Dagny as she nears 1 year.
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From a dear friend and fellow memo reader: "How ironic is it on the day America celebrates the birthday of a civil rights leader we also have the second inauguration of a President who was elected twice because of the color of his skin, and not the content of his character?"
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Balancing ther budget and learning how to say no: "http://www.youtube.com/watch?v=hDwCTKXCFW4&NR=1"
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From a friend's cousin who lived in Israel and was a member of the Hagganah. He is now 80 and lives elsewhere. (See 1 below.)
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From my dear friend who is a caring man of the cloth. (See 2 below.)
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Obama comes with a cost. (See 3 below.)
Obama is on a mission which , in my opinion, will take the following course:
a) He will resist anything Republicans seek by way of fiscal sanity, blame them for everything that goes wrong in the hope he can defeat them in 2014 and gain control of the entire branches of government.
b) Achieving 'a' Obama will then proceed to increase entitlements and keep building dependent constituencies in such a radical fashion it will be impossible for any future president to bring fiscal sanity to government expenditures.
When Obama was first elected he warned us he was not be interested in 'fringe changes' but wanted to make major ones. He has been true to his word. By the time he finishes , if successful, I daresay he will have converted over 40% of the private sector and placed it under government control if not more.
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Tobin on what to expect between Netanyahu and Obama. (See 4 below.)
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Dick
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1)THE LAST SUMMARY ISRAEL - THE FUTURE
THE BEST NEWS SINCE 1967!
THE LAST SUMMARY ISRAEL - THE FUTURE a) Gas - Israel 's recent discovery of mega gas fields titled Tamar and Leviathan are located off the Israeli coast from Haifa . These massive discoveries will soon transform Israel as they will adequately look after Israel 's domestic needs forever and thereafter to supply foreign markets. A number of countries are pursuing involvement in these finds. Among them are Russia , China , Europe and South Korea Putin was in Israel two months ago pursuing a contractual relationship with Israel on its gas development projects. Nothing has been signed yet.
Tamar is due to come online sometime in 2013 and Leviathan to follow in early 2014.
Additional target areas are being explored all the way down the Mediterranean coast of Israel . \
The likelihood is that a pipeline from the gas discovery area will be built to Cyprus and on to Greece . This will help Greece with some of its financial troubles. It is expected there will be a plant built to liquify the gas at the Greek end of the underwater pipeline.
b) Oil - geologists have recently completed a large mapping of most of southern Israel and preliminary findings indicate there are vast amounts of oil trapped in rock layers under about 15% of the State of Israel. This shale oil is technically difficult to extract but Israel and the companies involved are becoming very familiar with the methodology to extract this oil called 'fracking'. Retired Canadian experts in this system are now resident in Israel working on this huge project.
The World Energy Council and Israel Energy Initiatives have completed a detailed study and presented it to the government on their estimates of Israel 's shale oil potential.
They estimate that Israel 's shale reserves could contain as much as 250 billion barrels of potentially recoverable oil.
This would be putting Israel on a par with Saudi Arabia in terms of its oil reserves!
Israeli planners believe that if the gas and oil finds reach the levels that the potential indicates, Israel's current group of allies, trading partners and opponents could drastically change. Israel 's geo-political standing in the world will also change. It's amazing what friends can be made when you have oil and gas to export!
MED-RED RAILWAY - China is in very serious negotiation (contracts have been exchanged) - the Chinese will build and finance most of a high speed railway from Eilat to Ashdod . This would allow tankers and freighters to avoid the Suez Canal as well as cut the time frame from canal usage in half, by using the railway. This is a huge development for Israel as it will open up the Negev , which was always the dream of David Ben Gurion. It would not be surprising that a major announcement on this development with all its details, should be expected by mid 2013.
CHINESE INVESTMENT IN ISRAEL
The Chinese Government, while they are negotiating the Med-Red Railway, have made it clear to Israel that they have a multi-billion dollar fund that they would put to use, to fund Israeli hi-tech start-ups and companies needing mezzanine financing. The Israeli Government is very amenable to this opportunity, and the Chinese have already agreed to the stringent conditions that Israel wants to apply on any of the investments. Look for an announcement on this in 2013.
