U.S. generals for auction

The corporate lobbying for government has become an old tune for the independent thinker. This lobbying is part of a machine which has stolen governments around the world. Brave thinkers have stood up against this machine even with criticism from their peers; however, a new threat looms over the horizon which threatens all people; the lobbying of the mass media.

    The independent thinker is immune to such tactics as long as the internet remains their sanctuary, but anyone who still trusts the mass media are at risk. Sabastian Jones, a writer for The Nation has already written brilliant work on this topic, and I encourage anyone to read this article [1], but this blog will focus on U.S. retired generals. The most recent issue is retired general McCaffrey who has been a returning correspondent on the mass media outlets. This last week the general held a meeting with CBS corporation executives. He made outlandish claims such as [2]:

“We should not view the Iranian rhetoric as empty threats. They are likely to further escalate. There is great opportunity for miscalculation on their part. . . . They will not under any circumstances actually be deterred from going nuclear. They will achieve initial nuclear capability within 60 months.”

“Israel would welcome such a confrontation. They have an existential threat to their survival looming in their very near future.”

“ The Israelis lack any credible conventional military power to counter Iranian threat. their forced option would be a pre-emptive nuclear strike”

“high risk situation--with a significant probability of Iranian escalation in the coming 90 days”

This meeting with CBS executives is only the tip of the iceberg, and general McCaffrey has been saying similar rhetoric to the American people since 2009. Well, the reader may be thinking; he is a former military general of the United States; it is not possible he would mislead the American people. Well, I will give you some facts the mass media neglected to divulge before his “neutral analyst” opinion.

    The good general is on the board of directors for an international corporation DynCorp International, and he is not the only retired military official on the board [3]:

General Barry R. McCaffrey, U.S. Army Retired
Admiral Joseph W. Prueher, U.S. Navy Retired
General Peter J. Schoomaker, U.S. Army Retired
Admiral Leighton W. Smith, Jr., U.S. Navy Retired

What does DynCorp do?

DynCorp is a United States based private military contractor, and 96% of their yearly revenues comes from U.S. military contracts [4]. Obviously, if America is not at war, their revenues take a landslide, and these poor retired military officials suffer the slump. It begs the question if general McCaffrey has personal interest embedded into his professional opinions; however, the groovy train does not end with DynCorp. In 2010, The equity investment group Cerberus Capital Management acquired DynCorp International [5]. This investment group has a history of buying assets, and they will build these assets with the intention of selling for a large profit margin. Now, If America is not at war, how can Cerberus Capital Management build DynCorp International?

This investment group has a history with CBS Corporation. A deal was made in 2007 for the acquisition of local media stations from CBS [6]. The group built capital with these stations, and they sold these stations for a profit margin. I find my self asking this question. What connections did Cerberus Capital Management make with CBS, so general McCaffery could hold a meeting with CBS executives? What other possible connections have they gained in the media?

I encourage the reader to keep an eye on the defense industry because DynCorp International is only one player. If Cerberus Capital group has connections with the mass media, it can only be assumed other members of the industry have similar connections.

Fed's socialized risk program for Isreal

On Wednesday, Fannie Mae told the federal reserve that they lost money in the fourth quarter, and they need 4.6 billion dollars in aid. I have had this itching question since 2008 about these bailouts. When did the American government become a socialized risk program for the rich? We have developed a casino style economy on Wallstreet, and these supposedly brilliant investment bankers keep coming back to the federal reserve with tails between their legs. I am under the impression that Wallstreet is filled with gambling addicts, and the federal reserve funds their uncontrollable gambling habits. If the reader had a relative with a known gambling addiction, would the family repeatedly loan money? If we keep giving these bankers money for poor decisions, they will not stop and continue digging our economic graves. I find this aid proposal and bailouts disheartening considering Greece's situation; I think it would be more prudent to give Greece the 4.6 billion dollars in aid.

America's socialized risk program expands to Israel today.  The Bank of Israel announced it will begin a pilot program to invest its U.S. currency for U.S. equity:

"The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves." 

