Wednesday, January 11, 2006


Bushco: turning US financial supremacy into history

Beyond the deficits, the wars that do not serve the national interest, and the corruption, anyone-- conservative, centrist, or liberal, should agree that this is not a good omen for US financial supremacy: On a personal note, I recently had an unnerving experience as a foreign [British-based] investor in the US. Several years ago I bought US Silver Eagles from a well known and reputable precious metals dealer. They were stored with a depository service. In December I decided to sell them (this was only part of my silver holding - I am still very bullish) The broker I bought them from refused to buy them back! The provisions of the Patriot Act apparently made them liable if I turned out to be a terrorist. He eventually found me an outfit who agreed to take the “risk” of buying them back (reducing the price to me accordingly). Will I be cautious about investing in the US again? You bet. The right wing is focused on winning military battles. But Al Qaida is a lot too smart to engage in war against the US. What they do know is that fear and overreaction grind down the efficiency of an economy. On September 11, 2001, Al Qaida destroyed roughly $30B in human and capital assets. But our economy is so huge that it produces more money than that in one day! Three thousand deaths were replaced by 3000 births/naturalizations in one day! We are such a great nation that even that terrible attack, which devastated so many families, produced just a scratch on America. But Al Qaida, which could do no more than scratch us also knew this: lower the US GDP growth rate by just 0.25%, and you have bled almost three times as much from the economy as we have committed to reconstructing Iraq. Worse, it's a wound that is difficult to staunch, compounding every year. Idiotic restrictions that Bushco has imposed, from flight lists that ban 4 year olds to meddling with physical ownership of silver have seriously damaged US financial credibility. Their constant cries of "terror, terror, terror" have gone beyond being simple bulls--t to being a clear and present danger to this nation.
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