You should be aware that the Israeli Government and various Agrarian companies are extremely busy today in China - assisting the Chinese with their need to get much more production out of their land, while following the Israeli system of water economy. Further, the Chinese are learning every possible method Israel has on how to maximize milk production, and other elements necessary for the Chinese to raise the level of feeding their huge population.
This relationship is being very well received by the Chinese and its government.
ALIYAH - Numerous European countries are seeing their Jewish populations diminishing because of a resurgence of anti-semitism and violence against their Jewish communities.
Islam is on the march in many of the European countries. In particular, sizable numbers of French, British and smaller numbers of Jews from other EU countries, have left or are in the process of going to Israel The Jewish Agency for Israel is planning for a significant aliyah to continue as well as increase over time with Jews leaving Ukraine and Russia .
Again the planning of the Jewish Agency indicates that Ben Gurions dream of large communities in the Negev is now nearer to realization than ever before. Hi-tech companies are being offered significant inducements by the government to establish their campuses and their R&D facilities in communities being formed in the Negev . Currently the hi-tech campuses are extremely crowded in an area south of Tel Aviv. Bear in mind that nothing is far in Israel .
EMP (Electromagnetic impulses)
The magnitude of this enormous devastating project is hard to fathom. Whoever develops this will have a commanding position facing any adversary. EMP could cripple a country by shutting down its electronics. It uses non-lethal gamma energy to react with the magnetic field and produces a powerful shock wave that can devastate any power grid and communications system. Try as I did, I could not get anyone to make any kind of comment regarding Israel 's involvement. All I got were small, relatively short smiles. CONCLUSION
The problems of Iran and the Palestinian State and a horrible neighbourhood need to be dealt with Israeli resolve. Assuming all of the things described previously like oil, gas, Chinese investment, Med-Red Railway, as well as things still to be developed, the future for Israel is extremely bright.
The IDF, the IAF, the MOSSAD, the SHIN-BET, the AMAN, are amongst the best of their kind in the world and will do their utmost to safeguard the State of Israel and the Jewish people wherever they are to be found.
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2)THE NUMBER OF MURDERS FOR CHICAGO IS NOW 500+ FOR THE YEAR 2012!!!!
Perhaps the U.S. should pull out of Chicago ? Body count: In the last six months 292 killed (murdered) in Chicago .
221 killed in Iraq AND CHICAGO has one of the strictest gun laws in the entire US .
President: Barack Obama , Senator: Dick Durbin ,former House Representative: Jesse Jackson Jr. , Governor: Pat Quinn ,House leader: Mike Madigan ,Atty. Gen.: Lisa Madigan (daughter of Mike) ,Mayor: Rahm Emanuel . The leadership in Illinois - all Democrats .
Thank you for the combat zone in Chicago . Of course, they're all blaming each other. Can't blame Republicans; there aren't any!
Chicago school system rated one of the worst in the country. Can't blame Republicans; there aren't any!
State pension fund $78 Billion in debt, worst in country . Can't blame Republicans; there aren't any!
Cook County ( Chicago ) sales tax 10.25% highest in country. Can't blame Republicans; there aren't any!
This is the political culture that Obama comes from in Illinois . And he is going to 'fix' Washington politics for us???
This is the political culture that Obama comes from in Illinois . And he is going to 'fix' Washington politics for us???
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3)The Wages of Obama's Sins
By Porter StansberryWe begin 2013 in awe of what's happened to our country…
Since 2008, when President Obama was elected, the official, net public debt of the U.S. federal government has increased by $5.5 trillion.
That's more than double the size of the total net public debt of the U.S. in 2007, the year before Obama was elected ($5.03 trillion). These additional new debts have swollen the total net debt of the federal government to more than $11 trillion, or roughly 80% of GDP.
These overwhelming public financial obligations are completely unprecedented in the history of our country, outside of the two major global wars we fought in the 20th century.
But even these incredible figures don't tell the real story. Or even half of it.
You see, these are merely the debts that we, federal taxpayers, are actively paying interest on right now. These don't include any of the additional $4.8 trillion in debts held by various government agencies (but which still cost us interest every year). Nor do they include any of Fannie Mae's or Freddie Mac's obligations, two private companies that were taken over by the federal government during 2008 and whose total obligations stand at a little more than $5 trillion.
