White House, because the Saudi Arabians already own it.
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Surge Nonsense

As we get into the meat of the political campaign season I bet we are going to be hearing more and more about THE SURGE. My Republican friends like to push the idea that "the surge is working". This is an argument that really does need exploration and not just in the superficial way that many of these issues are dicsussed.


I found a couple interesting pieces this weekend on Juan Cole's blog. This article by Patrick Cockburn is exactly what I'm talking about when I say we need to get beyond the superficial. A few highlights:

To judge from the talk in Washington, the 'surge' that put 30,000 more US troops on the ground in Iraq has succeeded in bringing stability to a nation still riven by ethnic, religious and tribal conflict. Life, the Pentagon boasts, is returning to normal. But the truth is a very different story.

In contrast to the spurious turning-points of the past, the most recent political changes in Iraq, which had led to the fall in American and Iraqi casualties, are quite real. But they differ significantly from the way in which they are portrayed in the outside world, and have less to do with al-Qa'ida and the US than the continuing struggle for power between Sunni and Shia in Iraq.
From the fall of Saddam Hussein in 2003 to the summer of 2006, the five million-strong Sunni community had battled the US and the Shia-Kurdish Iraqi government. Then, quite suddenly, last year many of the Sunni rebel groups switched sides and allied themselves with the Americans, formed the "al-Sahwa" or "Awakening" movement and declared war on al-Qa'ida.

"The problem in Iraq is that the agenda is driven not by what is really happening, but by the perception in America of what is happening," Ahmad Chalabi, veteran of the opposition to Saddam and one of the most astute observers of the Iraqi scene, told me. A problem is that US politicians and commentators assume far greater American control of events in Iraq than is the case. The US is the most powerful player there, but it is by no means the only one.


While I'm on the subject of Baghdad, I don't think any of us can really comprehend the situation. Wow!!!