The U.S. Is Bankrupt

From the link:

"A substantial increase in the debt burden on American taxpayers is too important a matter to be rushed through the Senate without a complete debate on the current course of U.S. fiscal policy," the Democrats wrote.

They vowed to offer a longshot plan to reinstate so-called pay-as-you-go budget rules requiring tax cuts and new benefit programs to be financed by spending cuts or new revenues elsewhere in the budget.

Under an obscure House rule, that chamber gets to avoid having to vote on the debt limit if Congress successfully adopts a budget blueprint. So, after passing the budget last April, the House sent the Senate a $781 billion debt limit bill as if it had passed it separately.

That bill is the most likely vehicle for the Senate debate, but an alternative measure would be a filibuster-proof bill permitted under fast-track budget rules that limit debate and opportunities to offer amendments. But to go this route would require the House to vote on the bill before it is sent to Bush for his signature, a prospect House GOP leaders are eager to avoid.

"No decisions have been made," said Eric Ueland, chief of staff to Frist.

The last time Congress voted to increase the debt limit was in November 2004 when it was raised from $7.38 trillion to its current level of $8.18 trillion.

What a joke. If an individual was to operate like the Federal government, they would be out in the streets looking for a cardboard box for shelter. But the government simply raises the limit of the debt they will borrow...from the Federal Reserve. One has to wonder what the logical conclusion is as does the rest of the world who holds U.S. dollars.

What a bunch of buffoons. Make no mistake, the debt ceiling will be raised. And the next generation picks up the tab.

From The R-Man

Richard Russell is a legend in his own time. People of all generations should take heed to what he has to say...especially the younger generation.

Wait, there's one other item I want to talk about, and it's DEBT. I dislike debt, I dislike debits, I dislike being in a position where by I have to make money just to pay off what I owe. I grew up at a time when debt was feared and hated. Debt to me means that you've lost control of some area of your life. You're working to pay off something that's not yet yours. There's an old adage that I've repeated to my kids a thousand times. It runs like this-- "Those that understand interest earn it. Those who don't understand interest pay it."

Young people today get married and immediately buy a house and furniture and a TV set and kitchen supplies. They take on a mortgage and assorted debts, and they never get out of debt. Instead of building savings, they pay the monthly mortgage bill and the credit card bill with whatever money they have left over after food and doctor bills and entertainment. But the point is -- they're buried in debt before they start out in life. And today they accept that as normal. We old codgers from the Depression era see it differently. For instance, every house I ever bought I bought with cash on the line.

So instead of saving and compounding their money, today's kids become slaves to the banks and the mortgage companies and the credit card companies. It's a bum way to start out in life -- it's a stupid way. It's also the unhealthy way. It's the path to stress and anxiety.

So sad but so true.

The Gold Bull Market

Since gold is now back up to its high of $570 per ounce, clearly demonstrating its bull market, I thought it appropriate to address a couple of ways one can take advantage of this opportunity.

My personal preference is to acquire, first and foremost, a personal holding of gold bullion. This can be in the form of American Eagles, a coin minted by the U.S. government, Krugerrands, minted by South Afrrica, Helveticas, minted by Austria, Canadian Maple Leafs issued by Canada or a variety of pre-1933 gold coins issued by various European countries. All of these represent gold in hand and as such, is the safest form of savings.

After this is done, one can venture into the stock market where shares are available from companies who mine gold. Shares in gold stocks offer a leveraged opportunity because as the price of gold goes up the company's profitability increases exponentially.

I have included several links below for examples of solid companies that bear consideration for those interested in this play.

Bema Gold Corporation is an intermediate gold producer with mines and development projects in Russia, Chile and South Africa. Bema operates the Julietta Mine in Russia, the Petrex Mines in South Africa, and is 50% owner of the Refugio Mine in Chile, which recommenced commercial production during the fourth quarter of 2005. By developing its flag ship asset, Kupol in Russia, and continuing to advance the Cerro Casale Project in Chile, Bema is one of the world's fastest growing gold producers with potential production of one million ounces of gold annually by 2009.

