Steve Mumford has a new column up. Just had a chance to skim it. Looks good. Good text, good art. (Thanks to Mark at Kaedrin for the heads up.)
Is “War on Terror” the Wrong Way to Frame the Issue?
Val Dorta has a long and thoughtful post about conceptual flaws in our “war on terror.” I agree that we aren’t dealing openly with the problems posed by Pakistan and Saudi Arabia. However, unlike Val I think that our behavior in this regard is probably more a function of our trying to finesse these situations, and if possible avoid war, than of any unwillingness on our part to face the truth. But I may be wrong, and Val makes the contrary case well.
Bush, the Dollar and Inflation
Don Luskin is worried about the dollar, or more precisely, about how the Bush administration appears to be systematically — and irresponsibly — devaluing the dollar to buy the votes of exporters and union members. I was worried a few months ago. Is Don right? Was I right?
Well, gold was cheaper when I first became concerned. Now it’s trading at around $380/oz. Also, the dollar regained some of its lost value after I made that post in June. But now the dollar has fallen sharply from its recent highs, and its downward momentum (relative to the Euro, and especially the Yen) has accelerated since the recent G7 finance ministers’ meeting. Time will tell, but it seems likely that Don is right and that there has been a policy shift. I wouldn’t be surprised to see the dollar make a new low vs. the Euro and to continue weakening against the Yen.
OPEC Supply Cut
This article is one of many which were out today. One theme was that it seemed odd that OPEC would cut production now, with quotes like this: “I am surprised that OPEC would reduce their output at a time when stocks are still substantially below historical norms and we are entering the high demand winter season in the northern hemisphere”, and this: “It surprises me that they were prepared to cut at these prices,” said Nigel Saperia of Swiss trading house Glencore. “I wouldn’t want to play poker with these guys.” Interesting. If a decision does not seem to make economic sense, you have to ask: does it make political sense?
Absolutely, yes. If I were the Saudis and the Iranians and Hugo Chavez and others in OPEC, I think it would be worth it to suffer some economic loss in the short term if I could bring on a recession which would finish off Bush’s chances of reelection. The Saudis in particular know that they are in the cross-hairs. Get rid of Bush, and you have a new lease on life.
OK. Yeah. This is pure speculation on my part, but it makes sense.