Friday, March 11, 2005

Note to Guiliana: Please Shut Up

Guiliana Sgrena's story, like a species in thrall to the pressures of Darwinian natural selection, undergoes slow gradual modifications until finally something completely new appears to emerge. Whereas she originally said that hundreds of rounds were fired at the car, photos show only two bullet holes in the vehicle. It also develops that the firing was from the side and rear of the car, consonant with the claim that the vehicle did not stop and instead tried to pass through the checkpoint. Not only did the U.S. military not know anything about Sgrena's release, neither, apparently did the Italian military.

The woman is turning this tragedy into a national embarrassment....for the Italians. No wonder they want her to just shut up.

Captain Ed has the details.

More Wake Up America

Well, the trade deficit figures have been announced for January and they're the second highest in history at $58 billion dollars.

The largest contribution to the trade gap was trade with China (no surprise there) and we're told it was mostly because of an increase in the import of textiles. Gee, since we gutted the textile industry in North Carolina, I guess we have to buy our textiles from somewhere else so it might as well be China, right?

I'd like to direct your attention to the article at this link.

The US has apparently lost the ability to create high productivity, high value-added jobs in tradable goods and services. The ladders of upward mobility are being dismantled by offshore production for home markets and outsourcing of knowledge jobs.

The BLS reports that the number of employed US technical workers has fallen by 221,000 in six major computer and engineering job classifications during 2000-2004. The largest drops were suffered by computer programmers, followed by electrical and electronics engineers, computer scientists and systems analysts.

So much for the new economy that economists promised would take the place of the lost manufacturing economy. America's remaining job market is domestic nontradable services. While India and China develop first world job markets, the US labor market takes on the characteristics of a third world work force. Only jobs that cannot be outsourced are growing.

The Bush economy has seen a loss of 2.8 million manufacturing jobs, a rise in the unemployment rate of 1.2 percentage points, and a stagnation in real weekly earnings. How bad will things have to get before economists realize that outsourced jobs are not being replaced? Indeed, many American companies are ceasing to have any presence in the US except for a sales force.

Cisco's CEO, John Chambers, declared recently: "What we're trying to do is outline an entire strategy of becoming a Chinese company." Cisco is establishing a new R&D center in Shanghai. The US corporation manufactures $5 billion of products in China where it employs 10,000 people.

That is just one company, and there are many doing the same thing. The result is abandonment of the American work force by American corporations. Little wonder the Bush administration is the first administration in 70 years to have a net loss of private sector jobs.

If one US company or a few move offshore, their profits improve and consumer prices are lower. However, when work in general moves offshore, Americans lose the incomes associated with the production of the goods they consume. Domestic production is turned into imports, with the result that America draws down its accumulated wealth in order to pay for the imports on which it is dependent.

Perhaps this is why, in part, Warren Buffet suggests that instead of the "ownership society" proffered by the Bush administrations we're more likely to be a "sharecropper" society.

From Warren Buffet's Annual Report to the Berkshire Hathaway Stockholders (the good stuff starts on page 19 under the heading of "Foreign Currencies").

Should we continue to run current account deficits comparable to those now prevailing, the net ownership of the U.S. by other countries and their citizens a decade from now will amount to roughly $11 trillion. And, if foreign investors were to earn only 5% on that net holding, we would need to send a net of $.55 trillion of goods and services abroad every year merely to service the U.S. investments then held by foreigners. At that date, a decade out, our GDP would probably total about $18 trillion (assuming low inflation, which is far from a sure thing). Therefore, our U.S. "family" would then be delivering 3% of its annual output to the rest of the world simply as tribute for the overindulgences of the past. In this case, unlike that involving budget deficits, the sons would truly pay for the sins of their fathers. This annual royalty paid the world - which would not disappear unless the U.S. massively under-consumed and began to run consistent and large trade surpluses - would undoubtedly produce significant political unrest in the U.S. Americans would still be living very well, indeed better than now because of the growth in our economy. But they would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an "Ownership Society" will not find happiness in - and I'll use hyperbole here for emphasis - a "Sharecropper's Society." But that's precisely where our trade policies, supported by Republicans and Democrats alike, are taking us.

So, why would Buffet invest about $20 billion in foreign exchange contracts spread among 12 currencies? Simply because he has little confidence in the US dollar yet he can't put all of that money anywhere else. Also, he faces the same dilemma many countries are confronted with. They have more U.S. dollars than they want, they know they're diminishing in value, but there is no market that is liquid enough to absorb them (other than the U.S. treasury bond market which is happy to sell bonds at the expense of Americans).

