Rapidly losing luster...

My wife's obsession with this wedding is getting old, fast. I was just expect (can't really say forced, I guess) to sit through the entire 3 hour BBC coverage of the event AGAIN, beginning to end. Katie is due home from work at 10 PM, so I'm sure the fun will begin all over again... but without me, this time.

It was a spectacular event, and I have to say that I think it is flat out AMAZING that this sort of pageantry and pomp is STILL so frigging popular in England, and (by extension) the entire world. I am surprised at the 2 billion viewers, but I have no doubt it is probably true. After all, Diana was THE most recognized face alive, second only to Jesus Christ (not physically present for the last 2000 years) and Mohammad Ali (not dead, but out of the camera's eye since the Olympic Torch lighting ceremony). The British Empire spanned the globe, holding and ruling territory on every continent, and reigning over 1/5 of the world's land mass right up until the last century... so the connection with the monarchy isn't that far away for people in Egypt, India, Ireland, North and South America, Africa, and Southeast Asia. William (and his grandmother, of course) are related by blood and marriage to at least 11 of seventeen European monarchies and royal houses, and Elizabeth II still reigns as Sovereign Queen over the entire Commonwealth of Nations, which all by itself constitutes 53 separate and individual nations.

For example, in his book 1776, David McCullough describes in his opening chapter the procession of HRM King George III as he made his way from St. James Palace to Westminster (a route almost identical to the one followed by William this morning) to open Parliament. The crowd that was documented had stood in the morning quiet for hours, ten and fifteen people deep, just for a glimpse of the King as he rode past in his massive gilded carriage. They cheered and waved gloves and kerchiefs as he rumbled by, and the people who saw him remembered it and wrote about it the way Ryan recalls shaking hands with President Clinton. That was only for a bi-annual opening of Parliament, and not for a once in a generation regal event like this wedding... yet it sounds remarkably similar in scope and impact as this event was today.

Think about it... 500,000 people standing in the dark (some for more than 24 hours) just for a first-hand view of that kiss on the balcony of Buckingham Palace? I don't think so. It was for the sense of unity... of being part of a more than 1,000 year tradition that connects each and every citizen of the United Kingdom, where as we (here in America, I mean) simply watched.

On the second viewing of the ceremony, I heard the Bishop of London give a sermon to William and Kate in which he quoted both Milton and Chaucer, and I pointed out to Liz that both those men, along with dozens of other famous authors, poets, musicians and artists, are actually lying in rest immediately behind the ambo from which he was speaking! Pope, Shakespeare, Milton, Browning, Dickens, Handel, Tennyson, Longfellow, Yeats, Scott... all resting peacefully just a few feet from the apse of the cathedral. THAT is the kind of connection these people are enjoying with their collective, mutual national heritage when they celebrate these sorts of events.

The genius of the British monarchy (and I am using the classic definition of that word... the driving spirit that brings success... not an over-abundance of intelligence) is that it is now separate from the government. The PM and the Cabinet can fail utterly, the House of Commons can degenerate into a brawling bunch of hooligans (which it has periodically)... but the Royal Family is untouched by all that. Just as when someone in the Royal Family does something stupid (dressing like a Wermacht officer in the Afrika Corps for Halloween, for example), it is little or no skin off the PM's nose, either.

The government keeps things running... but the image of the United Kingdom, and specifically England, is the Monarchy and the Royal Family. They represent an unbroken line back to 1066 and the Conquest by William I. In fact, I think it is more than a coincidence that, come the 1,000th anniversary of the Conquest, there is every chance that another William will be sitting on the throne (William V)... and we can say we saw the boy get married in 2011.

Cry 'God for Harry, England and St. George!

"The Royal family has a real knack for learning from past mistakes, doesn't it?"

Ummm, no actually. They don't. Unless you mean to describe only very recent history. War of the Roses, France, Scotland, the Magna Carta's in, no wait it's out, hold on a tick it's back in. Lancaster rocks, no the Yorks rule, Lancaster, York, York, Lancaster, and lets not even get started with Ireland. These people's learning curb is measured in centuries ... and by the way, I love it all. I'm just saying, perhaps this monarchy isn't the best standard for "learning from past mistakes", that's all.

Tell ya' the truth, I'm a little disappointed. I thought I'd be more interested in this historical event (and by definition that's what it is) for having been viewing that Monarch series on Netflix at least semi nightly for some time (from Egbert to Henry VIII thus far). And I think I know why I'm not that interested. I like my Royal events a little more messy. I know for a fact that this wedding will not result in any beheadings. It wont casue any standards to be unfurled on the field of battle. No struggle for ascension. No great houses wiping each other out. No condemnation to the Tower. Just Shepard Smith noting there was "no tongue" in the royal kiss... Doesn't quite measure, up does it?

In flipping through the channels this morning msnbc had a scroll at the bottom which noted that 2 billion people watched the wedding today. Really? That's a full one-third of planet earth. That seems a bit over estimated if you ask me. Are people in Sierra Lione really looking down their morning to-do list going: "Ok, avoid rape gangs, check. Try not to have limbs amputated by machete, check. See how long the trail is on Kate Middleton's dress, check. Don't get infected by AIDS on the way to the well, check." Seriously, 2 billion? That's more than the Superbowl and World Cup, combined. I don't know, maybe I'm wrong.

I will say this though, 3 things actually. 1) I am a HUGE fan of the history of the English throne. It's perhaps 0.0001% of the US population that can explain the difference between England, Britain, Great Britain, and the United Kingdom (and I can), so don't think this is Anglo-Norman bashing, because it's not. 2) Prince William does give off an air of confidence (allow me a slight aside here). He has a presence, as Titus noted, that is the film negative of his father. And the English tend to have a history replete with that - the son being the negative of his father, for good or bad. In such instances that the father was weak, diddling, or obsessed with minutia, the son is typically a big picture leader; a war king; and physically impressive. And that's what William is. Think about that for a second. Even during the Middle Ages (just to pick a period), before photographs, television, or any other widely disseminated image, the level of support and respect the English King received from his subjetcs tended to be in direct correlation to his physical attributes. An athlete, a good hunter, a warrior. These were the expected characteristics of an ideal English King. They ruled through force of personality. And although that's true for many a monarch and emperor throughout history, I think it's a particular characteristic of the people whom would dare enforce limits on their monarchs (i.e. the Magna Carta). Even if the Crown was your birthright, their respect wasn't. You had to earn that on your own. And William is all of those things. He has that Edward III or Henry V feel to him. I have no doubt were it centuries prior he would be on horseback at Harfleur ... and that Charles would not.

I almost forgot, #3! And this is most important, above all it's why this wedding is getting world wide wall to wall coverage, and is perhaps the thing that is nearest and dearest to my heart: Kate Middleton is SMOKIN' HOT! Period. And I mean she could be in the next Transformers movie type of hot. Well done William ... it is good to be the King.

Say what you will...

The Royal Family has a real knack of learning from past mistakes, doesn't it?

William is just about everything that Charles wasn't. He shows real poise and maturity, where Charles was routinely shown to be an awkward, stuttering goof. While I can readily see the similarities between Andrew in the 1980s and Harry in the second decade of the new century... William is a complete Royal... where Charles was not.

Interestingly enough, Liz keeps making comparisons to the 1947 wedding of Elizabeth and Phillip. Coming on the heels of WWII and the devastation suffered by London and the whole of England during the Blitz, the wedding was seen as a real "revival" of English pride and honor... and I can't help but agree with her. All the trash thrown out over the last 30 years about the Royal Family and the British Monarchy by the tabloid press might now become real admiration, and I really don't think that would be a bad thing.

I mean, imagine a little national pride and media prominence of a monarchy in an era such as the one we are living in now when multinational organizations like the UN and the EU are doing all they can to bring down national, ethnic and dynastic (as well as very historic) institutions.

I think that would be a very good thing, myself.

Guilty...

I have fallen victim to the Royal Wedding... watching it almost non-stop all morning. It is fascinating watching a process that hasn't change in any substantial manner in nearly four hundred years, and in a place that has seen nearly every royal wedding since William Rufus.

I remember watching Charles and Di's wedding, and thinking that I would live to see that man ascend the throne... and now, thirty years later, watching another and thinking the same thing. Both Liz and I are convinced that Charles will not take the throne, and that William will become the first Monarch since Queen Anne to claim descent from the Royal House of Stewart (Diana was descended from Charles I and Charles II through her Spencer family line), as well as the Royal House of Windsor.

It's amazing what you can learn watching a wedding, isn't it?

A new role for atheism...

I found this article during my morning coffee, and it is simply so unbelievable that I had to share it.

Atheist chaplains in the US military? Tax payer funding for military organizations that disseminate literature expounding the virtues and values of atheism?

I find it impossible to imagine how an atheist could hope to "minister" to a dying soldier, looking for comfort and solice in his last few moments of life, with no possible connection between the two should the wounded man be a Christian. What could he possibly say? "Don't worry, it will all be over soon... nothing to worry about once you close your eyes, since there's nothing to come anyway."

I keep thinking of that old saying we've all heard thousands of times: "There are no atheists in foxholes." It is undoubtedly true, too... when death and destruction are literally milimeters away from you and anything from an ounce of lead to 2500 lbs of high explosives could erase your physical existence completely, who DOESN'T want to think that there might be something more to all of this then what we can see, smell and touch right now?

I swear these guys seem to think that the role of a chaplain is to spread the word of God to those that don't want to hear it, rather than to minister to those that already believe and are looking for spiritual and moral guidance in times of trouble and tribulation.

The most highly decorated chaplain in US Army history was Father Francis Duffy, military chaplain to the 165th US Infantry Regiment (formerly the "Fighting 69th" from New York), who won distinction and military recognition for his service during WWI. He was even considered for regminetal command by Douglas McArthur himself... but not because of his ability to "fight" (which he had, of course) but because of his ability to lead and mentor his men into such an effective fighting machine. This he did (by his own words) with his faith far more than with his fist.

What would an atheist use, when the first thing they admit to NOT having is faith?

