Updated: Saturday, July 17, 2004
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Set-Up for a Market Break
The question for small investors is simple: "Which way will it break? Up or down?" Answering that one correctly could save thousands in the retirement portfolio. As CNN noted this week, oil is once again back at around $41 a barrel and demand is at 20-year highs: http://money.cnn.com/2004/07/16/markets/oil.reut/
The stock market which closed this week at 10, 139.78 was down 73 points from the previous week's close a tad above 10,213.22. It seems everyone is watching oil. Although the consumer price index was up at an annual rate of just under 4%, there were enough categories showing declines that one might argue that inflation fears are overblown. The Federal Reserve has been watching the impact of energy price hikes and in "whistling in a graveyard" fashion slapped the label "transitory" on them. In their dreams. Peak oil, I'm afraid might be real.
All of which sets us up for a violent market move in the weeks or months ahead. When a market gets into a trading range, broker wisdom is that pressure is building internally for a violent move. If one accepts the happy talk being dished out by the administration, there should be a violent move to the upside. On the other hand, a more rational view of energy as a limiting factor, and OPEC is only able to talk about raising output, the bears have a strong case as well.
There are a number of indicators that might give you some advance notice of which way it will break. You can look at auto sales figures, for example. Another might be AMG's excellent ($250/annually) weekly reports of equity and bond fund inflows and outflows. When you see equity outflows pick up, you might expect the market to come down as consumers pull their money out and the equity funds sell stocks to raise cash. http://www.amgdata.com/.
Pre-selling Iran War
There's an odd report out today that the 9/11 Commission report will find something of an al Qaida - Iran connection. http://www.time.com/time/nation/article/0,8599,664967,00.html The story will no doubt get much play, but seems to boil down to some of the Sept 11th hijackers passed through Iran between October 2000 and February of 2001 coming in from Afghanistan. The report will go on to say that Iranian officials approached al Qaida about future collaboration in terrorist attacks.
But here's the problem in a nutshell: The intelligence that the U.S. had prior to invading Iraq was, in retrospect, pretty flimsy stuff and was only relied upon because it fit George 43's predisposition to strike back at Saddam Hussein as a family feud left over from Gulf War I. If the 9/11 Commission report doesn't name the Iranian official - and more importantly provide a robust trail of evidence so the American public can understand how the allegations came to be, then it is, in our view, extremely questionable.
Naturally, once we have the next terrorist attack on American soil, the Department of Homeland Security will scrutinize every web site on earth looking for seditious material, so I'll again state that I am a loyal American Citizen who is concerned with how the present cast of characters in Washington has shredded whole sections of the Constitution, Bill of Rights, and other legal assurances of our Freedom.
When that next attack happens, I think the American people will be rightly concerned about whether the attack is a genuine militant Islamic event or a scripted false flag event for the benefit of the corporatist elite that is the power behind the curtains in every major country. Money pulls the strings.
Meantime, in Iraq, a senior Sunni Muslim cleric is calling for a Holy War against the U.S. http://www.rense.com/general54/jihad.htm This at about the same time as a car bomb targeting the Justice Minister of the U.S.-installed government barely escaped death http://news.bbc.co.uk/1/hi/world/middle_east/3902465.stm The bomb blast killed four, or five of his body guards, depending on which version of the story you read.
Easy Time for You Know Who
Give me a break. Ms Stewart - Born Martha Helen Kostyra ( http://en.wikipedia.org/wiki/Martha_Stewart ) the ex-stock broker - got what anyone would have to call a light sentence Friday: 5-months in prison, 5-months of "home detention" except for those 48-hours of shopping and work per week. Then she audaciously compares her ordeal with that of Nelson Mandela: http://edition.cnn.com/2004/BUSINESS/07/17/martha.stewart/ You try the same crime and see if you get off as easy.
