Where fuel is $100/gallon

Just imagine the size of the carbon footprint!

Think for a moment the role played by gasoline and other fuels in the current conflicts, three times greater than was the norm per soldier in Vietnam. A modern US soldier requires 22 gallons of fuel per day. American forces in Iraq alone are supplied by a fleet of 5,500 fuel trucks. The Pentagon estimates that the cost of fuel delivered to the front lines in Afghanistan and Iraq averages $45 per gallon, including all expenses but excluding legacy costs like interest on borrowing money to buy the fuel in the first place. The fuel goes into Blackhawk helicopters which use about five gallons of aviation fuel every minute they are in the air, armored Humvees which get 8 miles per gallon, Stryker combat vehicles at 3 miles per gallon, and the new generation of Mine Resistant Ambush Protected (MRAP) vehicles which are being introduced into Afghanistan in large numbers to defend against roadside bombs. The MRAPs undeniably save lives, but they are heavily armored, weighing from fourteen and up to 52 tons depending on how they are configured. The lightest ones get only 4 miles per gallon of fuel and the heaviest less than a mile per gallon. Because the money is borrowed to pay for the fuel, the final true cost to the US taxpayer will likely exceed $100 per gallon when the current level of war debt is finally amortized around the year 2017.

-- from "The Cost of War" by Philip Giraldi (November 26, 2009).

The 7 trillion dollar wars

A total of one trillion dollars has been spent already in Iraq and in Afghanistan but legacy costs to include paying off the money that was borrowed and medical care for the many thousands of wounded soldiers and marines will drive the total cost of the war past the $5 trillion dollar mark even if the two wars were to end tomorrow. Harvard economist Joseph Stiglitz is now suggesting that a final figure approaching $7 trillion is not inconceivable inclusive of Obama’s early 2009 surge in Afghanistan coupled with the escalating costs of supplying US forces. If Obama adds thousands more soldiers at the request of Generals Petraeus and McChrystal, the final tab will go higher.

-- from "The Cost of War" by Philip Giraldi (November 26, 2009).

Tell Obama to finish the job and bring the troops home--now!

Apart from any other moral or practical considerations, the United States simply cannot afford to continue feeding an insatiable war machine. Extending the conflict to Iran will likely break the bank. Someone should speak the truth to President Obama, who is pledging to "finish the job" in Afghanistan, explaining that the best way to finish is to end the sorry debacle. The President should make the politically difficult but necessary decision to stop the bleeding and bring our soldiers home.

-- from "The Cost of War" by Philip Giraldi (November 26, 2009).

Does "finish the job" mean 34,000 more troops?

John Nichols ("The Nation") on Obama's Afghanistan plan:

President Obama plans to formally announce on December 1 his decision with regard to the request from some of his more ambitious generals for a massive troop surge in Afghanistan.

But indications are that the president who was elected to set a new course for the nation when it comes to foreign policy will instead "stay the course" set by his quagmire-prone predecessor.

Obama announced Tuesday that he plans to "finish the job" in Afghanistan, and there is a growing consensus that he will agree to dispatch roughly 34,000 U.S. troops to the country.

The president says he plans to use his December 1 "finish-the-job" speech to signal "resolve to the allies while not signaling open-ended commitment to the American people."

Translation: There will be talk of an exit strategy -- with reassuring references to "benchmarks" and "off-ramps" -- but no exit strategy.

Obama indicated on Tuesday that he plans to expend a good deal of political capital to promote what is effectively becoming his war. "I feel very confident that when the American people hear a clear rationale for what we're doing there and how we intend to achieve our goals, that they will be supportive," he said.

But there is likely to be significant resistance to what many Americans -- some of whom serve in Congress -- see as a plan to steer the country deeper into a quagmire.

--from "Obama's 'Finish the Job' Talk Sets Stage for Afghan Troop Surge" by John Nichols (11/24/2009).

What Lew Rockwell is thankful for this Thanksgiving

I will give thanks tomorrow that I am an anarcho-capitalist and do not worship the emperor nor the empire.

-- from "Thanksgovernment Day" by Lew Rockwell (November 26, 2009).