I've said it before...

... but it's worth saying again:

What you lack in quantity, you make up for in quality.

I think its important to point out that the "gold standard" you referred to as having been removed in 1971 wasn't the system of gold bullion-backed dollars. That system of currency ended with the establishment of the Federal Reserve, and all the gold ever mined in all of human history couldn't back the number of US dollars in circulation right now. The "gold standard" that Nixon ended was the Federally mandated and controlled price of gold on the US commodities exchanges. If I'm not mistaken, it was $39.50 from before the depression era all the way to '71 with no variation or change.

Backing our currency with a commodity might not help, anyway. Even if we reduced the number of dollars in circulation, or revalued them to where they actually reflected US gold deposits, as long as the price of gold remained unfixed... the value of the dollar is as likely to rise and fall as gold. Not much is gained there, is it?

Not to drag the point on, though... your essay was excellent, and covered all the ground very very well. Nicely done, sir. What is so glaringly painful for anyone to see in all of this is that it is going to get much worse before it gets any better, no matter the affiliation of the man sitting in the Oval Office. I'm not sure were at the same point as the Weimar Republic, mind you... but you can bet your bottom dollar (if you'll pardon the pun) we haven't seen the worst that inflation can do yet, either.

I tell you, this is a bear to get your arms around...

“Leon Hess, whose oil company made more than $200 million by trading oil futures during the Persian Gulf crisis . . . said he longs for the days when oil company barons could get together and decide prices and supply levels largely among themselves, rather than depending on the violent price swings created by traders who react to rumors and headlines.

“‘I’m an old man, but I’d bet my life that if the Merc [New York Mercantile Exchange] was not in operation there would be ample oil and reasonable prices all over the world, without this volatility,’ Hess said at a hearing the Senate Committee on Governmental Affairs held on the role of futures markets in oil pricing.”

-- “Oil Baron Longs for Past, Not Futures,” Newsday, November 2, 1990

Now bare in mind, he was railing against the instability and volatility on the traditional exchanges. I can't imagine what he'd say about OTC markets.

Few times have I had to do this much research to discover simple truths about a subject. And, all modesty aside, if I (and by extension the 2 of you) find this challenging work, what chance does the average person whose passions do not lie in discovering such things have?

Each night recently, work or no, I've been watching a series entitled "Monarch", via Netflix. It is 2 parts, approximately 6 1 hour episodes per part, starting at about 450 AD with the Anglo settling of Britannia. I'm up to Henry VIII, he just married Catherine of Aragon. And I'll tell you what, I'd sooner be tasked with reciting from memory the precise line of succession, with all the Edwards, Richards and Henry's, then to pursue this further. But I will anyway, because it's important.

Titus, the question you stumbled upon (or rather I stumbled upon) is more profound then I could have possible imagined. You asked if crude oil could be purchased in currency other then the USD on these OTC exchanges. In researching this, it all came together for me.

First, let me back up. My source for much, not all, but much of this post was an exhaustive study done by Houston, Texas Bauer College of Business, or "UH." It is a fantastic source, itself source cited out the wazoo,and section III, which you can find HERE, is a 49 page dossier on the crude futures market, including extensive discussion on OTCs. The only problem is it's from 2003. However, the they did their best to address the issue in layman's terms, and it is bearable (for the most part to read). Knowing that it is dated means you need only know that every number presented has since exploded. I got through the first 27 pages before I had to stop, for a little thing called life, and get this post up before my day's "to-do's" went undone.

Now, understand first that OTC's existed prior to Clinton's 2000 Act. They were limited though because ti was a grey area of oversight. Participants didn't know if CEA, the SEC, etc rules covered these innovative transactions. As technology increased - primarily the web - these these OTC's grew in number. Enter the 2000 Act meant to clarify the oversight - and boy did it. Between the electronic technology to instantly connect parties and the Act which unleashed these parties like Tom Cruise racing to stake his land in far and Away, these things exploded.

These transactions between private parties that formally took place on organized exchanges, became so popular that what I call "semi-organized" exchanges emerged to service them. They're like a dating website. See, the traditional exchanges (say, the Chicago Mercantile Exchange) involve set fees, regulation, disclosure etc. They're intrusive (in comparison) and more expensive then conducting OTC's. But how to meet these other parties whom wish to avoid the traditional costs and sunlight? Well, enter ICE. No, not the immigration task force, but the but the International Exchange. From the UH study:

"...in 2000, several investment banks and oil companies formed the Intercontinental Exchange (“ICE”) to trade in OTC energy and metals derivatives. Located in Atlanta, Georgia, the ICE is an electronic exchange open only to large commercial traders. Rather than provide a counterparty to all trades, as do the NYMEX and IPE clearinghouses, ICE acts only as a posting facility for bids and offers, which the traders can then choose to accept or reject. Any large commercial company can trade on ICE’s facility without having to employ a broker or pay a fee to a member of the Exchange. All trades are bilateral deals between the buyers and sellers. There is no clearinghouse and, accordingly, no requirement to post margins. The ICE website advertises: “There are no memberships. No artificial restrictions. No dues or fees beyond those incurred in the trading itself.”

And there's another clearinghouse based in Dubai. And think about it, why do business on the traditional Mercs when you can do business much cheaper and more efficiently on these "semi-organized" exchanges?

Now enter your question Titus. Can you purchase oil contracts with funds other then the USD. I looked at this for hours this morning. And I have to conclude "yes." I could not find a direct standard on these ICE style exchanges, but I soon realized that was because their are none. AS the report makes clear, they just advertise the offer, you do the rest. They could be paying for them in pixie sticks for all anyone knows, let alone the Sterling. What we can know is that at some point the crude was bought with USD. It had to be. That's the deal we cut with OPEC, they only sell crude to those buying in US dollars. Enter the brewing perfect storm, and what I meant about this all coming together for me.

As Titus noted, oil sales throughout the world are denominated in US dollars. Since 1973 OPEC exports have been priced in US dollars. This marketplace gave rise to trillions of petrodollars that get cycled into international oil trade via US dollars. Since most countries rely on oil imports, they are forced to maintain large stockpiles of US dollars in order to continue imports. This creates a consistent demand for US dollars and positive pressure on the US dollar’s value, regardless of economic conditions in the US. This in turn allows the US government to issue currency below cost of currency production and bonds at lower interest rates than they otherwise would be able to. As a result the U.S. government can run higher budget deficits at a more sustainable level than can most other countries.

So think about that scenario. Here we come off the Gold Standard in 1971. Then turn right around in 1973 and cut a deal with OPEC to sell their product exclusively in ISD. So in fact we exchanged what backed our currency from one tangible asset to another. We went from a gold standard to an oil standard (ironic given the company name of America's first oil monopoly). The USD is in effect, a "petro-currency."

This is why we have been the world's standard currency, the reserve currency. Oil makes every country's, 1st, 2nd or 3rd world, economy go round. And you can't get oil without US Dollars. And just as an aside, I don't know about you, but do you think swapping gold as the asset which backs our dollar, for oil, was a "good" move? We went from gold to a deal cut with an orginization whose code of moral conduct would raise eyebrows in the Court of Caligula. And I'm supposed to feel secure with that swap?

Enter what happened 12 days ago.

On April 18, 2011, the Chicago Mercantile Exchange launched six Euro-denominated oil contracts. Pricing, margining and treasury for exchange-cleared oil price management can be fully executed in Euros. These contracts should make certain trading functions more streamlined for oil exporters to and from oil consumers in the Euro-zone, with no need to buy US dollars to effect oil trades.

Why? Why would they do this? To be more competitive with OTC markets like ICE? That's part of it, in my opinion. But it doesn't fully explain this move because even those ICE markets, those OTC driven markets, still originate with a crude purchase in USD. You can't get the oil from OPEC without a Ben Franklin, period. There can only be one explanation - they're testing the waters. See, this petro-currency of ours has allowed us to remain the dominant world currency reserve in the post gold standard era. But we have so abused the privilege, by running up deficits unprecedented in human history, that foreign markets are testing whether it's a better deal for them to move to something else. If the denomination of oil sales changes to another currency, such as the Euro or the Yen for example, countries would sell dollars and cause the banks to shift their reserves, because they would no longer need US dollars to buy oil. Forty years of petro-dollars would start to get flushed from central bank reserves. This shift in petro-currency reserve status would lower the US dollar, exponentially, near collapse.

In other words, this oil backed scenario of USD allowed us one hell of a long leash. We could screw up, even screw up bad, and the world would help to maintain the value of the dollar because they needed it to maintain their economy - to buy oil. But we have so depreciated our dollar with wreckless spending, so exacerbated the length of that leash, that we are driving up the cost of oil FOR THEM. As our Fed prints more money, the cost of oil goes up because there are now more petro-dollars get it? We're casuing world-wide energy inflation. The cost of lubricating the economies around the world goes up. And those economies are getting pissed. And think about it from OPEC's perspective. Do they want to continue to be paid exclusively in a currency that is committing suicide via spending and printing? And what are they to do if China and India et al band together and say, "we want to business in Euros"? If you're OPEC what do you do? At current the US is still the largest consumer of energy, but as China rises it is feasible they or India may eclipse us as the world's leading energy eater. Once that happens OPEC may seriously consider any suggestion of their's to alternate out of the USD. How could they not if we are replaced as OPEC's top client?

Forget everything else - if we have $14 trillion out in debt, and are furiously printing money to spend (like the current administration), and amist that OPEC switches to a different petro-dollar, causing this forty year flush from foreign central reserves (causing the market to be flooded with USD in addition to the printed money, and debt owed), brother - that's game over. We are the Wiemar Republic at that point. It's pick up your pay check in a wheel barrel time.

Now, this threat to move from the USD as the reserve petro-currency gets tossed around by people whom want to rattle the US cage, routinely. Russia chatted it up in 03', Iran has, Venezuela has. All of it went nowhere. But when the Chicago Mercantile Exchange talks about it (hell, actually does it on a limited basis) we better sure as hell pay attention, and do something. Especially when every other piece of the perfect storm I just described, is already in place.