Build a Bigger Bomb
Not much play in American media about plans to develop an experimental 30,000 pound "bunker buster" bomb. The story from Arab media: http://english.aljazeera.net/NR/exeres/7241AE96-FAC3-40CF-9DE6-670B1F16F703.htm This latest improvement in killing people should be tested in 2007 says the report. This will help U.S. munitions builders keep up their output and hence profits.
Wildfires in the West
Although it looks like we could see some rain showers around the West today, the overall picture is not very pretty as wildfires rampage: http://news.bbc.co.uk/1/hi/world/americas/3902345.stm Also of interest, James McCanney was on George Noory's AM Coast-to-Coast show last night explaining how we might expect to see global weather extremes and such from the suns latest outburst of sunspots. See his site at http://www.jmccanneyscience.com/ for details. Worth following because extreme weather will cost money and possibly bring crop failures on a regional basis... Wildfires as of Friday had claimed more than 3.7 million acres burned this year among 42,098 fires. http://www.fema.com/emanagers/2004/nat071604.shtm
Riggs Bank Update
I suppose you may have already caught the story about Riggs Bank being purchased by PNC for $779-million in cash and stock. Story Link. You may have also been aware that Riggs was named in a congressional report this week for facilitating certain transactions by former Chilean dictator Augusto Pinochet. The bank was also fined $25-million for money laundering.
Alan the tipster asks: "Isn't this the bank where Bush's uncle or grandfather is/was on the BOD?" (Board of Directors). I think he may be referring to George's uncle Jonathan J. Bush and the story from May in the Washington Post: http://www.washingtonpost.com/wp-dyn/articles/A28396-2004May14.html Good memory and point taken.
Sources who trade gold tell me that gold will shortly test $413 - and three days closing over that will spark an immediate run to $440. Interesting speculation, but first Gold needs to hit $413 and close over that for three days. It's not in the bag yet.
Our Naval Story
...has gotten the attention of Chalmers Johnson who writes in the LA Times this week that those naval maneuvers in the Pacific could spark a war: http://www.commondreams.org/views04/0715-04.htm
The point is that there's no comfortable direction for this administration. We either fight for resources now, or we fight later. Peak oil is real, so when we take over big chunks of the world to keep it from blowing up on us (meaning constricts our resources) we are in a very real sense fighting a preemptive war. Our continuing view is that this will become known to future students of history as the Manufacturer's Resource Wars - and it could go on for 30-50 years. With the caveat that it's if the climate holds together that long, of course.
More Reader Confusion
From an email a few minutes ago:
Nothing is strange. This is an election year. The people doing the report at the Gang that couldn't count straight. See following story and you can find your own clues about how they play "hide the sausage"...
Price Inflation 4.9%
Disclaimer: Remember as you read ANYTHING about inflation that prices don't go up. The purchasing power of money supply gets watered down. When you see inflation numbers, put on your monetarist hat and remember that prices don't go up. More paper money chasing the same amount of goods makes it appear that prices go up. What's happening in reality is that the purchasing power of your money is being stolen by the printing presses of the Federal Reserve.
Inflation in June was bouncing along at an annual rate forward of 3.8% and a 3.3% gain over this time a year ago. Transportation year-to-date annual rate of inflation is running 12.9% overall and 14% for private transportation like the family Toyota. Natural gas up 10% for the year to date annual rate. Our December forecast of 13% annual inflation rate is now true for a number of categories, but we expect it will really pick up between now and the end of the year. The details at http://www.bls.gov/news.release/cpi.nr0.htm but here's the guts of it.
