March 2007

The Laurel Comment
“It’s hard to argue against cynics, they always sound smarter than optimists because they have so much evidence on their side”.
-the late Molly Ivins



Commentary

I have likely stated or felt the following a thousand or more times over the course of the Bush Presidency so going through the rote once more shouldn’t matter a great deal.

The difference between neo-conservatives and people such as myself may be easily if not perfectly defined through the comparison that liberals unlike neo-cons possess the distinct understanding that other people, other nations, and other factions within those nations have agendas of their own.

The commoners of all nations wish above all else to find work that will feed, clothe, house and educate their families, whereas the powerful wherever they may reside wish to control the means by which these simple wants are to be either delivered or denied.

The problem inherent within the neo-con philosophy, be it in the Middle East or around the world, lies in its failure to comprehend the goals of those they oppose or even those they believe they are trying to help. These shortcomings become most apparent when the neo-cons gain power and exercise their ideology in what amounts to old world imperialism.

A recent article in the New Yorker by Seymour Hersh does much to describe the present Middle Eastern dilemma. The most frightening aspect of Hersh’s view and of his many previous discovery pieces is that the knowledge of the inner workings of foreign politicos is both available and apparent. The former, if one cares to look and the latter if one has even a modicum of historical knowledge from which to draw conclusions.

It is shocking to know that expert advice in Middle Eastern history as well as intelligence reports from professional officers was not just ignored by the pre-war Bush administration, but ridiculed. The incredible hubris of the gung ho chickenhawks; Perle, Wolfowitz, Feith, Rummy, Cheney and others was not only dismissive of international advice but of their own military and intelligence experts. Tragically this was also true of the conduct of the war itself and the disastrous occupation that followed.

When you take your nation to war you should at least know who your enemy is and who their enemies are. Sunnis, Shi’a, Iraq, Iran were all lumped together and now they are coming apart.

The new U.S. policy in the Middle East is one that has been pondered in this space over the course of the war. Firstly, that Iraq is in the process of being divided along ethnic lines and secondly, by way of achieving this, America is abandoning the Shiites in order to side with the long-term Bush family friends in Saudi Arabia who happen to be Sunni. Just for the record Al Queda is Saudi Sunni as were most of the hijackers and Bin Laden himself. The policy failure of the Iraq expedition is about to morph into something else, something that may turn out to be far more dangerous. Iran is not the problem, America is not the problem. Bush/neo-con policy is the problem.

In Quebec the provincial election campaign has surprised many of us but none more than the Pequistes. It would appear at this juncture that the Liberals might return with minority status if the rise of the ADQ continues. There now appears, at the time of this writing, to be a distinct possibility that the PQ is about to become the third party. Debate night promises to take on more than its usual importance.



Markets

In a bull market everyone is a genius, or so it would seem. The reality is that bull markets always come to a short-term end, an end that can be brutal to those who remain unprepared.

The volatility of the past few weeks was foreseen by many investment professionals and discussed on many levels so it should have come as no surprise to anyone who was paying attention. This five-year bull market has been abnormal in both its length and breadth, it has also been far more real in Euro and gold terms than it has been in U.S. dollar related securities.

Excess liquidity drives markets upwards, the opposite occurs when such liquidity is diminished. In 1999 Alan Greenspan flooded the market with money in advance of what proved to be the Y2K hoax. In February 2000 the rug was pulled from beneath the market.

There is little doubt that the foundation of the world economy is undergoing profound changes as a billion new “Chindia” consumers have most recently proclaimed. Yes, markets will be higher some years down the road, but what is the rush.



Remarkably

The U.S. intervention in Iraq has served to break the Sunni-Shi’a balance of power in the Middle East. The Bush administration has unwittingly opened Pandora’s Box and the reckoning for this dramatic error has only begun. Hundreds of thousands have died in this exercise of hubris and billions of dollars have been wasted. As one of the 2 million Iraqi refugees recently pondered…for what? “There used to be one Saddam, now there are a thousand”.

And finally, unlike many around the world I breathed (heaved is too much) a deep sigh of relief last month when Vice President Dick Cheney escaped the alleged Taliban assassination attempt. The last thing I want is for this son of a bitch to be martyred; I want him and his cohorts to be impeached.

Investment note: Own gold in the face of this coming currency crisis.



Geoff Ryan March 6, 2007.


Geoffreyryan@hotmail.com