We've paid nearly $200 billion in interest for these obligations, though they remain completely off the federal balance sheet. Nor do these numbers include any of the trillions of dollars in additional Federal Reserve assets that have been created out of thin air to manipulate the market rate of interest lower during this period of rapidly growing demand for federal debt.
When you add these other, genuine, federal obligations that exist right now, today, you come up with a total debt figure that's much more than $20 trillion. Far more than half of these debts were assumed under President Obama.
We don't know what the full burden of these new and existing debts will be in total, over time. That's because the Fed's power to manipulate interest rates is unlimited. We don't know how much of Fannie's and Freddie's bad debts will eventually be covered by the U.S. Treasury. (We do know they have an unlimited line of credit… so it's a safe bet that we haven't seen the last of these charges.) Finally, we have no idea what the eventual costs of the Federal Reserve's ongoing expansion of the monetary base will be over the long term.
There is one thing that's certain, however: These debts will not be free. They will carry a burden.
I call that burden the "wages of sin" because the effort to cover our country's current expenses with debts that will be borne by generations of Americans is simply evil. There's no other word for the people who have done this to our country. By refusing to take responsibility for their own policies and by refusing to make their constituents responsible for their own poor choices, they've doomed our country to a future that will certainly include a government that's far larger and more expensive.
That means a lower standard of living for all of us.
To give you some idea of the real, underlying costs we face, we can simply apply a real-world interest rate to the total debts we enumerated above. Let's pretend there's a lender large enough to finance our federal burden, someone who is able and willing to extend us credit larger than our entire economy. And let's pretend he's willing to do so for 30 years to make the payments affordable to us.
You can imagine this as a huge mortgage our leaders have put on top of our economy. How much would we have to eventually spend in interest to cover these debts in a legitimate way? When you buy a home, you're given the same information from your lender. It's part of the housing law that governs the mortgage industry – the Fair Lending Act. So using exactly the same guidelines, how much should we expect to spend on interest and principal, for these debts?
If the average real interest rate ends up being 4% annually, we'll spend $34.3 trillion to simply repay what we owe right now. If the rate ends up being 5%, we'll spend $38.6 trillion. If the rate ends up being 6%, we'll spend $43.1 trillion.
Now, of course, our politicians believe that through policy and currency manipulation, they can simply avoid paying any of these costs. They can order the Federal Reserve to prevent interest rates from ever rising to a level that would cost the American people anything. They believe they can manage the economy, so the debts of Fannie and Freddie won't go bad. They believe (without any proof whatsoever) that they can stimulate the economy by even more deficit spending, so that it grows faster, allowing tax revenues to produce a surplus. Repaying these debts, they say, will be easy and painless.
But you know better, my friend. You must know better. The wages of sin must be paid. And they will be paid. Just consider the plans of those who argue otherwise…
Paul Krugman, the publicity-hungry M.I.T. economist, pens a column for the New York Times that's ironically titled The Conscience of a Liberal. He recently suggested a simple and completely pain-free way around the debt ceiling, that flimsy piece of legislation that was supposed to slow the growth of the federal debt.
The problem of our debt is easy to solve, according to Krugman: Just mint a $1 trillion coin (or coins) and deposit it with the Treasury:
| There's a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector's items – but that's not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling – while doing no economic harm at all. |
Very few people, even our most influential economists, seem to remember that the utility of money and credit are based upon their soundness.
Money allows people to exchange goods and services widely, greatly increasing the specialization of labor and facilitating the economic magic of competitive advantage. Money also plays the critical function of facilitating communications between and among many disparate actors. Price changes guide producers and consumers.
But… when the money can't be trusted… this entire system breaks down. The price signals can't be relied upon. And it becomes harder and harder for people to exchange labor and capital.
Likewise, credit enables an economy to grow by facilitating the growth of savings and capital investment through real interest rates. But very few people are willing to delay consumption and trust their savings in an economy that refuses to pay savers any return above inflation for their savings.
Actions that undermine the legitimacy of our currency or that threaten the stability of our credit will cause enormous problems – real costs – to our economy. Pretending otherwise won't change these facts in the slightest. Minting coins with a real intrinsic value of maybe $3,000 and claiming they're worth $1 trillion is Mugabe finance. Just reading about the possibility of this plan in the pages of the New York Times will damage the stability of our money and credit.