So, what happens if Israel makes a bad investment like Fannie Mae? Well, we have already repeatedly seen the Federal Reserve response to poor investing; they print more money for rich investors, so we will now cover any risk Isreal makes on U.S. equities. If Isreal's pilot program works, we could see many other foreign central banks making the same investments on U.S. equities, so the United States will be covering risks of many foreign countries in future bailouts; however, there may be a silver lining for America if foreign central banks follow Isreal.With the weakening petrodollar, foreign banks are slowly removing USD from their reserve, but if they begin these kind of programs, they may have new interest for the USD in their reserves. The United States could replace the Petrodollar with the Gambledollar.

United States enables Isreal to atack Iran

I do not support a USreal war on Iran. This war would be costly on lives, economics, and integrity of the two countries. The Israeli prime minister has been very fixated on a war with Iran. If Isreal attacks Iran and Iran fights back, The United States will back Isreal. Fortunately, technological and logistics challenges has been preventing such attacks on Iran; however, I found this stement disturbing:

"U.S. Air Force Chief of Staff General Norton Schwartz said Wednesday that Washington has prepared military options to strike Iran's nuclear sites should conflict erupt, Bloomberg reported." 

Isreal also stated it will not warn the United States if it decides to attack Iran. I am not happy with Isreal's "loose cannon" approach to Iran, and the United State's choice to still support their war hunger; however,  The chairman of the joint chief of staff General Dempsy stated that Iran is a "rational actor." This means the US's top military leader does not believe a war with Iran is prudent, but I am afraid this statement will not be enough to deter Americans from another war. A 2010 poll showed that 70% of Americans believed Iran already has nuclear weapons, and 58% of Americans believed military action is necessary against Iran. If president Obama can not get prime minister Netanyahu under control, the United States could be forced into another war; it does not want to fight, especially with Afghanistan and Iraq in recent history. Also, the developing countries India and China have close interests in Iran for its oil, so a war with Iran will cause international conflicts for the United States with these rising super powers.

Sources

U.S. has military plan should Iran conflict erupt, says air force chief
CNN Poll: American believe Iran has nuclear weapons
U.S. intelligence official: Israel will not warn U.S. on Iran strike

USD weakens over horizon

A not for profit research group American Institute for Economic Research (AIER) has determined that consumer prices have gone up this past year. This group claims that if you remove the big one time purchases made in this country such as houses, cars, furniture, etc. AIER states these big ticket items attenuates the results of inflation's "Sticker Shock" effect; in other words, the average items citizens buy to sustain their welfare. When this group removed these items from calculations, they found an increase  of 8% for the consumer price index. These kind of price increases on essential goods will place greater weight on families. More specific details from the AIER group:

"Motor fuel and transportation costs are up 21.06 percent from year-ago levels. The cost of food, prescription drugs, and tobacco also have increased faster than the government's inflation measure, rising 3.56 percent, 4.21 percent, and 3.4 percent, respectively."

These prices increases sound depressing for the consumer; unfortunately, it gets worse for the USD. An article from Xinhaunet from March of 2011:

"The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March." 

 If the Chinese remove these funds, this money will return to the federal reserve in the U.S.  This decrease in USD reserve in the Chinese central banks will add to our inflation problems in the coming years. The problems continue for the USD with a statement from central bank governor Mahmoud Bahmani:

"In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency." 

The U.S. and U.N. trade embargo have created new stresses for Iran's economy which has forced the country to trade oil for gold or other curencies. If the Iranians have the audacity to trade oil for gold, this action will spell big trouble for the USD. The reason the federal researve can freely print trillions of dollars without inflation problems comes from the petrodollar. The petrodollar is a word which refers to all oil traded is in USD. This makes the USD an essential currency in the central banks of foreign countries. This fact gives the U.S. a huge amount of credit, and it ensures American military and economic dominance.  The biggest oil trade partners with Iran are China and India which are also the most rapidly developing counties, so they are hungry for oil and USD; however, if Iran begins trading in gold for oil, the confidence of the USD will decrease, and we will be seeing more USD returning to the states adding to our inflation problems.

Citations  

Inflation: Not as low as you think

 China should cap forex reserves at 1.3 trillion U.S. dollars: China banker 

Iran Is Happy to Sell You Its Embargoed Oil for Gold