Consider that the US Treasury has perhaps $11 billion in gold reserves. If Buffet were to attempt to purchase $21 billion dollars worth of gold, the price of gold would rise so quickly he wouldn't be able to take delivery. In addition, his actions would probably collapse the financial markets around the world.

Note that several years ago, he did acquire several million ounces of silver when it was selling for around $3.50 an ounce.

Interestingly, Buffet laments

"I didn't do that job very well last year. My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings to the many we already have. But I struck out. Additionally, I found very few attractive securities to buy. Berkshire therefore ended the year with $43 billion of cash equivalents, not a happy position. Charlie and I will work to translate some of this hoard into more interesting assets during 2005, though we can't promise success."

Ok readers, here it is from one of the richest people on the planet, and he says he can't find anything to invest in. So why is the real estate market in a buying frenzy? Why have the stock markets boomed in the last three years? Why do so many people apparently disagree with him? The simple answer is that Buffet is a value investor. He only makes investments in propositions that represent value i.e. a reasonable chance for a return on one's investment. And, presently, he doesn't see any market to invest in that represents an opportunity for value. I wonder what that makes all those people who are currently jumping into real estate and the stock markets (like they did in late 1990s) with both feet ?

By the way, if any of our readers are interested in purchasing shares of Berkshire Hathaway, the class A stock - BRK is currently selling for slightly over $90,000 per share.

So, you might ask, what does all of this have to do with me? I don't have billions to invest so it's irrelevant. Well, the simple fact of the matter is that you, and I, are faced with the same problem as Mr. Buffet, the holding of a currency that's at extreme risk of loosing value, but unlike Buffet, we can protect our wealth in it's entirety. While the gold market is too illiquid for Buffet to invest in, we are able to purchase gold as a safe haven against the possibility of a debacle that may unfold.

In the final analysis, it all comes down to this simple message from Dr. Alan Greenspan written in 1968 that is more relevant today than ever.

At my Gold Page, I list a variety of ways one may protect their savings and future through investments in gold and gold-related investments. Personally, I prefer physical gold in hand. It's the equivalent of true wealth. Note that this page is purely a public service. I receive nothing whatsoever from any entity listed on this page.


"So: make a smash hit film about a guy who allows himself to be killed to redeem the world, don't get nominated. Make a modestly successful film about a gal who asks to be killed because she can't bear to live as an invalid, win Best Picture." Noah Millman.

Thanks to Evangelical Outpost for the tip.

George Soros' Bad Idea

George Soros, the sugar daddy of the Democratic Left, wants the U.S. to fight the war on terror after the manner of Spain, presumably by withdrawing within its own borders and letting others carry the burden of the conflict elsewhere. Here are a few excerpts from his recent remarks:

US billionaire financier George Soros slammed as dangerous Washington's strategy to fight terrorism, saying it was creating anger and resentment around the world.

Speaking on Spanish radio station Cadena Ser the day an international conference on terrorism opened in Madrid, Soros said Spain had "a very different response to terrorism - a healthier response".

The Hungarian-born businessman, who spent millions last year opposing US President George W Bush's re-election, said US policies had had negative consequences.

"Producing innocent victims creates anger and resentment. And this anger and resentment feeds terrorism," he said.

Exactly why or how Spain's is a "healthier response" Mr. Soros doesn't say, nor does he tell his listeners who he would nominate to take the United States' place in carrying the burden of the GWOT abroad should the U.S. follow Spain's example. Perhaps he believes that no one should take our place, that the Middle-East hell-holes that breed Islamic fanatics should just be allowed to fester and suppurate and ooze their deranged spawn across the globe. Such a policy would almost certainly make it necessary to fight the orcs in New York and Los Angeles rather than in Baghdad and Ramadi, just as Spain is having to fight them in Madrid, but if that thought disturbs Mr. Soros he gives no indication of it.

Perhaps Mr. Soros should stick to making vast sums of money and squandering it, if he wishes, on the political campaigns of such as John Kerry. He should definitely leave the war on terror to more qualified individuals.

Why Churches Decline

This report on the state of the Church in the UK and the reasons people give for leaving it contains a number of lessons for the Church in the U.S. would do well to heed (Emphasis is ours thoughout):

With Christian moral values and legal protections under assault on all sides, it is commonly said that the reason pews are emptying is that traditional religion is not relevant. A new survey of thousands of churchgoers in the United Kingdom says the opposite however, and indicates that the emptying of the churches has been caused mainly by preaching and pastoral care that has been emptied of moral or doctrinal Christian content. The survey addressed questions about why church attendance was falling so dramatically in the UK but growing elsewhere, even though two-thirds of the British population believes in God.