But regardless of whether our creditors read the New York Times, they will soon realize there's no way we can finance, in real dollars, our existing federal debt of $20 trillion. Assuming the real rate of inflation (today) is 4%, we should expect to pay at least 6% annually to finance these debts. That would mean interest payments of more than $500 billion annually.
This is impossible. Ignoring payroll taxes (which finance Social Security and Medicare… at a loss), the federal government takes in roughly $2.4 trillion in income and corporate taxes. Social Security, Medicare, and federal pension spending currently total more than $1.8 trillion, leaving roughly $600 billion for all other forms of government spending (including the military). Even all of the remainder isn't likely to cover the real costs of our debt for long, given the inevitable (and huge) increases to Medicare and Social Security spending.
And so that leaves us, at the start of 2013, wondering how we will pay for the wages of Obama's sins… and the inevitable consequences of refusing to acknowledge these debts or the politics that led to them.
Regards,
Porter Stansberry
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4)Anticipating More Obama-Bibi
By Jonathan Tobin
The final polls before Israel's election were published Friday and the results will provide little comfort to Benjamin Netanyahu's many critics in the United States. All the surveys of opinion before tomorrow's vote point in one direction: Netanyahu will win. Even the most pessimistic estimates of his party's vote shows the Likud getting approximately twice as many seats in the next Knesset as the next largest competitor and the parties that make up Netanyahu's current coalition will gain a decisive majority. Netanyahu will be in charge of a comfortable majority that is, if anything, more right-wing than the government he led for the past four years.
That's a bitter pill for an Obama administration that believes, as the Atlantic's Jeffrey Goldberg reported earlier last week, that the president knows what is in Israel's "best interests" better than Netanyahu and which spent much of its time in office battling him. It makes sense to think the two leaders will continue to distrust each other and to quarrel over the peace process and how to deal with the Iranian nuclear threat.
The rightward tilt of the next Netanyahu government and what appears to be the aggressive and confident tone of the second Obama administration in which the president appears to be surrounding himself with people who agree with him rather than centrists or those who have different perspectives both seem to argue for more rather than less conflict between Washington and Jerusalem.
But the doom and gloom scenarios about four more years of this tandem may be exaggerated. There are three good reasons that may serve to keep tensions from boiling over.
The first factor that may keep the conflict in check is something that the controversial Goldberg column made clear: the president may have learned his lesson about the peace process. Though Goldberg and the president both wrongly assume that Arab "moderates" want peace and need to be encouraged with "conciliatory gestures," the writer notes that Obama understands that Palestinian Authority leader Mahmoud Abbas is weak. He also knows that every attempt by the administration to pressure Netanyahu and to tilt the diplomatic playing field in the Palestinians' direction on settlements, Jerusalem and border, was met with disinterest by the PA.
Nothing Obama could do or say, no matter how damaging to Israel's cause was enough to tempt Abbas back to the negotiating table. Indeed, the Palestinians' decision to go to the United Nations to get recognition was not so much aimed at Israel, as it was an end run around the Obama administration.
Though Goldberg frames the president's reluctance to repeat this cycle of misunderstand as a judgment on Netanyahu's lack of interest in peace it is actually an indictment of the Palestinians. Had Abbas responded positively to any of Obama's initiatives, he could have helped the president pin the prime minister down and perhaps even undermined his support at home. Netanyahu has already endorsed a two state solution and frozen settlements for a time to appease Obama and Abbas didn't respond to either gesture.
Abbas is interested right now in making peace with Hamas, not Israel. He has stayed away from talks not because he thinks he can't get a deal but because he fears being put in the same uncomfortable situation in which he found himself in 2008 when Ehud Olmert made the last Israeli offer of Palestinian independence including Jerusalem. Abbas knows he can't recognize the legitimacy of a Jewish state no matter where its borders are drawn and survive so he didn't so much turn down Olmert as to flee the talks. He won't allow himself to be that close to political extinction again.
Though, as Goldberg pointed out, incoming Secretary of State John Kerry may be eager to play the peace process game with the help of his European friends, President Obama may understand that heading down that dead end again is not worth any of his precious second term political capital. If the Palestinians go any further toward Fatah-Hamas unity and/or if a third intifada is launched that will effectively spike any hope for new negotiations no matter what Obama may personally want to do.
