Monday, March 03, 2008


The USA has been demonstrating good intelligence lately. Every few weeks, an al-Qaeda leader is being torched. The bad guys are not even seeing the damage coming their way. One was taken out by a car bomb but the others are being hit from the sky. A couple of days ago, the hit was from a Predator drone, launched in cooperation with the Pakistani government and fired in the hills of Pakistan. The report this morning was of a strike in Somalia. The nationalities of those biting the dust has included a Saudi Arabian and an Egyptian.

In Iraq, the US lost the least number of soldiers in the month of January, 29. A significant loss but at about the rate of death per 1,000 in America. The death in America from guns is more than 2,500 per month and the death from auto accidents is over 3,500 per month. Should more tears be shed for the soldiers who die trying to rid the world of terrorist or for the drunk teenager and his victims in a head-on collision?

Civilian deaths in Iraq were up 36% last month. Even though the war is "going well". Hundreds of innocent people are being blown up by terrorist in various parts of the world. Several of the leaders and hundreds of their followers died last month.

In some cases, critics attack both the war and the USA. I can't remember where I read that a professor asked his students for a 6 word US slogan. The winner was "Our Worst Critics Prefer to Stay".


The price of gold and oil remains caught in the grips of geopolitical risk, putting downward pressure on the price of stocks. The long awaited "event" in Iran is almost upon us. The "bad news" of Iran is not likely to take the market much lower. Turns are showing up. Have you noticed that the housing stock index has bounced 20% off the bottom? Have you noticed that there is a new buyout every day or so? This morning it was Diebold under the gun of UTX. How about the continuation of insider buying? Insiders have bought a ton and a half of stocks at each of the market dips for the past 6 months. Mark Dodson of Hayes Advisors reports that the ISEE Sentiment has reached an all time record buy call. Iran is about to go under water for the third time. This latest set of sanctions do not appear to be so tough but, with unemployment above 20%, there is unrest in the body politic. The third time should be the charm.

NC State is starting an advanced transportation center where initial efforts will be focused on the most efficient hybrid vehicle. Down the road a few miles, Duke University is installing 2,500 wireless routers which will blanket the 6 million square feet campus with high speed Internet service. The revolution in digital downloads continues around the country. Apple has moved up to the number 2 spot, behind Wal-Mart and just ahead of Best Buy and Amazon. Over in Afghanistan, the Taliban is trying to get the cell towers turned off at night. They are tired of having their stealthily moves tracked by cell phone connection pings. Advances in the area of nano-technology also continue at a hurried pace. The discovery of tubes that reflect 100 times less than the black ink on this page holds the promise of a number of commercial possibilities. Another of the fascinating technology races is in regard to hydrocarbon eating bacteria. Demonstration plants are being built that use competing techniques to "chew-up" every thing from old tires and trash to coal or oil tars. Several researchers believe their technology will produce clean burning fuels for less than $1 per equivalent wholesale gallon of gasoline, while reducing pollution. If correct, the current price of gasoline is about double what it will be in a few years. Of course, the risk of investing in these technologies is that as the latest elephant oil fields come on line, the price of gasoline could drop below $1.50 per gallon.

All of these competing forces must stay ahead of the progress being made in the area of solar power. A massive solar power plant is scheduled to go on line by 2011 in Arizona. This one focuses the sunlight onto water tubes and the hot water drives turbines, nothing real fancy, but it works!


Even this old "skeptical republican" enjoyed the "Four Block World" post last week. It shows that drivers who want to go forward should use the letter D and those who want to go backward should use the letter R and that voters who want to go forward should use the letter R while those who want to go backwards should use the letter D.

Most of the rest of the world, is moving forward. The miracle in Hong Kong, as illustrated on the Carpe Diem site, is a good example. The per capita income has increased from $2,000 to $30,000 since WWII. Sixty percent of the citizens pay zero income tax. The top 8% pay 57% of all the tax. How does one convince the richest of the land to pay such a disproportionate share of the taxes? The country has lowered both individual and corporate tax rates. The city-states low tax policies have created an economic boom that has lasted for many years. The story is not over, rates are being cut again. The corporate is about to be lowered to 16.5%, just 1.5% higher than the 15% flat rate on individuals. In addition, there is no extra tax imposed on dividends, interest or capital gains.

Oh, you say Hong Kong is a special situation? I guess Russia is as well. Since cutting income rates to a flat 13.5% rate in 2001, the economy has boomed. What about Iceland, Ireland, and 20 other nations? Are all of these economic success stories "special situations"? The reality is that the risk of higher taxes in America is hurting our economy. Why would an international company consider building a solar panel factory in America if its production is going to be sold around the world? Why pay higher taxes here when the plant can be built elsewhere?


A review of Obama's policies reveals that he supports legislation that would dictate that America spend trillions of dollars "helping the poor of the world" and at the same time he is opposed to US free trade agreements. This is the international equivalent of the old welfare scheme where people were kept in poverty by the "helping hand" that was seeking votes not solutions. In the past 20 years, billions of people have seen a dramatic rise in their real incomes as a result of "free" trade. Those who have benefited live all around the globe, including the many "Wal-Mart Shoppers" in the USA. It is a hard lesson to learn but feeding a man a fish each day is not being kind to the man. Teach a man to fish and buy a portion of his daily catch is "right" strategy.

On the other hand, if the man is willing to strap explosive charges onto his friends, spouse or children in order to blow up his "enemies" then it is appropriate to fire him up with a Hel-cat missile. It is good to know that 140 plus terrorist leaders have been blown away "from a distance"!