Coeur d'Alene Mines Corporation is the world's largest primary silver producer and a growing, low-cost gold producer. In 2004, the Company produced 14.1 million ounces of silver and 129,000 ounces of gold.

Goldcorp is the world's lowest cost and fastest growing multimillion ounce gold producer with operations throughout the Americas and Australia. Goldcorp has agreed to acquire the Canadian assets of Placer Dome (TSX, NYSE: PDG) from Barrick Gold (TSX, NYSE: ABX) upon consummation of Barrick's friendly bid to take-over Placer. This transaction is expected to close April 1, 2006, making Goldcorp the third largest gold producer in North America. With the addition of the Placer assets, Goldcorp's gold production in 2006 is forecast to be approximately 2 million ounces, on an annualized basis, at a cash cost of approximately US$150 per ounce. 2007 gold production is expected to reach almost 2.4 million ounces at less than $175 per ounce

While the text for each of the companies was lifted from their websites and should probably be taken with a grain of salt, below I show their performance since the end of December 2005.

BGO	BEMA GOLD CORP	53.36%
CDE	COEUR D ALENE MINES CORP	30.04%
GG	GOLDCORP	28.26%

Not a bad return on investment for 3 months.

The Benefit of the Doubt

There are basically two arguments employed against selling the administration of terminals in American ports to Dubai. The first is that we will be less secure if we give Arabs easier access to our ports. This argument, when made by Democrats, causes us to double up in a giggle fit. The Dems, who had to look up the word "security" in the dictionary to see how it was spelled, have absolutely no credibility on this matter at all. They scoff at reports that Saddam did in fact have WMD, they've opposed the Patriot Act, they've opposed profiling airline travellers, and they have fought the administration on whether it has the right to listen in on phone calls made by foreign terrorists to this country. Now they expect us to believe that suddenly they've travelled the Damascus Road, had the scales fall from their eyes, and are all for treating Arabs like pariahs.

In any event, the argumentum ad security doesn't seem to be holding up to scrutiny since it appears that whatever security there is now, as minimal as it apparently is, will not be affected no matter who manages the terminals.

The second argument is a bit more compelling, and that is that we should not be entering into business agreements with nations which supported the Taliban and Hamas and boycott Israel. With this it is hard to disagree. We wonder, though, what, if anything, the quid pro quo is. Does the U.A.E. provide us with important military assets in the Straits of Hormuz that would be absolutely essential if war comes with Iran? If so, even the Israelis would probably prefer that we do the ports deal rather than be hamstrung in a conflict with the country that threatens to incinerate them in a nuclear fireball.

The problem is that we just don't know what's in the details. Thus it comes down to a question of whether we trust the President to do the right thing for the security of both the U.S. and Israel. His track record suggests that on this he deserves the benefit of the doubt. We're leery, given his fecklessness regarding immigration, about his willingness to be loosey goosey with who has access to our ports, but we're also encouraged by his almost preternatural resolve in the war on terrorists.

It's not an easy call, but, heck, anything that has so many lefties squealing like pigs in a barn fire can't be an altogether bad idea.

I Must Be Ignorant

I'm sorry. I guess don't have a clue how things work in international circles.

Take this link for instance where it states:

The sides have agreed to a fresh 45-day review but DP World has pledged to complete the deal, subject to a ruling in the High Court in London today. "It has certainly reinforced the perception here that Arab investors can be singled out," said Steve Brice, head of Middle East research at Standard Chartered bank in Dubai.

Ironically, the comments came as US commerce secretary Carlos Gutierrez traveled to Saudi Arabia to urge the country to be more welcoming to foreign investment. The High Court is expected to rule on whether to allow the scheme of arrangement that will seal the $6.8bn merger, after hearing arguments from Eller & Co, a Miami joint venture partner of P&O which claims the deal will adversely affect its business.