Obama may believe Israel is dooming itself to isolation but the majority of Israelis have paid closer attention to the last 20 years of attempts to make peace and know that further concessions would only worsen their security without bringing peace. Yet as much as he can't stand Netanyahu, picking another fight with him over an issue that can't be resolved due to Palestinian intransigence is bad politics as well as bad policy.
THE IRANIAN FACTOR
The second factor that might act as a brake on U.S.-Israel tension is Iran. There is more than a little irony in this. Disagreements between the United States and Israel over the timetable of Iranian nuclear progress, the futility of diplomacy and the ultimate necessity of an attack have divided the two governments for years. Many assume, not without reason, that the president's reluctance to get tough with Iran (a belief bolstered by his nomination of a new secretary of defense in Chuck Hagel that previously opposed both sanctions and the possibility of using force against Iran) will only make things worse in the future as Israel gears up for the possibility of having to forestall a nuclear Iran if the United States won't.
The second factor that might act as a brake on U.S.-Israel tension is Iran. There is more than a little irony in this. Disagreements between the United States and Israel over the timetable of Iranian nuclear progress, the futility of diplomacy and the ultimate necessity of an attack have divided the two governments for years. Many assume, not without reason, that the president's reluctance to get tough with Iran (a belief bolstered by his nomination of a new secretary of defense in Chuck Hagel that previously opposed both sanctions and the possibility of using force against Iran) will only make things worse in the future as Israel gears up for the possibility of having to forestall a nuclear Iran if the United States won't.
But as much as this issue appears to be the one which will do the most to escalate tension between Washington, there is also the very real possibility that Iran's refusal to negotiate seriously and its determination to push ahead toward its nuclear goal will leave the president little choice but to work with Israel to eliminate the threat.
Obama's decision to waste years of his first administration on pointless attempts at engagement with Tehran and then assembling an international coalition on behalf of watered down sanctions did little to instill confidence in U.S. resolve. The president was late to push sanctions against Iran and has left loopholes in these measures that have allowed the Islamist regime enough money to keep investing in nuclear development even as their people suffer. Should the United States go back down the garden path with Iran diplomacy in the coming months that will merely give the ayatollahs even more time to run out the clock until they reach their goal.
Indeed, the Iranians cannot be blamed if they interpret the Hagel appointment as evidence that Obama would like to go back on his promises about stopping them and not to try to contain them if they get their bomb.
But the storm over Hagel has also made it clear that the president may not have as much room to maneuver on Iran as many on the left hope he has. Though Hagel's likely confirmation has encouraged those who would like a softer line on Iran as well as the chorus of Israel-bashers (two groups whose membership generally overlaps), the process that led to the former senator doing a 180 on his views about Iran ought to make it clear that the president has painted himself into a corner on Iran.
Both Hagel and the president can go back on their promises but doing so will be a devastating blow to the president's credibility. As much as there is good reason to suspect that the president would like nothing better than to avoid a confrontation with Iran, he may also have come to understand that the prospect of an Iranian nuke on his watch constitutes a grave threat to U.S. interests and security that will be a permanent blot on his legacy. More to the point, the Iranians may close off any avenue of escape from this dilemma.
Since Iran refuses to negotiate in good faith even when the Europeans are prepared to offer them a deal that might let them keep their nuclear program, the assumption that a diplomatic solution is inevitable is one that is getting harder for even the most ardent opponents of the use of force to cling to. Having successfully forced Netanyahu to stand down from any possible Israeli attack up until now, it could be that, almost in spite of himself the president may wind up being forced to agree with the Israelis on the necessity of action sometime in the coming year.
Given its record on the issue, it may be a tremendous leap of faith to assume that the administration intends to keep his word on Iran. That's why a lot of people, including myself, have viewed Jeffrey Goldberg's belief in Obama's rhetoric on Iran as naive. But Obama has acted up until now on the assumption that sooner or later the Iranians would crack and get him off the hook. If they don't, and there is no reason to think they will, he may find himself at long last in agreement with Netanyahu that a strike is inevitable. Goldberg is probably right when he writes that if the president is drawn to that conclusion, his hard feelings about Netanyahu won't be enough to stop him from doing something he believes is important to solidifying his legacy.