Retirement planning

Americans refuse to look at their retirement portfolios and ask this question: "Will I be able to live comfortably on this capital?" With interest rates at banks under 1%, the answer is obvious: no. Yet they do not change. They do not triple or quadruple their rate of savings. They do not plan to stay in the work force until 75 or 80. They do not buy foreign currencies or gold. They do not plan to start a business to retire into.

-- from "Kicking the Can While Riding a Tiger" by Gary North (November 25, 2009).

Gold vs. the dollar

--from Chart of the Day (November 25, 2009).

Dumb and Dumber Wars

Invading Iraq was dumb. Escalating the war in Afghanistan will be even dumber. It will cost a lot of money and won’t accomplish a doggone thing except get a lot of people killed – most of whom will be civilians who want nothing more than for us to leave them alone.

The latest sanctioned leak says we’ll send another 34,000 troops to Afghanistan, and if Gen. Ray Odierno, the Desert Ox, has his way, we’ll have that many troops in Iraq through 2015 or whenever.

God help America. We have no strategy. We have no achievable objectives. We have no idea what we’re doing.

-- from "Dumb and Dumber Wars" by Jeff Huber (November 25, 2009).

They call this science?

See "Congress May Probe Leaked Global Warming E-Mails" by Declan McCullagh (November 24, 2009).

The irony of this situation is that most of us expect science to be conducted in the open, without unpublished secret data, hidden agendas, and computer programs of dubious reliability. East Anglia's Climatic Research Unit might have avoided this snafu by publicly disclosing as much as possible at every step of the way.

Uncle Sam asks for a bank loan

Everyone knows what when wrong with sub-prime. When you lend money to people who can’t pay it back, you’re asking for trouble. So, if you’re out of a job and looking for a sub-prime loan to buy a double-wide trailer you’re out of luck. Bankers won’t give you a dime.

But now, the world’s lenders are doing something just as dumb. They’re lending to governments. Imagine you were a banker. And the US government comes to you for a loan.

“Do you have enough income to cover the payments,” you ask.

“Well, no,” comes the answer. “In fact, our revenue has fallen off a little. Because of the recession, you know. Like everyone else.”

“How bad is it?”

“Uh…we spend nearly two dollars for every dollar of income.”

“Oh…and you expect us to lend you money? What do you have for collateral? What is your net worth position?”

“We were hoping you wouldn’t ask. The most recent tally of our obligations comes to $113 trillion.”

“Well, don’t you have assets?”

“We have some buildings in Washington…military bases around the world…things like that. But as a practical matter, you could never foreclose on them.”

“Oh, I see…”

What is interesting is that the world’s investors are beginning to see that the US and many other governments are bad credit risks. This is an extraordinary event. Until now, the US government has been able to finance and refinance its debts at the lowest rates in three generations. Lenders have wanted to lend the feds money, because they believed they were the safest credits in the world.

Bankers can always be counted on to find the worst investments at the worst time. They are at the tail end of the chain of insights that begins with the sharpest, most independent-thinking analysts…runs through the broker/hedge fund community…passes on to the financial journalists and the TV pundits…arrives at the lumpeninvestoriat through the popular media…and finally gets to bankers when they pick up the Wall Street Journal and read about what’s going on.

Now, the bankers are buying sovereign debt – government paper – because they think it offers a “risk free” return. In fact, it is one of the riskiest investments you can make.

-- from "The Golden Years" by Bill Bonner (November 23, 2009).

What behavioral finance teaches us about Afghanistan

See "Go with the Savvy Investors " by J. Victor Marshall (November 20, 2009).

From the "pot calling the kettle black" department (2)

Yesterday, I posted "From the "pot calling the kettle black" department ". Today, Eric Margolis has posted "The Pot Calls the Kettle Black" (November 24, 2009)!

John Nichols on Bill Moyers and Vietnam & Afghanistan

See "Bill Moyers Tells a Tale of Two Quagmires: Vietnam & Afghanistan " by John Nichols (November 21, 2009).

[O]nce again, a small circle of advisers debates the course of action, but one man will make the decision.

Shouldn't he ask Congress for a declaration of war first? And shouldn't all options be on the table? I.e., shouldn't one option on the table be a congressional declaration of peace and immediate withdrawal of U. S. troops from Afghanistan and Iraq?

Al Gore could become world's first carbon billionaire

See "Al Gore could become world's first carbon billionaire " (November 3, 2009).