Table A. Percent changes in CPI for Urban Consumers (CPI-U) Seasonally adjusted Un- Compound adjusted Expenditure Changes from preceding month annual rate 12-mos. Category 2003 2004 3-mos. ended ended Dec. Jan. Feb. Mar. Apr. May June June '04 June '04 All Items .2 .5 .3 .5 .2 .6 .3 4.8 3.3 Food and beverages .5 -.1 .2 .2 .2 .9 .2 4.9 3.7 Housing .2 .4 .2 .3 .4 .4 .3 4.1 2.7 Apparel -.3 -.3 -.1 .9 .0 .3 .2 2.0 .5 Transportation -.2 1.7 .7 1.1 .1 1.7 .8 10.9 5.7 Medical care .5 .2 .6 .6 .4 .3 .3 3.8 4.6 Recreation .1 .0 .3 .3 .2 -.2 .3 1.1 1.2 Education and communication .2 .1 .3 .1 .3 .0 .2 1.8 2.1 Other goods and services .2 .3 .2 .2 .1 .1 .1 1.3 2.0 Special Indexes Energy .3 4.7 1.7 1.9 .1 4.6 2.6 33.5 17.0 Food .5 .0 .2 .2 .2 .9 .2 5.1 3.7 All Items less food and energy .1 .2 .2 .4 .3 .2 .1 2.3 1.9
Consumer prices increased at a seasonally adjusted annual rate (SAAR) of 4.8 percent in the second quarter after advancing at a 5.1 percent rate in the first three months of 2004. This brings the year-to-date annual rate to 4.9 percent and compares with an increase of 1.9 percent in all of 2003. The index for energy, which rose 6.9 percent in 2003, accelerated in the first half of 2004 to a 36.0 percent SAAR and accounted for about half of the advance in the overall CPI-U during the first six months of 2004. Petroleum-based energy costs increased at a 65.5 percent annual rate and charges for energy services rose at a 10.0 percent annual rate. The food index rose at a 3.2 percent SAAR in the first half of 2004. The index for grocery store food prices, which decreased at a 0.2 percent annual rate in the first three months, advanced at a 6.7 percent annual rate in the second quarter of 2004. The index for dairy products, which was unchanged in the first quarter, and the index for meats, poultry, fish, and eggs, which had declined at a 3.7 percent annual rate, each turned up in the second quarter, advancing at annual rates of 47.9 and 8.5 percent.
Biggest price hikes were in the Northeast with the least in the Midwest and West.
Six month rates by category at http://www.bls.gov/news.release/cpi.t02.htm
U.S. Above Law
We note with interest that House leader Tom DeLay is not giving up on his plan, backed by the Bush administration, to put U.S. soldiers above accountability at the International Criminal Court. Delay is quoted as calling the court a "kangaroo court" - while at the same time, the US have gone around and signed military amnesty deals quietly with 90 countries anyway. http://news.bbc.co.uk/1/hi/world/americas/3899825.stm
Whilst it is interesting to recall Nuremburg and the "I vus only followink orders" of WWII, we observe that following a war the winners get to judge the losers - not the other way around. Yes, it's good we won WWII, but behaviors like use of nuclear weapons and fire storms for cities like Dresden were never reviewed by Japanese or Germans.
What does have our undivided attention is how the International Criminal Court could be a mechanism to prosecute multi-national corporate misdeeds - and that's probably why the U.S. has lined up against the idea. Think of globalism as a smorgasbord of unintended consequences. Clearly, the right-wingers want the profits of globalism, but those pesky control mechanisms or accountability - these are something to be avoided.
This desire for globalism ala carte is a key reason why the U.S. has decline in international stature. Countries which are just as globalistic in outlook, including Germany, France, and the UK have signed up, http://www.icc-cpi.int/statesparties.html, but perhaps they comprehend that globalism breeds global crime, for which countries and people should be held accountable.
DeLay's rabid anti-court sentiment is tantamount to saying "We're above international law." And that has a very late 1930's ring to it.
Chinese Attack Subs
Interesting report from Bill Gertz's column in the Washington times this morning about a new kind of attack sub being built by the Chinese. http://www.washtimes.com/national/20040716-123134-8152r.htm One more reason to be jittery over the future of Taiwan. I mean if I had real estate holdings there, I would have dumped them long ago.