But what is that something?

The world's need for oil is not going anywhere. And in lieu of a return to the gold standard, which has almost zero chance of occurring, ever, we must defend our status as the world's petro-currency.

1.) We have to get control of our national debt. Whether it's challenging our dominance as the world's petro-currency, or any other aspect of the US based world economy, China, Russia and India are playing for keeps. And OPEC will side with whomever emerges. We can not emerge with $14 Trillion in debt on our back, period.

2.) The OTC genie is already out of the bottle. It's in everything, in every market, in total it is a $600 Trillion derivatives market - you can't roll back the Clinton Act of 2000 without sending the entire economy of the world into cardiac arrest. What you can do is amend the oil futures commodity exemption. And by amend, I mean limit the position one can have for non delivered OTC contracts. In other words, if you're not buying oil that's going to be delivered (presumabley for use), there would be a limit to how many OTC contracts you can buy sell or trade. You base these on percentages of trade volume so as not to make the number artificial, and almost immediately archaic. Put simply, there will be less activity in OTC oil futures (less participation via the percentage limits or they'll return to the traditional organized exchanges), less flurry, less volatility. I put that chart (at the top) in this post to make this very point. Click on it if you need to, in order to see the spike demarcation line. It's clearly just after the 2000 Clinton Act (and yes, I intend to insert the name "Clinton" each and every damn time I refer to this Act, for the rest of my life - it's his, he owns it. Blaming Bush as an after thought is grasping). Such percentage based limits, as long as the percentage is based on market activity, will help (in my opinion) to smooth out the spikes, or at least those caused by speculators.

3.) It sounds trite and perhaps overly simple after all of this, but a comprehensive domestic energy plan with proven technology like nuclear, coal, and natural gas - and yes, more drilling - will serve to stabilize our position as the petro-currency of choice. Because our title as the reserve petro-currency is partly based on the ever expanding dynamism of our economy. People trust (or did) the worth of the US dollar based on the growth of that economy. In addition, the more available energy is the faster we will grow, the more we will buy from OPEC, keeping ahead of China and other rivals as OPEC's #1 customer. And believe me, as bad as that sounds, China being their #1 customer sounds much, much worse. As we all know, the high roller in the room gets the most attention, and we don't want Beijing being the big hand at the table ... getting all the comps once reserved exclusively for us.

Well... That's my 2 petro-cents.

Furthermore...

Ryan also made the point that I said previously that I had admitted the value of the dollar to have a greater impact than I had previously thought. This is very true, so let me explain...

You cannot buy a barrel of crude oil (regardless of where that oil originates from) with anything BUT a US dollar. More accurately, according to yesterday's market close, 112 US Dollars. No matter the amount, you can't buy a barrel of crude with a British Pound, or a Russian Ruble, or an EU Euro, or a Mexican Peso. Only US currency buys crude oil, so if someone in Japan wants to buy a significant amount of crude oil, they must do it by first buying dollars, then buying the oil. This is true on every trading floor of every commodities exchange in the world, from New York, to Chicago, to Moscow, to Tokyo, to Hong Kong, to Kansas City.

Since 2001, it has been estimated that the global value of a US Dollar has fallen more than 40%, which means it is 40% MORE expensive for someone dealing with US dollars in the first place to buy oil. That is bad for the US, but it is good for places like China, Japan and India... they get cheaper dollars to buy oil with.

No greater factor in the fall of the value of the dollar can be found than the Federal policy of increasing the national debt over time with no corresponding increase in Federal revenues. I can't blame this solely on Obama (Bush had his spending sprees, too, as Ryan said), but there is no question that Obama is the President that said this was the way it was going to be "officially" for the forseeable future, and that has gone a long way to making rival economies like China and India look more and more to surpass US national debt rankings.

My point... or question... is this: Is the requirement that crude oil contracts be conducted in US dollars also applicable to these OTC futures contracts that Ryan pointed out in his last post? Do those traders in future prospects barter their contracts on tomorrow's price of oil in dollars alone? Can they promise to sell oil futures with yen instead of dollars, even if the contracts for oil themselves are sold in dollars?

To use Ryan's example of the gun show...

If I wanted to buy a firearm from a licensed, regulated vendor... I'd have to use dollars. But if I bought a rifle from a private individual walking the show room floor, does the same requirement to use dollars apply? Or can I use Euros, Rubles, Drachmas, Dinari, Pesos, or Pounds Sterling?

I ask, because if the same requirement does NOT apply, then that is a further drain on the global value of a dollar, and a further weakening of the US economy due to a lack of regulation.

An aside...

I wake up in the morning, pour a cup of coffee, let the dog run around and do his "business", then I sit down at the computer and look over the world. That is my ideal routine... but it almost never happens that way.

I get my fix, no question... but it is NEVER uninterupted. No matter when I start to post on this blog, it is ALWAYS a multi-attempt process. No sooner do I start to put idea to keyboard than someone needs to check their Facebook status, or a bill needs to be paid online, or the latest song needs to be downloaded to an i-Pod... and I am off the machine for at least a few minutes. Only now, with both Liz and the kids gone for the day, do I get to belly up and run without break, if I choose to do so.

So, if my last post seems disjointed and not-quite-linear in its makeup and presentation... now you know why.

Finally... some meat and potatoes!

Two excellent posts in a row... well done.

I just woke up, and last night my car pool partner and I stopped for a few pints after work... pardon me if I'm a bit sluggish this morning, okay?

First off, let me say that my biggest surprise was that the legislation signed was by Clinton and not Bush. I don't doubt Ryan's facts... I'm just not sure how it was that I got that wrong for so long. It does call for at least a mild apology... but culpability still remains if Bush did nothing to repeal the Clinton efforts (which he obviously did).

Ryan did an excellent job detailing the manner in which the market can be manipulated (for good or bad) to drive the price of crude higher and higher, without a measurable decrease in supply. Perhaps that sort of manipulation has its uses in our very complicated and huge national economy... I don't know. What I do know is that crude oil is such a vital factor in how smoothly that economy runs that I feel it truly is something that needs to be monitored and regulated closer than any other commodity.

Does that make sense?

Anywhere between 65% and 71% of the price of gasoline in this nation is dictated by the price of crude oil... that from the EIA... but gasoline only accounts for about 20% of every barrel of crude processed. Kerosene, diesel oil, engine oil, and other distillates account for the other 80% of the barrel, and those items are JUST as vital to our daily operating in this nation as gasoline is. Every ounce of plastics in this nation depends on petroleum products for its manufacture, as does every commercially produced ounce of fertilizer used in our agricultural industry. It took an equivalent of seventeen barrels of crude oil to manufacture my 2006 Dodge Ram pickup (plastics, rubber, lubricants, steel and engine components)... and that doesn't count the cost associated with filling its gas tank at all. 14% of the cost associated with each and every food item you buy at the supermarket for you and your family is directly related to distribution and transportation costs... and that is very nearly all tied to the cost of fuel.

Now, I fully understand that one could circumvent these costs by buying local grown or manufactured goods, and reducing that average cost association... eggs, milk, dairy products, harvested produce, etc... but becoming 100% "local" is not only difficult, it might be damn near impossible in today's economic environment.

Let me try and make an analogy (always a dangerous game here at the Bund...):

Ryan gets enraged at the thought of someone (mainly me) saying that illegal immigration is a self-perpetuated problem. I have yet to see evidence that those entering the US illegally right now (and I know they are millions in numbers over the last 12 years) are any more prone to committing criminal acts than people who have lived here for generations, discounting the fact that their very presense is an illegal act, of course. Yes, there are more "illegals" in our criminal system than any other demographic group... but because of their immigration status, everything they do is "illegal" and I think lends itself to perpetuating the problem. Ryan is of the opinion that not enough is being done to stop the problem at the border or on the job (meaning the places that employ these illegals), and thus the problem grows.

Either way, no matter the opinions on the cause or the solution... the problem remains. Anywhere between 8 million and 25 million "illegal" undocumented men, women and children living within the American economy and benefiting from Federal, State and local programs that they are not now nor have they ever contributed to. That is our "status quo" here in America on the immigration issue.

There is a parallel here with the crude oil market. The status quo is NOT WORKING. Since 2000, the market price for a barrel of crude (and thus the market price for a gallon of gasoline) has gone from a 7% per month variable price to a 35% per month variable price, with peaks in price having gone over $4 per gallon at least 3 times since 2005 (which equals at least a 65% increase from the previous year's price in each event, and as much as a 115% increase). The previous 18 years saw no greater a rise in gasoline prices than the standard rate of inflation increase of 4% each year.

With each passing month, the US is reaching and even surpassing demand estimates for crude oil, either through import contracts or domestic drilling... yet the cost of fuel is now (right now, in fact) nearly 200% greater in 2011 than it was in 2004, when Bush won his second term. Seven years, 200% increase in cost, no decrease in crude supplies... something isn't working, and whatever that something is is applying far too much pressure on an already weak and fluttery economy that can't afford the hikes.

So, please tell me again... What is the solution here?

Strap in boys, this is gonna get bumpy...

Let me tell you something about my dear friend Titus. Intelligent goes without saying. And in this forum he is typically quite analytical, and deliberate in his research. Which is what makes this so ... well, you'll get the picture.

It just didn't make sense to me. I once read, under the heading "Don't Make Excuses, Make Good" that your gut is His conduit, you need only listen. And my gut was telling me that this didn't add up. Let me explain ...

I once listened to Chris Matthews, back when his show still had a scintilla of relevance, describe exactly how many "private" meetings that Dick Cheney had as VP with oil and energy companies. He even went so far as to describe his theory on how the hunting trip went in which Cheney emerged as CEO of Haliburton. This was the level (and still is in some circles) of obsession with connecting "evil big oil" with the GOP in general, and G.W. Bush in particular. So the idea that this lot would simply roll over or ignore the fact that Bush deregulated the crude oil futures market simply didn't add up to me. Not MSNBC, not the DNC, not even Obama - who's apt to blame his runny morning eggs on Bush - didn't hammer this one home. And forget hammer, they haven't even mentioned it. I mean think about it, the chance to blame high gas prices on Bush because he deregulated the playing field for his "buddies", they passed on THAT story line? Really?