The results of the year-long survey of 14,000 UK residents by the interdenominational Ecumenical Research Committee has been called 'surprising' by mainstream secular and Christian media. The overwhelming response is to call on churches "to robustly defend moral values with conviction and courage and cease being 'silent' and 'lukewarm' in the face of moral and social collapse."

In an introduction, Lord Bromley Betchworth said "Those who spoke, did so with one alarming indication that there are multitudes of people across Britain and Ireland who feel that their views are not being heard or represented." The vast majority of the people in Britain and Ireland, he says, are still morally conservative. "They are appalled that moral values and treasured beliefs are being stood on their head and want churches to play a leading role in standing up for these things."

The survey itself asked four simple questions and avoided 'tick-box' responses in favor of written letters. The huge response was a surprise in itself and reflected a growing frustration and anger felt by many ordinary people about the direction of churches and society in general....Many gave variations on the response, "Why hasn't a survey like this been done before, so we can speak?" "At last, someone is listening, thank you so much." "Thank you for the chance to express our beliefs without fear."

Several 'traditionalist' Anglican clerics said that they had "to keep their own views to themselves in case their bishop, who held opposing beliefs, would remove them from their diocese." Many Catholics in North America have written that a similar situation exists there in which the churches are controlled exclusively by bishops and lay administrators who receive no Christian opposition to their officially sanctioned left-liberal dissent from the faith.

Over 90 percent of responses followed a uniform theme that the decline in traditional Christian moral and doctrinal teaching has caused the outflux of congregations. They listed the lack of apologetics, the reasoned defence and explanation of Christian doctrine, as one of the main reasons for the collapse. "It's a myth today that the people of this country have rejected Christianity; they simply haven't been told enough about it to either accept or reject it," wrote one respondent.

Thousands of letters also cited the lack of emphasis on the holiness of God and the need for personal moral conversion. The desire for teaching on holiness, was prevalent and has been influenced, said the authors, by Mel Gibson's film, the Passion of the Christ. Many responded that the churches now teach easy forgiveness; an attitude that 'God loves me anyway,' and that there is no need to attend church or live a morally demanding Christian life.

The overwhelming majority of respondents were vehemently opposed to ordaining homosexuals and blamed the churches for the rise in pedophilia scandals because of the prevalence of homosexuals in the clergy. Some celibate homosexuals wrote saying that the prevalence of support for homosexuality in the churches is undermining their efforts to live chastely. One young man wrote, "For sections of the Church to suddenly say that my struggle (to remain chaste)... was for nothing and that it would have been OK to have given in, would be to deny my personal cross for Christ and mock the faithfulness I have shown Him."

Two thousand letters asked for a return to traditional liturgy and pointed out that attempts to attract younger people with jazzed-up offerings had failed and had alienated older parishioners. Over 450 said they drove vast distances to attend a traditional liturgical celebration. 1,500 letters complained that the modern liturgies "bordered on entertainment rather than worship."

The survey supports what many Christians have been saying for decades: there is little point in attending a church whose message is no different from that of the materialistic secular world.

It is a mystery to us why it is a mystery to the mainline churches that their memberships are plummeting. Services in which the ministers and priests seem bored with what they do and give every appearance of not really believing what they say, do not incline people to return to the pew on the following Sunday. Services in which sermons seem dry, lifeless, uninspired, disorganized, superficial, and pointless, where there is no enthusiasm for the Gospel or for bringing truth to the larger culture, are simply not going to compete with those of churches which offer the opposites of these things.

Churches which have abandoned hundreds, or even thousands, of years of traditional moral and theological teaching in order to embrace the fashion of the times will hold on, perhaps, to their elderly but will find their middle-aged and younger parishioners looking elsewhere for spiritual nourishment. Why bother attending a church, after all, that's just floating along on the current of political, social, and cultural popular opinion and remains tethered to traditional Christianity by only the most nominal and tenuous attachments?

Many mainline churches in the U.S. have forgotten what they are and why they exist. Having long ago abandoned the Bible as the final authority in matters of faith and practice, they've convinced themselves that they're fulfilling their calling by undermining every moral and theological conviction in the Christian tradition. They suffer from a kind of institutional Alzheimer's disease and can look forward in their dementia to nothing more hopeful than continued decline until they eventually surrender up their last ecclesiastic breath.

If they wish to see the future they need only look at the Church in Europe.