Another security breach at Los Alamos - and this time its serious enough such that all the secure work at the facility has been put on hold: STORY Interestingly, the AP report notes that national security and nuclear work won't be interrupted, so just what has stopped is not clear.
Live Long and Prosper
Aw, come on. Norway better than Texas? The UN hasn't been to East Texas apparently, because they've come out with a report saying that the best place to live in the world is Norway: http://www.aftenposten.no/english/local/article828724.ece The U.S. placed 8th on the list.
Other end of the spectrum: A UN report out says the average life expectancy for parts of Africa is down to 33-years of age. Due to AIDS. http://news.independent.co.uk/world/africa/story.jsp?story=541516
This weekend's report - out Sunday afternoon - Fire or Ice is an update on the threat of nuclear terrorism and global climate change. http://urbansurvival.com/subscribe.htm
Hyperinflation or the Curious PPI
I actual wrote this morning's column about the PPI (less the chart update) before the numbers were released because I figured there wouldn't be much point in looking at the numbers because what they actually amount to is already set by a political agenda, rather than a quest for knowledge and truth about the economy. Because of such jiggering, the job of journalists is much easier. We no longer need to bother with those complicated "facts" behind economic stories. We just write to the script and that's that.
Of course, we may from time-to-time be bothered by skeptical readers who will look at the following chart (updated from our earlier coverage for Inside Report subscribers) and ask a silly, embarrassing question.
The question is: "Have the laws of nature been somehow suspended? How can we continue to have double-digit inflation of prices at the crude goods level and have those price hikes mysteriously disappear before they get to the consumer stage? Well, there are a number of answers, but none of them is satisfactory:
Like I said, none of the answers is very satisfactory, but rather than just tell us that cost pass-throughs no longer apply in America, it would be nice if someone could explain how this economic miracle can occur month after month. Of course I could just keep my mouth shut and take advantage of the ease of writing columns like today's and simply write to the script "It's a recovery, damn it." And pigs fly.
The Money Problem
OK, so the venom about the PPI is just a symptom. What's really going on is that the U.S. dollar is in its final days. Like the Continental and Greenback, about as much debt as possible has been shifted into the paper currency. To keep the central banking game going, what we need is a bit more inflation - and that will push the Treasury up against the federal debt limit in October: LINK But that still gives the incumbent plenty of time to get re-elected. And, should things "blow up" (so to speak) before the election, it won't matter because civilian government will have disappeared. How? Thought you'd never ask:
Coup by Code Red
Michael Chossudovsky at the Centre for Research on Globalisation in Canada has a very good piece on how the elevation of the terror threat level to Code Red is really tantamount to a coup 'd etat here in the U.S. of A.: http://globalresearch.ca/articles/CHO407B.html
Dick in Trouble
What might prompt a false flag terrorist event? We keep hearing little rumbles that very shortly, in fact as early as next week, Dick Cheney could be indicted, along with some of his subordinates by the Valerie Plame grand jury. That's the speculative rumble from Chicago where a grand jury is looking into the matter, and where our sources say that GWB might be named as an unindicted co-conspirator. All speculative at this point, but likely to pop in the next two weeks.
Of course, if there's a "terrorist" attack with nuclear weapons in Chicago, that would all fit just too neatly, would it not?