So I did a little digging. First on these Reagan era regulations. Stay with me here, this is the most comprehensive research on this matter I've done and it gets a little technical, so I'll attempt to be as succinct as possible.

In 1936 the the congress passed, and FDR signed into law the Commodity Exchange Act (which replaced the 1922 Grain Futures Act). The 1936 Act, the "CEA", provides federal regulation of all commodities and futures trading activities and required all futures and commodity options to be traded on organized exchanges. Remember that term - "organized exchanges."

Within the 1936 CEA was a provision providing for the Commodity Exchange Authority which was the body that directly oversaw the futures market monitoring, enforcing, etc. In 1974 congress amended the CEA (under Ford), creating a more comprehensive regulatory framework operating in tandem (in reality taking on many of its overburdened duties) with the CEA. That body was called the Commodity Futures Trading Commission, an entity technically independent of the government, which directly enforces the prohibition of fraudulent conduct in the trading of futures. In 1982, under Reagan, this CFTC begot the National Futures Association. This is also an independent, self regulating organization meant to serve as a watchdog over the commodities and futures industry.

Now let me pause for a moment - you may be asking yourself why between 1936 and 1982 did the congress keep creating new agencies to do the same job? I asked myself that. What we must understand is this is the reality of a government so bloated as ours. If agency A seems to not be functioning to keep up with the demands of its task, then our congress(s) don't repeal A and create a bigger, better A. They simply pass agency B in addition to A, in order to take on the overflow, or the more specialized aspects of the field the agency is monitoring, who's original authors never anticipated (say, online trading for example).

Ok, back to the story. Under Reagan futures markets reached the zenith of their regulation. For the new (new as in 1982) National Futures Association (headquartered in Chicago), not only enforced anti-fraud laws, but provided mediation and arbitration for consumer complaints.

So, gas prices remain steady and smooth due to all this oversight until Bush and his cronies come in and shoot the place up, right?

Wrong.

The fundamental "deregulation" of the crude futures market, which Titus rails against (even suggesting crucifixion for its' author) didn't technically roll back any of these agencies, their budgets, or their authority. It did an end around.

Meet the Commodity Futures Modernization Act of 2000.

You may of, Titus, heard (read) my and Jambo's railing against something called an "Over The Counter" (OTC) derivative. We posted a great many rants and opinions on this financial instrument as a result of a Frontline special which cenetered on the September 2008 housing crash. By and large we were right about what they did - act as a virus throughout every major shareholder of mortgages in the land (including AIG, Leihman Brothers, get the picture of this line up?). But even that special didn't go into detail about how virulent these things are. They aren't limited to the housing market either, via this act. I'll explain ...

I told you to remember the term "organized exchanges." The primary organized exchange for stocks is of course the New York Stock Exchange. Similarly the primary organized exchange for commodities is the NYMEX, or the New York Mercantile Exchange. In fact, it's the largest physical commodities futures exchange in the world. An OTC operates outside of an organized exchange such as this. Be they stocks, mortgages guarantees, or futures, an OTC is a contract of sale between two private parties. Think gun show loop hole - to by a gun at a gun show from an authorized dealer participating in that show the consumer is subject to the applicable federal laws (i.e. instant background checks) in addition to the laws of the state they're physically in. But private citizens walk around these shows with rifles slung over their backs and a price fixed atop, like a small flag. The two private citizens can then conduct a sale completely outside of any government oversight, which is exactly what an OTC is. That OTC can take any form, under any financial market, with almost zero oversight, as long as the two participants are members of the "exempt" group.

Within the link above you'll find that those exempt groups include -

(a) regulated financial institutions;
(b) regulated insurance companies;
(c) regulated investment companies;
(d) regulated commodity pools with total assets in excess of $5 million;
(e) a corporation, partnership, trust or other business entity that either (A)
has total assets in excess of $10 million, (B) enters into transactions
that are guaranteed by certain other Eligible Contract Participants, or
(C) in the case of a transaction that relates to the conduct of the entity's
business, has a net worth in excess of $1 million;
(f) employee beneŽt plans that have total assets in excess of $5 million
and have their investment decisions made by certain independent
advisers;
(g) governmental entities that either (A) transact with certain other Eligible
Contract Participants, (B) own and invest on a discretionary basis morethan $25 million of assets, or (C) regularly enter into transactions with
respect to the underlying commodity;
(h) regulated broker–dealers (except that individuals or proprietorships
that are broker–dealers must meet certain minimum net worth or other
conditions);
(i) regulated futures commission merchants (except that individuals or
proprietorships that are futures commission merchants must meet
certain minimum net worth or other conditions);
(j) CEA–regulated floor brokers or traders in connection with transactions
that take place on or through CEA–regulated or CEA–exempt boards
of trade;
(k) individuals with total assets in excess of $10 million (or $5 million in
the case where the transaction relates to the risk management of an asset
or liability of the individual); and
(l) any other person the CFTC determines to be eligible in light of the
financial or other qualifications of the person.

I'm not a stock broker, nor a day trader, nor an economist. But I am a thinker (as I hope this post is proving), and I can't see where there is any major (or medium even) player that is not exempt. Do you?

Now let me back up just a second, This doesn't mean there is zero regulation. It means that OTC's were deregulated to the point of being regulated only under "general safety and soundness" standards. Which meant unless there was a beef in which at least one of the parties complained, there wasn't much monitoring, let alone an investigation.

These OTC's, these contracts between private parties, took various forms, the financial market is full of creative minds. In the housing market (by the way, "debt" is not allowed as an OTC), they sold OTC's in the form of guarantees on martgages. Bank A makes a loan, sells it to bank B. Bank B sells it to C. Bank C sells it to Fannie or Freddie. Now, the guarantee, the "insurance policy" if you will that it would be good, sold as an OTC, is sold to each party along the way. That sale goes straight to the sellers bottom line for the cost of the paper it was printed on (and ok, the ink). So what happened when that homeowner defaulted? Fannie goes to bank C, to collect on the insurance policy, the OTC contract. Bank C goes to bank B. After all they have an OTC insurance policy that the loan would be good too. Bank B goes to bank A. But bank A isn't there anymore. Or they don't have the money to cover the bad loan. Either way, they can't make good on the OTC. Because the economy is going South and there is a cascade of bad loans. Now the collapse doesn't just effect the guy at the end, holding the toxic debt. That toxic debt is spread amongst every seller of the mrtgage via the OTC, the insurance policy that the mortgage would be good. Guess who owed millions to Leinmahn Brothers in the form of these mortgage OTC's? AIG. And on and on, everyone who ever touched that bad loan, who sold an OTC guarantee along with it, to pad the bottom line, is infected. And why did the loans go bad? Freddie and Fannie, directed by congress, stepped in and demanded that more loans be made to "less than qualified", that is to say unqualified under normal circumstances, applicants. Minorities, the poor, they all have a "right" to a house. No down payments, proof of income (or citizenship for that matter), etc, etc. So when bank A made that loan, accompanied by the OTC guarantee, up the food chain infecting the entire hard drive the virus went.

Back to futures. How is this new class of exempt trading, OTC's, been put to use in the crude oil market?

Well, this deregulation law (the CFM Act of 2000) was passed against the explicit recommendations of a multi-agency review of derivatives markets. The November 1999 release of a report by the President’s Working Group on Financial Markets—a multi-agency policy group with permanent standing composed at the time of Lawrence Summers, Secretary of the Treasury; Alan Greenspan, Chairman of the Federal Reserve; Arthur Levitt, Chairman of the Securities and Exchange Commission; and William Rainer, Chairman of the CFTC—concluded that energy trading must not be deregulated. The Group reasoned that “due to the characteristics of markets for nonfinancial commodities with finite supplies … the Working Group is unanimously recommending that the [regulatory] exclusion (OTC's) not be extended to agreements involving such commodities.”

All the adults on the hill saw this coming. If you create an energy "sub market" in which all the heavy (and as I said, medium and small - who's not on that exemption list?) hitters are allowed to trade directly with each other, virtually out of sight (or oversight as the case is here), then that market will catch fire. And I mean "fire" in a good way if you're in on the speculating, because the activity will drive up the value of the commodity. The ease of trades between private entities creates a demand for that product. And the price of the commodity, based on the demand to get in on an unregulated market for a product we all must have, responds to that increased demand, it goes up. Trading in regulated exchanges like NYMEX is declining as more capital flees to the nearly unregulated OTC markets, such as those run by the Intercontinental Exchange (ICE). Trading on the ICE has skyrocketed, with the 93 million contracts traded in 2006 representing a 120% increase from 2005, and the 12.6 million contracts traded in January 2007 is a 166% increase from a year earlier. And its only boomed from there.

Now this is not to say, as some have alleged, that anything nefarious is occurring. Unregulated (or virtually unregulated) shouldn't be confused with "illegal." These trades are all perfectly legitimate. It's just that more firms, people and funds are likely to purchase futures contracts on oil since the 2000 Act because the purchase of that contract can occur outside the purview of real oversight, or interference. In other words, people jumped in on this because that 2000 law made it easy to. Made it attractive. So now when Libya gets bombed, and it affects the price of oil, that effect isn't a ripple, its a tidal wave, because millions and millions of more people are in that market, and are all responding to those events.

Now the president takes the alternate tact. Just last week, undoubtedly feeling the political pinch high gas prices are causing, announced that he has directed the DoJ to investigate potential fraud and manipulation in the commodities and futures market. This is predictable, and will do nothing. He's attempting to score "I'm on your side points", I think we can all see that. But what I don't get is why not use this as yet one more opportunity to nail "Bush era policy"? Why not clamor to repeal the Commodities Future Modernization Act. Why not nail Phil Gramm, a leading Texan Republican with ties to big oil (buzz words, hello?)? After all, he pushed this act in congress, sheparded it through. And he's a Bush family friend. It's the Democrat's (especially those of "The Order of Fundamental Change" variety) wet dream. It's got it all baby - oil, Republicans, deregulation, obscene profits! It's just missing one thing ... George W. Bush. I guess now would be a good time to lay out the opening of the Act's overview (which is also within the link above) ...