My utter confusion is about the "High Court" mentioned in the article. What in the world does this "High Court" have to do with the issue of a Dubai company taking control of our ports? Are we now subject to a "High Court" located in London? I sure don't know. If not, why is the "High Court" then wasting it's time hearing and ruling on the issue?

If any of our readers can enlighten me, I sure would appreciate it.

The whole issue fails to answer the question of why we need any foreign country managing anything in America. Why is it that we can't manage our ports ourselves? It seems that the concept of globalization means America gives America away to any and every other nation as though there were a force at work that is determined to reduce America to third world status. Could it be that this "force" is responsible for our manufacturing and services jobs being out-sourced which is essentially gutting America?

I believe the initial warning shot was fired over the bow of the USS America when China tried to buy one of our oil companies. That effort was thwarted by congress as a non-starter. But the rest of the world is holding hundreds of billions of our dollars and rather than hold them in reserve (while they continually lose value) they want to invest them in American assets. Now an Arab country is attempting to convert their dollar holdings into U.S. port ownership.

From the link above,

The US could lose a host of much-needed inward investment as foreign countries disturbed by the row over the control of US ports look elsewhere to invest money

Ah, it looks like the Bush administration realizes that it has to cave in to Dubai or there will be a price to be paid. After all, we can't expect foreign countries to accept our fiat dollars if they can't use them to conduct business with us now can we? Life was much better when the foreign countries simply invested their dollars in U.S. treasury bills to finance our debt but it seams that now they want hard assets for their dollars rather than U.S. debt.

There's no doubt in my mind that this deal will go through. It has to. For it to do otherwise would put into question the full faith and credit of the U.S. dollar and you can be sure Bush has been made aware of this.

Plato's Cave For Modern Man

Imagine that the year is 2030 and computer technology has advanced to the point where a sufficiently clever programmer (you, for example) can write software that would project beings on the monitor's screen that can potentially evolve from very simple forms to highly complex structures capable, mirabile dictu, of rational thought.

One evening you download the software that confers upon these creatures this marvelous potential and sit back to watch what they'll do with it. Eventually, after much morphing and mutating, the creatures attain a level of mental ability at which they are capable of reflection, cognition, and language. They begin to communicate among themselves, asking questions about their world and their existence. To them their world (we'll call it "screen world") is a three dimensional space since, although they are confined to a flat screen, they think themselves, like characters on a movie screen, to move in all directions. You're very pleased with your creation. You even find yourself growing fond and attached to these creatures, which you dub "screenies."

As the night lengthens, you watch in rapt fascination as one of your screenies begins to think deeply about what exactly it (let's assume it's a "he") is. At first he explains himself in terms of shifting phosphor dots, but this, he realizes, is only a superficial level of explanation, and the screenie isn't satisfied with it. There must be a deeper understanding, a deeper level of reality, a reality that lies beyond the abilities you've programmed into the screenies to apprehend.

He and his fellows do some mathematical calculations and come to a breathtaking conclusion. The "ultimate" explanation for the population of creatures in screen world is a level of reality that they can never observe or visit, but which must exist. The equations demand it. They realize that there must be a whole set of complicated phenomena working to produce emanations from a multi-dimensional tube (Cathode Ray Tube) that somehow generates the relatively "flat" world they inhabit.

They do more calculations and come to an even more astonishing discovery. The CRT must be controlled by an even deeper level of phenomena: electrons, circuits, and microchips and who knows what all else. Finally, awed by their findings, they realize that this whole theoretical edifice they've constructed must be run by an information source, a set of algorithms and codes, that exists somewhere but is inaccessible to them.

Your creatures are very excited. They have plumbed the basic laws, parameters, forces and material constituents of their world. They don't know where these ultimate elements come from or how they came to be organized in the fashion they are, and indeed they're convinced that they can never know this for certain. They have taken their investigation as deep as it is possible for them to go, they believe. The rest they simply accept as a brute fact. A given.