Check out today's X-Class flare data:
Solar flares/sun spots and down markets are casually linked in some studies. And then there's that 7.1 earthquake in Fiji, but more worrisome to the West Coast is the 5.7 up in the Vancouver BC area this morning:
A magnitude 5.7 earthquake IN THE VANCOUVER ISLAND, CANADA REGION has occurred at: 49.73N 126.79W Depth 10km Thu Jul 15 12:06:51 2004 UTC Time: Universal Time (UTC) Thu Jul 15 12:06:51 2004 Time Near Epicenter Thu Jul 15 05:06:51 2004 Eastern Daylight Time (EDT) Thu Jul 15 08:06:51 2004 Central Daylight Time (CDT) Thu Jul 15 07:06:51 2004 Mountain Daylight Time (MDT) Thu Jul 15 06:06:51 2004 Pacific Daylight Time (PDT) Thu Jul 15 05:06:51 2004 Alaska Daylight Time (ADT) Thu Jul 15 04:06:51 2004 Hawaii Standard Time (HST) Thu Jul 15 02:06:51 2004 Location with respect to nearby cities: 115 km (70 miles) WSW of Campbell River, British Columbia 115 km (70 miles) SSE of Port Hardy, British Columbia,Canada (pop 4,000) 270 km (170 miles) WNW of Vancouver, British Columbia, Canada 290 km (180 miles) WNW of VICTORIA, British Columbia, Canada
Update: Amazing Sources!
We put out the call this morning for sources to confirm our New York "man with a bomb" story. Thanks to the reader D.M. who spied this for it - this is the one we were mentioning as getting no play:
NEW YORK (AP) _ A man who knelt
on a sidewalk with a suspicious-looking device strapped to his chest incited
a police investigation in downtown Brooklyn, officials said.
Terror Threat High
Acting CIA Director John McLaughlin says the terrorist threat against the U.S. is the highest it has been since 9/11 http://news.myway.com/top/article/id/387144|top|07-13-2004::20:47|reuters.html but if that's the case, why is the threat level at "yellow"? Can't everyone in the fight against terror learn to read from the same page on this stuff?
Maybe McLaughlin's concern has something to do with a phone call I received this morning. I got a call from a source in the financial world that asked if I had heard anything about a man with a bomb being arrested at a NYC financial institution Tuesday. The source had received the information from a client. No, I haven't seen anything about it, but if you do catch something about a possible suicide bomber being apprehended, send it along. Otherwise, it goes in the rumor pile.
But on the other hand, here's an interesting discussion group post that three nukes are in position and waiting for word to "go" http://www.rumormillnews.com/cgi-bin/forum.cgi?read=52291
Meantime, there's a report this morning in al Jazeera that a suspected top aid to Osama bin Laden has surrendered: http://english.aljazeera.net/NR/exeres/8636577D-F324-48F1-97FC-10C3F12D3AD0.htm
The so-called Patriot Act (which is not patriotic, but is an act in our view) is causing concern in British Columbia: http://www.canoe.ca/NewsStand/Columnists/London/Business_Law/David_Canton/2004/07/10/533900.html
And on our note about George Bush as the anti-Christ story below we received this interesting email:
OK, we were surprised to discover that more than 4-thousand web pages mention Bush and Mabus: http://www.google.com/search?hl=en&ie=UTF-8&q=%2Bmabus+%2Bbush
Not His Anthrax
Remember the former US weapons lab scientist who was the focus of the long investigation into his possible involvement with the anthrax attack on Congress? Well, after denying any involvement - which the Feds didn't seem to want to believe - the fellow has now sued the NY Times http://www.washingtonpost.com/wp-dyn/articles/A47994-2004Jul13.html?nav%3Drss_metro. As far as I know, Steven Hatfill was never charged with anything, but image the difficulty he would have getting a job after being named a "person of interest" by the government. The NYT according to the lawsuit defamed him by identifying him as the likely culprit.
10 dead today: http://news.bbc.co.uk/1/hi/world/middle_east/3892267.stm
Looks like a down day for stocks and another up day for gold - see gold price above. Interesting, but low volume - low interest markets to our eye. If you tried to make money shorting this market, you would have had your head handed to you on a platter.
Today's report that retailing fell by 1.1% - the largest decline in 16-months by the AP's calculations, didn't help the bull case today: http://ap.tbo.com/ap/breaking/MGBU13YFNWD.html
How to Invest in Chaos
One question to be asked by any investor is always "What is the trend? Will this particular investment make the trend my friend? Am I going with the flow?"