"The Commodity Futures Modernization Act of 2000 (the ‘‘Act’’), approved by Congress on December 15, 2000 and signed into law by President Clinton on December 21, 2000, contains provisions affecting the regulatory and supervisory roles of the Commodity Futures Trading Commission (‘‘CFTC’’) and the Securities and Exchange Commission (the ‘‘SEC’’). Two of these changes are of particular importance to the derivatives and commodities markets. First, the Act clarifes that certain over–the–counter (‘‘OTC’’) derivatives transactions are outside of the jurisdiction of the CFTC. Second, under certain conditions, the Act allows trading of futures contracts based on single stocks and narrowly–based stock indices, with oversight being shared by the CFTC and the SEC."

This is me clearing my throat at the thought of "crucifying" Bush. And believe me, I'm no "Dubya" apologist, he's ticked me off 6 ways from Sunday in various respects. But if we're going to point blame for skyrocketing crude prices, lets just make sure we suit up the right guy for the cat of 9 tails, shall we?

I should add here that just 2 weeks ago, a week before Obama's announcement that he is directing the DoJ to set up a task force (yes, please give me another task force... I'm begging you, do the task force thing - sigh), Goldman Sachs released a note to clients that put an actual dollar amount on the impact speculators were having on the price of crude. They named that premium, when oil was at $113.46, at $27 per barrel. That translates into roughly 70 cents per gallon of gas (the current national average being $3.86). I don't know about you, but oil at $86.13 per barrel, and gas at at $3.16, does sound better, but not much better. Not much at all in fact. My point? I think you were much closer to solving the problem in your gold standard post.

And as that task force enjoys coffee and donoughts on our dime, I think we might as well strap in and expect $3 0r $4 a gallon gas to be the new norm.

How was that for a lame poster? :-)

He should be dragged in front of a tribunal at the Hague...

No, not Qaddafi. I refer instead to the gentleman whom forced you to endure MSNBC for six hours.

Now see, if I were going to make a reference to my & Jambo's infrequent posting, I would of went with something like, "I haven't seen so many lame posters since my sister's New Kids on the Block phase" hehehe. Although, if I tortured that metaphor any further it'd be me in the Hague.

Well, well, well, lets see. The MSNBC "doubling domestic drilling would only reduce gas costs 0.03 cents per gallon" argument reminds me of the "ANWR wont produce a drop of oil for 10 years" argument. Do you know when I first heard that ANWR argument? About 10 years ago. What they (MSNBC & crew) willingly ignore is that if events in the Gulf States effect the price of oil in real time, then so does every other "psychological impact." If Iran announces that it will reduce its production over the next 10 years, the price goes up starting the day of the announcement, not at the conclusion of the 10 years. If the US, the most prolific consumer of energy on the planet, were to announce a serious domestic drilling and energy plan the price would also respond, the day of the announcement, rather then after every facet of the plan is in place. Such is the nature of speculation. Of course, that doesn't fit the ideological template of Mr. Matthews or Mr. Maddow (that was cheap, but I couldn't resist sinking to their level, if only for a moment), so it isn't explored, no matter how intellectually bereft it leaves them looking.

By the way, the CEO of GE is a de facto member of the president's cabinet. And guess who owns MSNBC? I'm sure if Murdoch were part of GW Bush's senior economic advisory board that Messuire Madow would see no problem with that (ok, that was the last time, I promise).

But let me back up a minute. Would Reagan era speculation curbs, well, "curb" spikes? The data suggests yes, undoubtedly. But I thought it was you Titus that pegged the "spike damage" the Bush policy allowed for as but a symptom of a much deeper problem - our straying from the gold standard.

From your post of 15 March, 2011 entitled, This Is Going To Be Painful To Write:

I might have been wrong to blame the spectre of speculation pricing on the growing cost of oil... So, what is driving crude oil prices so high, when the supply of oil is UP in the US by more than 3 million barrels per day since 2008? The US Federal Government. Here's why ...

You then went on to add: [if] the value of a dollar was [still] tied to the price of gold (meaning the value of a dollar went up and down with the value of gold, and the global value of gold was fixed at $35 per ounce), the average cost for a barrel of oil right now would be $2.60 per barrel. Translate that into the national average for a gallon of gasoline, and the price is $0.10 per gallon. Yep... ten cents per gallon of gas ... the greater decline in the value of the dollar is a major contributor to the cost of oil.

And you concluded with: Ending speculation pricing would (I still ardently maintain) take away much of the volatility of the oil market, and keep the price at a more steady, long-term level... but it won't take away the trend upwards in price.

Having reread your post in its' entirety I'm forced to ask, so why crucify Bush? You have declared that the "Nixon Shock", combined with our irresponsible spending making a fiat currency untenable, the true problem. Clearly we will continue to hurt at the pump until we ("slowly") return to a currency backed by a tangible asset. Right?

Now look, I get that the curbs would at least be a bandaid, maybe even a tourniquet. But you can't post the above argument one month then call for the crucifixion of Bush (2 days after Easter no less) the next. Not when the afore mentioned argument confessed that Bush's actions weren't at the core of the problem. I don't care what "curbs" are put in place, they wouldn't have rendered a gallon of gas 10 cents, nor a barrel of crude $2.60.

Man, you guys are lame posters...

Seriously... does anyone read this rag anymore? Anyone?

Anyway... I work all week this week in the poker room, and I'm surrounded by big screen TVs. Nice for sports coverage, but on slow days between Stanely Cup games and MLB matchups... there isn't much to watch. Today I was forced to watch nearly six hours of MSNBC because of a customer request... and it was like being tortured.

People say Fox News is biased and one-sided? Has anyone seen this channel? My God... its so mindless as to rival E! for unwatchability.

I watched pundit after pundit today come on and say that should America DOUBLE its domestic crude oil production, we'd only see a $0.03 reduction in gasoline prices at the pump. Wow... really?

That being fact, what then is causing the hike in prices at the pump? Why are there cities all across this nation with pumps charging more than $5 per gallon for regular unleaded? It's not because we are running out of crude, obviously...

So then it must be the manner in which that oil is priced on the "open" market. Right?

I mean, we certainly shouldn't expect something as vital to our nation's livelyhood as crude oil to be traded with sure and certain knowledge that the price paid is for supply available, should we? Why would we, when we can "guess" at what it will cost tomorrow, and price it accordingly? Trouble in Libya? I bet the price goes up. Unrest in Egypt? That's gonna drive that price up. Demand for petroleum products in China is expected to rise over the next 24 months? Add another $25 per barrel, please... but not on TODAY'S prices. No, no... add that to NEXT MONTHS prices.

Obama and the Liberals want no more drilling in the Gulf, offshore in Florida or California, the North Slope of Alaska... anywhere, basically. They don't want to see an increase in domestic energy production. Why? Because the taxes that are applied to every level of that industry are so vital to their "big government" plans that they can't find the ways or means to do what they want without them. Imports on crude oil have tariffs and duties just like any other import... we can't lose those!

Why is it so difficult to see that by simply rolling back Bush's opening of the trade markets in crude oil to speculation pricing would (at the very LEAST) stop the roller coaster that gasoline and other petroleum products have been on for the last four years? Why has no one explained to me what benefit that move made the US economy, and why Bush hasn't been crucified for it years and years ago? Look at the price of gasoline over the last 30 years... from 1980 to right now, and tell me where the "spikes" begin... never mind, I'll do it for you: 2001, when Bush threw out Reagan's curbs. Prior to 1980, the same spikes... same ups and downs... as 2005 and beyond. Between 1981 and 2001... the price of gas never jumped more than $0.21 EVERY QUARTER! Yes, it trended upwards... just like every other commodity on the market during that same twenty years... but no spikes that might have upset or slowed down a booming economy, which is what we had from 1989 to 1999.

I'm honestly beginning to think neither side wants to seriously address the problems with our national economy. Perhaps the GOP has as much to gain from being seen as "the SOLUTION" as the Democrats do... and thus the seemingly driving notion that avoiding the PROBLEM will benefit the nation as a whole by getting them elected... again.

How is our national economy supposed to "recover" when even the mildest piece of "bad news" from the Middle East (and when was the last time we got a string of GOOD NEWS from the region? Honestly?) can send the price of crude oil up as much as 70% overnight? Just last week we went from $91 to $121 in less than an hour... with no appreciable (or even measurable) change in supply of the oil. How is that OK?

I'd love to see someone show me I'm wrong...

Happy Easter!

Our morning is wrapping up here. It was just Jake and us, as the "big kids" were away for most of the weekend. Jake had his own mini-egg hunt, found them all (eventually) and is now plowing through his mountain of candy and sweets in lieu of breakfast (which was a delicious pairing of sweet melons and cinnamon rolls). I'm off to work in a few hours, but Liz is off and has hopes for a small but nice Easter dinner of ham and trimmings. I'll be late for that, but I'll tuck in when I get home.

I hope all of you have a wonderful day!

I tried to see if I could find transcripts of the Papal Easter Vigil address... and I did find lots and lots of commentaries on the service, but no transcripts. I know this was a big year for Benedict, with his first "Q&A" broadcast on Good Friday (coupled with the traditional Passion procession through the Colosseum that usually takes most of the night) and his traditional Easter Vigil Mass (which also takes most of the night), so the "news" of the events might have overshadowed the content of the events... but I'm still sorry to not be able to read the entire transcript.

Most of the commentaries were a bit dry and drole. Lots of focus on the "Legion of Christ" participation in the Easter Mass at St Peter's, but less on his message. With the beatification of John Paul II coming just next week, I think the focus on the now discredited founder of the order is unfortunate in the extreme... but I guess it can't be unexpected, can it?