Is Gore putting his money where his mouth is or is he putting his mouth where his money is?

From the "pot calling the kettle black" department

Government in Washington says the government in Kabul is corrupt!

The bursting of the 'Bama bubble

See "Approval-Disapproval Gap Drops from 56 Points to 5" by M. J. Perry (November 21, 2009).

Live Free Or Move--To Switzerland!

See "High-taxed City workers consider Swiss move" by Jonathan Sibun (21 Nov 2009).

Health insurers maximize profits by denying valid claims?

Surely some do, some of the time. But not all do, or so claims Bryan Caplan in "Health Insurance and Reputation".

UPDATE:

In an actual free market who would buy medical coverage from a company with a reputation for trying never to pay claims or dropping customers after they get sick?

--"Another Mystery of the Universe" by Sheldon Richman (November 24, 2009).

The unintended consequences of taking profits out of healthcare

Hint: they're not all good!

See "Profit: Not Just a Motive / Profits Tell Producers What They Should and Should Not Do" by Steve Horwitz.

God must be a Brazilian!

After all the recent oil discoveries in the subsalt, offshore Brazil, people are saying, "God must be a Brazilian!"

But it's not just oil that Brazil has plenty of:



-- from "Contrarian Alert, Fishy Jobs Report Details, Getting Water to China, Unemployment Benefits and More!" by Addison Wiggin and Ian Mathias

13 VS. 2,000,000

Thirteen soldiers die in Texas and it's all we talk about. Two million die in Afghanistan and Iraq and we don't notice and we don't even want to hear about it. Only 12 percent of Americans aged 18 to 24 can find Afghanistan on a map.

-- from "13 VS. 2,000,000" by Ted Rall

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The real struggle: liberty vs. power

The real struggle is between persons who love liberty and persons enthralled with power. A liberty lover refuses to exercise power over others and, therefore, has solid principles upon which he can stand when defending himself against those who would exercise power over him. In contrast, someone enthralled with power – by endorsing its exercise over others – kicks out from beneath his own feet the principles he will need to stand on when the time comes for him to defend himself against the power of those who would force him to submit to their will.

-- from "Liberty, Power, and Principles" by Don Boudreaux

Gold mania ahead?

“I think we’re still in the early stages of what could become a gold mania,” opines Chris Mayer. “While there are a lot more people talking about gold now and the gold price is close to all-time highs, it remains an underowned asset. Only a small fraction of investors own any gold at all. Hardly any institutions own any gold, either. As we now have 10 years of market-beating data for gold, it’s going to attract more attention.

“I think that attention will eventually carry it to a price of $2,000-3,000 pretty easily -- maybe more. So far, gold has had a steady march up since 2000. The last leg, the mania phase, always has a rapid and explosive move before it’s all over. We’re not there yet.

“As for what will pull gold back down, I think a strong economic recovery could derail gold’s story for a time, but as long as the U.S. dollar makes its way to new depths over time, I think the gold price will drift higher.

“Most people think of gold as an inflation hedge. To me, it is more than that. Gold is primarily a bet against the creditworthiness of the issuers of paper currencies. In other words, as the creditworthiness of the U.S. government weakens -- thanks to high debts and deficits -- gold will be a strong asset… and gold stocks ought to be one way to juice the return you get from gold. Our two gold stocks are up 80% and 40% since we bought them earlier this year. If we get any pullback in gold, I’ll be a buyer.”

--from "CIT Dies, Manufacturing Back to Life, The Recession’s Real End, When to Sell Gold and More!" by Addison Wiggin and Ian Mathias

Buffett takes a ride on the railroad

“The press seems to say,” a reader writes, “that Warren Buffett was making a statement on the recovery of the U.S. economy with the purchase of his favorite railroad. But I read a quote that he didn't know when the recovery would occur. What would a rational person with over 20 billion in U.S. cash do when the dollar is about to collapse? Buy railroads or other tangible stuff. And he thinks the cost of energy will go up radically. Sell trucking, buy rail.”

The 5: Good points. It’s also worth noting Buffett offered lots of BRK shares to complete the deal. In other words, he’s implicitly saying that the assets of the Burlington railroads have more value than the stocks in the Berkshire portfolio.

--from "Extend and Pretend, Understanding The Fed, Biometric IDs and More!" by Addison Wiggin and Ian Mathias