Today I'd like to share with you some evidence that we are going through a period of investment history that will be written of as a chaotic period where we have the build-up to a Depression happening while the real-life version of "Day After Tomorrow" is played out in slow motion, so slow in fact as to blind many people to the reality of events.
If you're an Inside Report subscriber, you already know part of the reason why, following the peak in the tech stock bubble in March 2000, the market has not declined generally as fast as it did following the all-time highs in 1929. One reason, as I suggested last weekend, is that automatic trading is happening on a scale so vast as to make actual human players almost second thoughts in the markets. The NYSE reported a couple of weeks ago that program trades (trades involving 15 or more stocks simultaneously and with more than $1-million in valuation) accounted for more than 70% of the market action the week before the Fourth of July. Not exactly a market for Main Streeters.
But what really snags our interest is the notion that the Day After Tomorrow is being played out as an overlay of the economy - one that most folks don't weight in their calculations. The evidence? Oh, yeah, we've got plenty of that...
Start With the Sun
As James McCanney noted before anyone else became worried, was that there is a connection between the Sun and weather all over the earth. See McCanney's web site at http://www.jmccanneyscience.com/ for tons of details, but the headline of the day is the New York Times has now awakened to the idea that the earth's magnetic field is collapsing and possibly about to reverse: http://www.drudgereport.com/flash1.htm. What's not in the Drudge Report summary, and which is a key fact to keep in mind is that the sun's polarity reversed something like 4-years ago. And, we've got a huge group of sunspots (associated informally with market declines) due to show up over the next week or so http://spaceweather.com/.
In noting the connection between the sun's behavior - the oddest in the whole history of man's watching the sun - McCanney draws our attention to the sun-earth weather link in his two books (both of which are interesting to read). As above, so below, in a real sense. With the sun at these multi-thousand-year (+) extremes, we are seeing in today's headlines a lot of weather related news that is explainable in this context:
The weather is not the only story of the day, but it's a big one - a major long term trend (food shortages?) because unlike the little scandals here and there - a feature of modern man in a world of greed - this trend is one is not going away any time soon. OK, it will unfold gradually, but as it does watch for declining grain production from the wheat lands of Canada and Russia. Changes in the weather result that result in changes of the food supply - in turn may causes other problems - like wars.
Over the period now through 10-days from now, we should see major sunspots - and with it, more extreme weather if McCanney is right. Should be interesting times.
WX Update from Dr. Pete...
...Markiewicz over at www.indiespace.com:
If weather's a little too practical for you as a long-range investment strategy, maybe we could use Biblical scholarship. Here's one that fits under the "mark of the Beast category": School kids in Japan will be getting RFID tags (just like the tags used on software packages in computer stores) as a "security" measure: http://asia.cnet.com/newstech/systems/0,39001153,39186467,00.htm. And who is the Beast? Well, a commentary at Intervention Magazine says it could be George Bush LINK
Quick: Name one group that might agree with the Bush as Anti-Christ theory? OK, I'll make it easy for you: Environmentalists who are upset with the plans to cut down national forests: http://ap.tbo.com/ap/breaking/MGB24MQXLWD.html
Say, you like to sign my petition to require that logging companies not export their finest wood to Europe and Asia and leave those of us doing construction in the US with #2 (or knottier) junk lumber?
Terror Warning Worth
Congressional investigators are saying that the color-coded terrorist warning levels are not really very useful: LINK Aw shucks, they're so easy to understand though. A lot easier to grasp as a concept than giving the Department of Homeland Security authority to cancel your Constitutional right to vote in a scheduled election.
Oil Patch Adventures
Let's see if we can sort out Yukos adventures. a) Putin wants to seize it http://www.smh.com.au/articles/2004/07/12/1089484306704.html?oneclick=true and b) to make that easier, he'll keep the defendants in the case locked up in jail http://ap.tbo.com/ap/breaking/MGB938NXLWD.html. Yeah, that ought to do it. And, if that doesn't work, he can always call the Bush advisors for help.