I liked that he made the point (very clearly, it seems) that while there is nothing in Catholic teaching that says that evolution isn't fact, it is important to understand that it also isn't proof of the non-existence of God. God is the root and formative action behind all Creation, but He is perfectly within His rights to utilize whatever tools He feels best suited once that process had begun. Our immortal souls and our underlying humanity are gifts from God alone, and not products of natural selection, and they stand as proof that God has an intended purpose for us that we cannot ignore... no matter how hard we try.

Anyway... I do hope you all have a great day, and that (if you are working, as I am) your trials are small, short and easy while on the job.

Man I hate being right all the time...

Fox News is reporting that large protests are being held in the Egyptian province of Qena over the appointment of a Copt Christian to the governorship of that province.

The protests seem spurred by radical Islamists, and the new government has not said it would stop or prevent the protests... but it hasn't made any moves to remove the Christian from his new office, either.

This is where the line must be drawn: if the "revolution" is legitimate and truly seeks democratic reforms over Mubarak's regime, then the actions taken by the new government to include Copts in the newly developing political system must be allowed to stand. A "Muslim Only" position cannot be acceptable in the eyes of the West, who have (to date) supported the protesters and their calls for change.

Obama in Nevada...

Seems Obama has said that the AG is assembling a "team" to investigate claims of fraud and manipulation in the crude oil markets that might have contributed to "high" gasoline prices.

Really?

If even Ryan could admit that Reagan's 1980s limitations on crude oil speculation pricing was a "good thing" and that Bush Jr. should never have removed them in 2001, then why can't Obama simply do the same and put them back into place? The only reason I can imagine is that the original idea was "Republican" and stemmed from the most hated GOP President in recent memory for most liberals, rather than some ragingly progressive Democrat.

My fear is that this "investigation" will lead to a witch-hunt that does nothing but pit the Administration against "Big Oil" rather than fix the damn problem at the source!!!!! That's partisan politics at its best...

(sigh)

After a month at the repair shop (meaning Microsoft), the X-Box is back and fully functional... and the 8-year-old is back into his element. This is sort of a test for us here, since his behavior has been so markedly better since the game has been gone. Will his temper and frustration levels return, now that it is back? Or will the new medication he's been taking show us that the problem wasn't his games, but his meds?

As for me, I played a bit last night after work, and had a rather lack-luster performance in three Domination matches... my best K/D ratio being only 9 and 27. Most of that is lack of practice... but at least one of those matches I was up against the varsity team (undoubtedly all under the age of 12) that really showed just what Domination means in COD:BO.

Its cold and wet here today, so there won't be much outdoor distraction for Jake. I'm planning on hunkering down and supporting his campaign of slaughter and mayhem in the face of hordes of Nazi zombies.

Hey, Chicago!

Rahm is still a month away from being sworn in as Chicago's new Mayor, and even he sees that the $700 million that the city is slated to spend in deficit funding is too much. He's looking (he says) to slash $75 million from the 2012 budget, and possibly another $150 million from the 2013 budget.

Who inspired this self-proclaimed "big government" spender to see the light and work so hard (and so early) to reduce spending?

Clinton and Obama.

Seriously? Chicago, this is the man you elected? Rather than take the credit for himself (as any self-respecting Chicago politician would), he gives the credit for new-found fiscal awareness to Clinton and Obama???

The Windy City is in for a long four years, I think...

New???

Dude, without patting anyone here on the back too hard, YOU brought this "cold war" posturing between the superficially pro-Western Sunni nations (Saudi Arabia, the Gulf States, Egypt, Morocco, Fatah and Lebanon) and the fundamentally anti-Western Shi'ite nations (Iran, Syria, Hezbollah, Hamas) into our discussions as early as 2009... just go back and look at some of the older posts.

I see the parallels between the two examples, but I hesitate to endorse what the author of your article seems to say 100%. Obviously, we must support the Saudis and their allies... but they are NOT entirely the good guys here. There is every bit as much support and initiative being given to fundamental extremists within the Kingdom of Saudi Arabia and its allies as anything the Iranians are doing with Hamas, Hezbollah, and any other anti-Western organization. Strict fundamentalist adherence to sharia law is the norm now in the Kingdom, when it was the extreme exception only 25 years ago.

However, the article is right about several important points. First is that there is no "democratic" surge sweeping the Middle East. There are lots of protests and violence, yes... but little of it is based on a desire for democracy within and across the region. Radical governmental change is the only goal I see forming from the North African coast to the mountains of Afghanistan and Pakistan. Secondly, the disparity between the military might of the two camps (Saudi and Iranian) is very, very distressing... even for us, but mainly for the Saudis. Iran alone has more and better tanks then the entire combined armies of all the Gulf States, and any fighting in the Middle East is going to be dominated by armored and mechanized warfare. Should Iran actually build a functional nuclear weapon and delivery platform, Saudi Arabia might have no choice but to either build their own (a bad thing in its own right) or admit to having to depend on Israel and the US for protection under their umbrella.

Ryan is right that the only thing standing between a shooting war of Saudis and Iranians/Syrians is the four divisions of US troops still in Iraq (for the time being), and once those are gone, enough instability in a stand-alone Iraq will allow Iran and/or Syria to feel they can count enough on the support of Shi'ite Iraqis to allow them to roll right through the Iraqi frontier on their way to the Arabian Peninsula. Perhaps that is what has allowed Obama to give pause to his "plans" to have every US soldier, sailor, airmen and marine out of Iraq within the first 18 months of his Presidency? I'd bet my bottom dollar on it.

One thing the article touched on but didn't delve into is the FACT that there is going to be, within the next few years, some very large and sweeping changes within the Saudi regime. King Abdullah is well over 85 (no one knows for sure how old he is) and his immediate successor is only 6 years younger than him. In fact, ALL the next five successors to the throne are over 75 years of age. Even if the transfer of authority is smooth, if it happens often enough a sense (real or otherwise) of serious instability can only result... and Iran will not let that pass without taking advantage of it.

So, having read the article, what are your thoughts on where the US policies regarding the region need to change?

The New Cold War

I found a fascinating article from the Wall Street Journal online (you can read it HERE).

It would seem that Saudi Arabia is engaged in a real, persistent, and dangerous Cold War style confrontation with Iran. A real spy versus spy, proxy phasers engaged sort of dust up, with huge implications.

Apparently Israel was not the only one blindsided by the PoTUS' rapid movement towards supporting the ouster of Mubarak. But let me back up a moment ...

Saudi Arabia is a Sunni Muslim kingdom of ethnic Arabs, Iran a Shiite Islamic "republic" populated by ethnic Persians. Shiites first broke with Sunnis over the line of succession after the death of the Prophet Mohammed in the year 632. Sunnis have regarded them as a heretical sect ever since. Arabs and Persians have vied for the land and resources of the Middle East for almost as long.

Fast forward to 2011 and the two sides have assembled loosely allied camps. Iran holds in its sway Syria and the militant Arab groups Hezbollah in Lebanon and Hamas in the Palestinian territories. In the Saudi sphere are the Sunni Muslim-led Gulf monarchies, Egypt, Morocco and the other main Palestinian faction, Fatah. Radical Shiite clerics in Iran have been stirring sentiments in each of the Muslim nations awash in revolution, in particular those aligned with the House of Saud. Yemen, Oman, the UAE and Bahrain have all experienced recent upheavals. If one is to examine a map (and you can do so along with noted points of Iranian contributions to insurrection here), you'll see that each of these either border or are in close proximity to Saudi Arabia. This is on top of the toppling of Egypt, a nation which was seen as the chief military bulwark against a nuclear hungry Iran. For their part Saudi Arabia has contributed to the recent dissenters in Syria, Damascus being practically a suburb of Tehran.

I urge you to read the article, it's quite detailed.

What concerns me (besides the obvious energy implications) is that in the middle of all this sits over 100,000 US troops in Iraq. And with Obama's new "duty to protect" doctrine (which the UN Secretary General picked up on and ordered heli gun ships to engage in Ivory Coast in order to oust a president refusing to concede his losing election - since when does the UN shoot at people?, that's new) we could see our forces in the middle of a regional war in which there are no good guys, only degrees of bad.

Not to mention, $4 a gallon could look like a golden age if this war were to go from cold, to hot.

Yesterday's market meltdown...

It is simply amazing to me to be able to watch the strongest stock and commodity markets on the planet fall in real time when something like the Standard and Poor report comes out downgrading US debt ratings.

The DOW Industrial falls nearly 200 points, while gold goes up more than $10 in the first hours of trading. Oil came back down to $106/barrel... but only because demand is expected to fall (just a little) with the latest decline in the markets.

Today I read that Obama is taking his debt reduction plan on a nation-wide tour to build support... which tells me he's having trouble selling the fourteen year plan to people who want to see improvment in their personal finances immediately. I'm trying to think of a successful Presidential policy that carried the same scope of time as this one... what if New Deal had promised results only after 14 years had elapsed? What if the Civil Rights movement had needed 14 years to complete before it could become the law of the land? Imagine the Berlin Crisis, or the Cuban Missile Crisis, only being resolved after 14 years... would those Presidents have had to take their agendas on national speaking tours to build support?

That's the up-side of working in the poker room so much... lots and lots of TV time during work, and control of four remotes.

Hehe.

What we need...

What we need (unfortunately) is for someone to do a documentary about 9/11 the way Dick Morris did "Farenhype 9/11"... which, dispite the name, had very little to do with the attacks on 9/11.

If I were doing it, I'd call it: "9/11 Exact Change".

I know there are dozens (maybe more) films, shows and videos about exactly what happened on that sad morning and I have seen many of them. I'm simply tired of hearing these tired old chestnuts dragged out over and over again.

Birds of a feather ...

I was thinking about your question and it occurred to me that in both instances these positions reveal, on a core level, the same attitude - a fundamental distrust of government. And that is a quintessential American characteristic.