Tension between Israel and the United States over a decision to pull the trigger on a strike on Iran may be inevitable. But the one factor that may unite the two countries is the adamant desire of the Iranian regime to get a nuke. If they aren't careful they may do the impossible and bridge the gap between Obama and Netanyahu and forge an unlikely alliance between them.
THE U.S.-ISRAEL ALLIANCE REMAINS A CONSENSUS ISSUE IN THIS COUNTRY
Even if we don't assume, as I think we should, that Israel's enemies will continue to force the United States and Israel into the same corner whether the president likes it or not, there is another important factor that will also put a limit on how far any quarrel can go: the overwhelming support for Israel among the American people. As much as some in the administration and its cheerleaders on the left may believe that the "Jewish lobby," as President Obama's nominee for secretary of defense put it, has too much influence, the fact remains that the U.S.-Israel alliance remains a consensus issue in this country. As we have seen over the past two years, no president, not even one as personally popular as Barack Obama, can afford to ignore it or blow it up.
Even if we don't assume, as I think we should, that Israel's enemies will continue to force the United States and Israel into the same corner whether the president likes it or not, there is another important factor that will also put a limit on how far any quarrel can go: the overwhelming support for Israel among the American people. As much as some in the administration and its cheerleaders on the left may believe that the "Jewish lobby," as President Obama's nominee for secretary of defense put it, has too much influence, the fact remains that the U.S.-Israel alliance remains a consensus issue in this country. As we have seen over the past two years, no president, not even one as personally popular as Barack Obama, can afford to ignore it or blow it up.
It may be that a re-elected President Obama is still spoiling to get even with Netanyahu after his humiliation in May 2011 when the Israeli demonstrated the consequences of a picking a fight with a popular ally. At that time, Obama ambushed a visiting Netanyahu with a speech demanding the Israeli accept the 1967 lines as a starting point in future peace negotiations. Netanyahu didn't just reject the U.S. diktat, but the ovation that he received when he addressed Congress a few days later showed that both Democrats and Republicans were united in backing Israel's position.
That was the last major fight picked with Israel by Obama over the peace process since in the following months he launched a Jewish charm offensive with an eye on the 2012 presidential election. As I noted earlier, a major factor behind a decision not to try again may be the refusal of the Palestinians to take advantage of the president's opening. But the president also understood that a posture of hostility toward Israel was political poison and not just with American Jews whose votes he assumed would remain in the Democratic column. The problem with the Walt-Mearsheimer Israel Lobby thesis is not just that it is rooted in an anti-Semitic mindset that sees the Jews as manipulating the United States to do things that are against its interests. Rather, the real problem with it is that it fails to take into account the fact that the pro-Israel consensus cuts across virtually all demographic and political lines in this country.
As I wrote in the July 2011 issue of COMMENTARY in the aftermath of the worst Obama-Netanyahu confrontation, the alliance between the two countries is not only politically popular but is now so integrated into the infrastructure of U.S. defense and foreign policy as to be virtually indestructible. If a president who is as ambivalent about Israel and as determined to create daylight between the two countries as Obama has proved to be understood that he could not afford to downgrade that alliance, that point has been proven.
It is true that as a result of his re-election, the president does not have to fear the voters' wrath on this or any issue. But the idea that he has carte blanche to do as he likes to Israel is a myth. The bipartisan pro-Israel consensus in Congress will always act as a check on any impulse to take revenge on Netanyahu. The process by which defense secretary nominee Chuck Hagel has been forced to reverse all of his previous stands on Iran and Israel and to disavow his "Jewish lobby" comments is reminder that a second Obama administration cannot undo the laws of political gravity. Most Americans will regard Netanyahu's re-election next week as an argument against any U.S. pressure to force Israel to do what its voters have rejected.
To say all that is not to discount the very real possibility that tension between the two governments is probably a given to some degree as long as these two men are in power. But a president with a limited amount of political capital and only two years in which he can use it would be a fool to expend his scarce resources on another losing fight with Netanyahu.
Four more years of this oddly mismatched tandem will make for a rocky ride for friends of Israel. But the alliance is stronger than even Barack Obama's dislike for Netanyahu. As nasty as this relationship may be, the fallout in Washington from the Israeli's easy re-election may not be as bad as you might think.
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