Put on your reading list the story about Matt Simmons versus the Saudi oil peddlers at http://www.aramcoexpats.com/ArticleDetail.asp?article=701. Good read - and yes, my money is always on Simmons' research rather than the manufactured hype from the oil sellers.
John Crudele's column on how "commission recaptures" are used by loser hedge funds to make money with good performance or bad is worth scanning: http://www.nypost.com/business/27197.htm
"Anti-Semitic Attack" Not Real?
There was a story Monday about a so-called anti-Semitic attack on a French commuter train that got a lot of play in U.S. media yesterday. But now, as the case unfolds, it turns out that there may not have been an attack at all - http://news.bbc.co.uk/1/hi/world/europe/3889549.stm. Just more spin and sheep shaping, I expect.
Balance of Trade
Look for the market to fair OK today because the balance of trade deficit was smaller than expected by about $2-billion: http://ap.tbo.com/ap/breaking/MGBSLSD0MWD.html What do I think? You mean something like this was just a "catch up" month as delayed airplane orders shipped and things like that?
Keep Those Links Coming
I will get the sites linking to Urban Survival listed this week, but meantime, if you have a web site, please put up a link to UrbanSurvival. Let me know when it's up by clicking here and I'll put you on my links page in return.
8:20 A ET Updated Material Follows
Elections Hold Planning
Newsweek has been picking up the same vibes we've mentioned several times: That there is a chance that elections would be put on hold this fall if we have a terrorist strike inside the U.S. like the one that nearly derailed elections in Spain recently: http://www.msnbc.msn.com/id/5411741/site/newsweek/ This follows our coverage of the call for UN monitors to be placed around the U.S. to insure we don't have funny business at the polls - electronic or otherwise - see: http://urbansurvival.com/nl07032004.htm for that aspect. With one candidate now lagging, who can insure that we don't have a "false flag" terror event?
Drought = Brownouts
Great coverage in this weekend's Denver Post about how the lack of rainfall in the West could set the stage for rolling power brownouts - or worse - later this summer and into the fall. http://www.denverpost.com/Stories/0,1413,36~417~2260905,00.html Still worth reading if you haven't is Elaine's background piece at our other site: http://independencejournal.com/denver.htm
No, the drought it not a U.S. only phenomena:http://www.theaustralian.news.com.au/common/story_page/0,5744,10091590%255E2702,00.html
Due Process - IF Convenient
We've been watching the International Court decision on Israel's Stalag-type wall - because it's bound to underscore the hypocrisy of certain global powers. As the BBC story at http://news.bbc.co.uk/1/hi/world/middle_east/3883267.stm reports, "Israel has said it will ignore the non-binding ruling and is counting on the US to block any action by the UN." This ought to give the neocons another fine chance to ignore the advise of law, if it doesn't happen to square with their agenda.
If the court had ruled the barrier should stay, I'm confident that it would have been hailed as "justice" but now that it's gone the other way, it's a court without proper jurisdiction, non-binging, etc. Ignore that the issue was given to the court by the countries that dominate the UN because they would have lost a wall vote at the UN General Assembly level.. As it is, George Bush is saying the U.S. will defend the wall - and why not? We helped pay for it.
Because this site is about economics, not the inter-tribal issues of Semitic language peoples, we will simply ask what effect UN sanctions would have on the projected $5.2 billion in US taxpayer support of Israel in 2005? http://www.jewishvirtuallibrary.org/jsource/US-Israel/U.S._Assistance_to_Israel1.html At this rate, Israel receives about 30% U.S. foreign aid and clearly the Bush administration doesn't want this to change.
Keep an Eye On...
The gold price and US dollar exchange rate (charts above). See how gold was hit and the dollar was rallied off .8045 this morning a little after 8 Eastern time? Curious, huh? But go on to the first item on the reading list that follows:
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