Now I am of the opinion that conservatives (at least consistent ones) object to "big" government no matter the Party in power. These "Loose Change Liberals", the "truthers" as the 9/11 conspiracy wing nuts have come to be known, seem to believe that such grand plots can be hatched only when rich white men with an (R) after their name and ties to the oil industry are in office.

But I think you are correct in saying that neither of these attitudes are anything new to the American experience - both Obama and FDR (nearly 80 years his predecessor) speak in terms of a "post-Constitutional" government. The very word "progressive" describes, in my opinion, one whom wants to progress past the restraints installed by the founding document. Both men (or their legacy) extol the virtues of rights not guaranteed under our form of government, and attempt to put in place policy to effect such "rights." And Wilson before them, TR before that, even John Adams at one point thought an American monarch might be neccessary to rule our land, and we can go on. The desire to redefine what government owes the individual is a struggle as old as the Republic.

As a side note, as a conservative I think it's a struggle my side continues to lose when examining the arc of our history from inception till today, but there are nevertheless brief respites along the way where that trend is at least somewhat arrested (Reagan for instance).

Conspiracies - the Free Mason founders. Who was involved in the plot to kill Lincoln? Was his body stolen? Remember the Maine? Did FDR know about Pearl Harbor ahead of time? The faked moon landing. Area 51. JFK's magic bullet. Our history is replete with conspiracy theories on who, what, when, where and why grand events take place. The difference with 9/11 is in few cases is the evidence so documented, so recorded, and so obvious to anyone that cares to examine it objectively that to continue to believe it was Cheney and Wolfowitz with the candle holder and c4 in the library is to immediately identify yourself as one lacking in necessary grey matter (ok, the moon landing guys have to ignore a lot of evidence too).

So next time you see these gents smile and take comfort in the fact that each of them are merely participating in old traditions; and that more often then not history assigns such beliefs the exact level of significance they deserve.

Today's discussions...

Continuing with my last post...

I talked more with my anti-Obama friend today. He didn't care for my thoughts concerning his views on Obama, because he feels that at no time in our nation's past have we ever been at a greater "crossroads" than we are right now.

My response? "Bull$#!t"

What could possibly compare in today's political environment to the divisions facing the United States of America in 1861? No one in the Tea Party movement is taking up arms and seperating from the Union. No one is enlisting in armies that are camped and poised to invade the neighboring State simply because they voted for Obama as President. Yet he feels the differences between those advocating "individual" and "State" rights are as polar-opposite to those advocating stronger, more intrusive Federal government than they have ever been since at least 1789.

"Okay," he says, "What about the bias in the media today? It has never been this bad before, has it?"

Really? Surely, Harry Truman would say it was. His entire re-election campaign was smeared top tp bottom by the "mainstream media" for the entire year running up to the election... even going so far as the "guaranty" the election of Dewey as the next GOP President of the United States fully 12 hours AFTER Truman had won BOTH the popular and electoral votes... soundly, I might add.

"Well," he continues, "When have we ever seen a President so hell-bent on changing America into something it was never meant to be? No President has done more to ignore or destroy the Constitutional fabric than Obama has!"

Forgetting Jefferson's Louisiana Purchase, ignoring Jackson's Indian Removal Act, and ignoring much of what Lincoln did in his first term of office... let's look only at Lincoln's successor, Andrew Johnson. Johnson presided over a government where eleven out of 36 States were utterly unrepresented in Government, and vetoed any moderate attempts to change that situation. No other President (including Lincoln) can boast as non-representative a government as Johnson can. As his reconstruction plans began to unravel (very early and very rapidly) he vetoed moderate attempts to keep the "black codes" out of Southern military governorships, and the beginnings of institutional segregation in the South was born. 100 years of second-class citizenship would be the "norm" for blacks in 13 States as a direct result of Johnson's Presidential actions. Even Obama can't boast that kind of "reform", can he?

One can bitch and complain all they want... and I often do... but we are not at a point in our nation's history where we can say "This is as bad as it has ever been!" Isn't that something to be thankful for, all by itself?

Man, I work with some wackos...

... and they are from both sides of the aisle, too.

One, a dice dealer from Puerto Rico of about 30 years, has seen one too many videos about the conspiracy theories behind the tragedies of 9/11. He challenged me to watch "9/11: In Plane Site" and to refute the claims made in that video. Too easy, as this really did look like a "documentary" that was made using only video clips that had been cut-and-pasted from TV footage, no supportive interviews or data, and the author-producer seemed to be filming in his grandmother's basement (after having cleaned up the empty pizza boxes and put on something other than his GU sweatpants).

The other is a self-proclaimed conservative Christian, also a dice dealer but from Atlantic City, of the same age. His assertions run to the tune of Obama and his Congressional affiliates having close and intimate ties to global socialist organizations and that his sole purpose in becoming President was to bring about the end of the "great experiment" that was the United States of America. His is the more painful argument to hear, as I can agree with much of what he holds near and dear to his political heart... but his reasoning is so far right as to make it impossible to challenge his views.

My question is: Is there a marked and measurable difference between the theories that put a conspiracy behind the attacks on 9/11 into the hearts and minds of those running the Federal government, and the theories that there is a conspiracy behind the existing Federal government to undue all that has been done since the Constitution has been penned?

I say no.

Our system of government has always been one of oppositional systems. Debate and compromise have dominated our government since long before it ever was codified into a recognizable system we could study today. Popular opinion has always dictated what the goals of the Federal system are for the terms that our leaders are elected to fill, and as such, the views and goals of government have changed radically over the intervening years.

We've had progressives like Obama, Carter, Johnson in our own lifetimes... but they are the followers of views and opinions shared with the likes of Teddy Roosevelt, Wilson, and FDR. We've had conservatives like Reagan, but he shared many of his views with the likes of Truman, Kennedy, Nixon and Ford... none of whom were (or are now) called "conservative" while they were in office.

People like my dice dealing friend from AC shout at the changes that Obama has brought to the American political landscape, and that they reflect the sort of fundamental change that Wilson or FDR wanted to see. How can I express that there isn't a President in the books that hasn't brought radical and sweeping change to the status quo during their terms? Madison, the "Father of the Constitution", damn near re-wrote the authority and actions available to a Commander-in-Chief while he was President, as did Jefferson, Adams and Washington before him.

Every President ever elected brought to the White House his own particular view of what direction the country should be going in... and that view, as individual and unique as it has always been for every example, is a large part of what got them elected in the first place. Prior to 1860, the country had seen 50 years of failed compromise policy concerning slavery within the Union, and Lincoln's promise to "preserve the Union" rather than continue the compromise is what got him elected.

I still maintain that the failure of our nation isn't due to the "progressives" that want to change it, but instead in the inability of the more traditional, "conservative" movement to show that their's is the more functional course to follow. Four years or more of "bad government" should be more than enough to fix this error... but it does not show us that America herself is failing. Far from, in fact... I think it means that America is functioning quite well after nearly 250 years.

Just curious...

How's that resolution to post every day coming for you guys? Are you guys feeling good about that one? Are we on pace for the 1000 posts by 12/31/11?

Hehe...

Talk about PTSD triggers...

That string of storms that the press is calling the "Heartland" storms which killed 24 people so far hit NEPA last night. The house lost power at about 7 PM and it didn't come back on till after midnight.

Nothing had me flashing back to the post-Katrina blues quite as much as showing Jake how to brush his teeth with a cup of water, and why we couldn't pee into the toilet and flush when we were done (I'd have had him do it outside but for the cold and rain).

Still... lessons learned in the fall of 2005 sure came in handy here last night. Not only did we have lots of candles for the house, but we have lots of candle holders. Small, sturdy (meaning not made of fragile and delicate glass) oil lamps, flashlights that work (LED rather than bulbed), and Ipods for anyone that wanted musical entertainment. Obviously, food wasn't an issue (even we can go 5 hours without cooking something to eat)... but we had lots and lots of water on hand thanks to our supply of five-gallon water bottles.

Even so, the thing that makes it seem so different is when you go outside and see no lights... anywhere. No glow on the horizon or over the mountain from the next township, no warm window glows from the farms up the lane, no street lights or yard lights anywhere to be seen. You walk outside and it is well and truly dark, in all directions. Just like we did on August 30, 2005.

Well, anyway... alls well and the juice is flowing down the lines again (evidenced by my posting this, obviously).

Scary...

I watched the "Eat the Rich" video... very good, as Ryan said. Not only does it accurately show just how wrong the current "tax-and-spend" mentality of the left really is... it also made Michael Moore look like an even bigger idiot than he already had.

What is scary is how many people, including those on the right, seem to think that the President's speech had real substance. I watched the speech live while at work in the poker room at the casino (I do love running that room... lots of TVs and no music to compete with it), and he never got much further into details for his plan than the "facts" that fiscal discipline had gotten lax in the last decade and that keeping the Bush tax breaks for the wealthiest Americans was a bad idea.

That is the one and only pillar of Obama and the Left's policy schedule: tax the rich. They forget or ignore that this is (at best) a finite and very VERY short-term solution to our problems. As the video pointed out, were the Left to follow Moore's suggestion and completely seize the assets of the richest 200 people in the country, it wouldn't pay for even ONE YEAR worth of spending that Obama has implemented in the last three, and then it would all be gone for the future, thus placing the burden on the shoulders of the very people they are "trying" to protect and assist... the poor and middle class. Were we to recall each and every soldier, sailor, airman and marine from overseas service right now, and never ship another one out again... ever... we wouldn't even reduce the government's red ink by 20%.

I saw an interesting poll this morning. It seems an online poll asked participants if they favored higher taxes, lower taxes or the same taxes as a means to reduce the deficit... and the overwhelming majority chose "the same taxes". Even I, a registered Democrat, favor a reduction in taxes... but I can't help but think that this poll (if accurate) is a telling sign of the state of the nation's view on government size and cost. They same majority of the poll said they wanted large reductions in spending immediately, rather than the same spending or greater spending. I think that America has seen the recent (and, in my opinion, ongoing) recession for exactly what it is: the Federal Government spending more than it makes for no good reason. Keep revenue streams where they are, but reduce spending to a point where the government actually reduces deficits. Maybe America isn't as dumb as people think...