Then these marvelous beings, which have really sprung from your creative genius, draw a disappointing philosophical conclusion. Having explained their existence in terms of the ultimate physical constituents and laws they've deduced from the phenomena of their experience, they conclude that that is all there is to be explained. Those circuits, microchips, electrical energy and even the software are all that's involved in generating them and their world. It's an amazing thing, they agree, it's highly improbable they acknowledge, but there you have it. There's no need to explain it any further, nor any way to explain it even if there were a need.

Screen world is, in their considered opinion, totally explicable in terms of the machinery in front of which you sit shaking your incredulous head. You're delighted that your creatures were able to reason their way so far toward the truth but dismayed that they lacked the wit to see that anything as fantastically complex as the laws and processes that generate their world cries out for even deeper explanation. Why, you wonder, don't the screenies realize that something as amazing as they and their world don't just happen through blind luck? Why don't they recognize that screen world demands an intelligent cause as its truly ultimate explanation?

You decide to tweak the program. You write the code for another being, one that is, perhaps, somewhat of a cyber-replica of yourself. You will in a sense visit screen world yourself through this "agent." He contains much of your knowledge about the reality beyond screen world, and when you download him into the computer up he pops on the screen. You've programmed this agent to tell the rest of the screenies that their world, the world of the monitor and even the deeper world of the computer, is an infinitesimal fraction of the really real.

Your agent proceeds to explain to them as best he can that they, contrary to their belief, actually inhabit only two dimensions and that all around them lies a third dimension that they could never perceive or comprehend but which nevertheless exists, and that even now you, their creator, are observing them from outside the screen in another world that they cannot begin to conceptualize, much less observe, from their "prison" within the screen.

Your agent reveals to them, moreover, that you inhabit a reality infinitely richer than screen world, an idea they unfortunately find wholly preposterous. He tells them that as wonderful and impressive as their discoveries about their world are they've really just scratched the surface of understanding the really real and that, indeed, they aren't actually "real" themselves at all. They're simply epiphenomenal electronic manifestations of ideas in your mind, a congeries of shifting dots of color on a flat screen. They're in fact nothing more than virtual beings.

They scoff at all this. They grow angry. They tell your agent to get lost, his message is confusing and misleading to the young and impeding progress toward the goal of making screen world a better place. They wish to hear no more of the his insane, superstitious babblings. They are the "brights" in screen world and they will stick to science and leave his untestable metaphysical speculations to the priests and shamans among them.

When the agent persists in trying to persuade them that mere mechanical processes could never by themselves produce such complex creatures as screenies, that the algorithms and coordinated flows of energy and pattern in their world, as well as the material organization of the computer, must have been intelligently engineered, they sneer and refuse to allow him to speak such nonsense any further.

They reason among themselves that their existence may be improbable, but what of it? Had their world not been the way it is they would not be there to observe it, so it's not so extraordinary after all. Others say that there are probably a near infinite number of worlds like theirs, and that among so many it's not so astonishing that there'd be one possessing the properties that screen world has and boasting the creatures called screenies.

You're surprised, and a little hurt, that they react this way. You can't believe that having come so far they would refuse to entertain the idea that there must be more to the origin of the information that infuses their world than just blind matter, brute force and random chance. But they're obstinate. They have all the explanation for their existence they care to have.

To be dependent upon unthinking processes is one thing - they're still superior, after all, to the processes and forces upon which they are contingent because they can think and those processes can't. But to be dependent upon a being who is so thoroughly superior to them in every way is, well, degrading. So that they might appreciate you, you entertain briefly the idea of adjusting their software in such fashion as to make the conclusion that an intelligent programmer has created them ineluctable. You decide against it, however, when you realize that compelled appreciation is no appreciation at all.

And so, with a sad sigh of disappointment and resignation, you shut down the computer and go to bed.