More importantly, maybe America is coming to realize that people like Moore and Obama are simply wrong when they choose to look to the Government to fix all that is broken. Government distributing funds to those most in need means that the Government must first take those funds from someone else, and even the most ignorant American can recognize that it isn't a long walk from taxing the "uber-rich" (Moore's words) into poverty to taxing the middle class into poverty. This brings home quite nicely the single greatest flaw in Marxist theory that can ever be made: all forms of socialism do nothing more than reduce the average to the lowest common denominator, each and every time. The "labor theory of value" is as worthless as the rest of "Das Capital"... and the more people like Moore quote it, the more America learns this.

$1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

That's all I heard during the president's speech ... UGGGGH!

Put simply, the man will destroy us. Look, my deficit reduction plan is simple - defeat Barak Hussein Obama in 2012, DONE.

Speaking of eating the rich, you simply MUST watch this 9 minute video: EAT THE RICH by Bill Whittle. Watch what it takes to fund the government from 12:01am January 1, to 11:59pm December 31 for 2011. The data is masterfully presented in my opinion. Were I a GOP PR guy this would be worth the cost of an infomercial every night all night on par with the Ginsu knife.

I'm no golfer...

But I do love the big events. The British Open, especially when it is played at St Andrews. The US Open. And the Masters at Augusta. This isn't a "dynasty" sport, and Tiger Woods not withstanding, no one player gets to dominate the sport the way teams like the Yankees, the Bulls, or the Cowboys all have dominated their sports. Yes, you have the A-Rods, the Jordans and the Aikmans... but not even Michael Jordan could have done all he did without the Bulls behind him.

There's no one behind a golfer... not even his caddy. You play well, you do well. Bad days mean bad pays. Doubt me? Ask Rory McIlroy.

I was rooting for Rory, I admit it. I like Tiger... don't get me wrong. I couldn't care less who he's slept with, he's said his apologies, divorced his wife, and moved on. Good enough for me.... but damn, that Rory just grabbed me and I was a fan after day ONE. Charl played better golf today, no question, and he earned the Master's Championship... but Rory earned something, too.

He earned a standing ovation from the hundreds of fans that stayed the extra time to watch him walk out of the clubhouse locker room. He earned the respect of all his fellow golfers (and millions watching TV) for not giving up, no matter how thick he was in it. He took it serious (belying the comments from pundits and others when they called him "Tin Cup") and he played his best... he just had an off day. Any other day of the week... Rory plays the third round and hangs another 4 under par, walking away with the green jacket. Just not today.

Too many people poo-poo golf as boring to watch, but they are missing something extremely cool... the chance to see real individual character shine through in a major sporting event in front of millions of fans.

That's what I like to watch.

There ARE just soime jobs

The baby in the bath water...

Is it possible to mention "New Deal" yet without starting a meltdown?

Let's put away the question of whether or not FDR and Congress had the authority to tax and spend the way they did, and let's not talk about what the defined goals of New Deal were and whether or not they succeeded. There are certain undeniable facts that arose from New Deal that we can still see, feel and measure today, and none of them are greater then the expansion of our national infrastructure.

There are arguments that can be made that more than 1/3 of the entire nation was brought into the 20th Century in the decade of New Deal. More than a million miles of power lines, 600,000 miles of paved roads, 176,000 bridges and 3500 dams. Levy systems in 27 states that still have yet to be totally counted and catalogued. With the extension of the power grid to places that never had them (like the entire state of North Dakota), farms and rural communities gained more than just street lights and cheap water heaters... they gained a degree of regional prosperity that lasted for the next 50+ years.

For the last 10 years, the Army Corps of Engineers has given the United States as a WHOLE a national score of "D" in regards to the state of our infrastructure. The levy failure in New Orleans after Katrina, the I-35 bridge collapse in Minneapolis, the failure of the fly-ash dam in Kentucky. Comparatively speaking, even Italy has managed a score of "C" as a nation... and most pundits look at Italy as a "second world nation" in nearly every catagory there is.

There are two relatively small but absolutely vital bridges here in my county of Wyoming, PA that were built during New Deal. Since moving here, I can't say that I have looked at either of them very carefully UNTIL they were being repaired and replaced recently. The rails on either side of the bridge are concrete piers with wrought iron metal work between them... and the piers are just as rotted as the rusty iron work. There are holes in the road deck that show not only the water beneath the bridge... but quite a bit of rebar as well. The State DOT has been working on these bridges now since November last, and while the one-lane traffic is annoying, I can't complain that it is unneeded.

Of all the hundreds of billions that the Obama Administration spent since 2008 in "stimulus", how much of it could have gone to putting the crumbling state of our national infrastructure right? I don't mean resurrecting the WPA or the CCC... but surely there are firms and contractors that could have bid on jobs repairing bridges, roadways and dams across the nation, putting thousands of people back to work in a time when unemployment was at a 35 year high. Of all the billions spent in "stimulus" can anyone point to something tangible that can be felt/seen/touched and say THERE IS OUR MONEY AT WORK?

Will another failure of even bigger proportions need to happen to get the country to recognize this danger? The Oakland Bay Bridge has been unsafe for more than 18 years, and the Hudson River's Tappen Zee is at even higher risk. There are levy systems all around St Louis, MO that are not only unsafe, but uncatalogued and thus outside of the inspection and repair network. Since the blackout of 2003, cities like New York, Albany, Newark and Boston have known that another blackout lasting weeks (even months) is entirely possible, given the current state of the "grid" in the NE. Imagine that... 21 million men, women and children without power for as long as WE were without power on the Gulf Coast after Katrina. What kind of economic disaster could that turn into?

More later...

Parallels...

107 years ago today, Great Britain and France signed the entente cordiale, and the ground-work for the Triple Alliance between England, France and Russia was laid out.

France agreed to stop complaining about British actions in Egypt, while Britain stopped bitching about French actions in Morocco. In short, each nation's foreign policy was "shaped" (if not outright determined) by the foreign policy of the other.

In only seven short years, the real winner was neither France nor England... but Russia. After losing the Sino-Russian War in a rather epic manner, Russia managed an amazing recovery of both her military might and her national prestige through the various ententes she signed with her other European imperial neighbors.

This sort of "agreement" is the grandfather of such modern alliances as NATO. NATO was the winning "team" in the Cold War... but can it remain a legitimate factor in a Europe where the "foreign policy" is decided for the entire continent, rather than for individual nations? With each passing year, the European Union centralizes its authority into a single, pan-national government that determines and dictates economic, judicial, executive and domestic policy to each of its member states. When one individual state fails (Portugal or Ireland, for example) to maintain a standard policy, the effect is not only local, but impacts the entire continent.

The parallel that I speak of is with the Triple Alliance (or Triple Entente) of 1914. France, England and Russia all made agreements with each other that dictated how each would react given certain situational possibilities. The ententes gave each member different benefits:

England moved from a position of isolation and purely domestic security to one of greater and greater international involvement. Places like India and Egypt had been "British" for the better part of 100 years prior to the agreement, so I include them in the "domestic" schedule, of course.

France gained allies against the growing threat of German/Austro-Hungarian military growth. As the Central Powers (Germany, Austria-Hungary, and Italy) made increasing advances in naval control of the Mediterranean Sea and political control of the Balkans region, France no longer needed to be the only continental state concerned with the situations.

Russia gained the most. Increased allowances and cooperation with France and England made the recovery of Russian naval and economic wounds after the tragic losses in 1908 to Japan far more rapid than they otherwise would have been. So much so that by the time WWI begins, Russia is a real threat to the Central Powers... something they were definitely NOT in 1910.

The situation I see developing now that parallels this historic example is that of the US, the EU and Russia:

The US is still, at heart, an isolationist state that wants nothing more than to see its economy grow and prosper in a growing and prosperous international market. US concerns over NATO obligations, or (better yet) United Nations obligations, have never been lower... yet the international demand for US involvement in international affairs has never been higher. These demands come from all quarters, too... Israel, the UN, the EU, NATO, our Asian/Pacific allies, South America, and Africa all demand and expect billions in aid and support from the US each year, while Muslim states and regions tie up a greater or equal amount of blood and treasure in national and international security concerns.

The EU is feeling the same sort of pains and anxiety that the Austro-Hungarians felt for the last 40 years they existed as a body politic. An almost infinitely varied array of ethnic, linguistic, cultural and religious divisions in a pan-national state that wants uniformity and singular authority in its make up and execution of authority. They want allies in their efforts to secure European interests, both in Europe and outside of it, without having to commit European Union authority to such efforts. In short, they want someone else to police the "bad guys" while they reap the rewards of a "pacifist" nationhood.

Again, Russia is the greatest beneficiary of the agreement. Whatever Russia lacked in technology or technical ability after the fall of the USSR, they can look to gain back through the cooperation of both the EU and the US in keeping tabs on radical Islamic states and regional dictators/despots. Their economy gains from EU and US economic concessions in international trade. Their finances gain in artificial support of the ruble over the euro and the dollar. They control vast reserves of resources much of the world considers vital (oil, gas, coal, timber, metals, rare earth, heavy metals, etc), and which they can move through markets with no problems, while things they lack (technology, hard currency, monetary reserves) are provided at a discount through trade and economic treaties.

In my parallel, what is the "central" threat that this "alliance" is arrayed against? The emerging economies of China, India and the turbulent Middle East and Africa.

More and more, India is following her own path. Her century-old ties to the British Empire are now long dead, and her path to national viability has taken her to new friendships with China and Southeast Asia... friendships that do not share ties with the "West" as we know it. China is gaining ground through the almost unstoppable weight of her growing (and ever-growing) population and influence. The Middle East is increasingly less and less friendly toward its largest consumers... mainly the US and EU. It has recently proven itself very (VERY) vulnerable to internal instability, and the threat of radicals in positions of power is never very far away.

The parallels seem sound. Is this a good thing or a bad thing?