Fast and Furious Progress and Booming Growth

A Sunni group has taken credit for the bombing of a Mosque in Iran and the government of Iraq, at the request of Iran, has banned all dealings with "MEK" a Sunni terrorist group that was used by Saddam to attack Iranian targets. The MEK is not happy about being "cut off" by the Iraqi government and they have appealed to the UN Security Council for relief; they should not hold their breath. Terrorist who were once routinely supported by governments from Libya to Yemen are being shunned. This great news is not being widely reported but it is great news. An important part of this story is that objections to the deal to permit peace keeping troops in Iraq are being removed one after another. Once this deal is in place, one of the big piece remaining pieces to this puzzle will be the pending deal with Iran.

Over in Lebanon, Condi Rice just met with President Suleiman. The US cut a back door deal just a few weeks ago that allowed his ascendancy to the Presidency despite the political power granted to Hizbollah in the process. It is OK for Hizbollah to have political power but not OK for them to commit acts of terror. The support of the US and Syria for an agreement between Lebanon and Israel is certainly an important piece of this peace puzzle. Olmert and Suleiman are ready for direct talks. This means the deal is basically done. The hang up over the farms of Shaba, which Israel has agreed to return are claimed by both Syria and Lebanon. The French were instrumental in mediating an agreement between Syria and Israel. The implication has been made that the UN will recommend some kind of a split or other settlement offer between Syria and Lebanon.


On the other side of Israel, a cease fire between Israel and Hamas has been mediated by Egypt. Every nation in the region is involved in the peace negotiations in one way or another and politicians in every nation are prepared to take their proper share of the credit. Of course, cease fire agreements are frequently broken but the bigger deal is the negotiations with Lebanon, Syria, Afghanistan, Pakistan and Iran. The direct talks between Lebanon and Syria should pave the way for direct talks between Syria and Israel.

Booming Growth

The current boom is in resource rich countries such as Russia. Russia is currently in the midst of a real estate bubble. Prices in Moscow have jumped at the annual rate of 40% and laws concerning the private ownership of real estate are having to be adjusted to protect those who have been paying "socialist rental rates" (sounds like New York city doesn't it).

The boom in the US continues to be confined to certain areas. Examples include US export growth of 19.2%, business construction up 15.4% and core consumer spending up at the annual rate of 10.2% over the last 3 months. Earlier I mentioned the boom in high tech equipment and the boom is sales of super computers. There is another hot, hot, hot sector of the US economy.

Incredible Spending on Research and Development

There are so many hot research projects to be mind boggling. Some are huge and others are relatively small with huge potential. An example of a small project is the work being done on "Black Light Power". A start up has acquired $60 million in funding to develop this source of energy. This is one of those too good to be true stories in which some very smart people have great enthusiasm and faith. If the concept works out, the cost of generating power will be reduced by 70 to 90% in a few years. For umpteen years, we have been teased by the promise of hydrogen power. These guys think they have figured out a few things that Eisenstein might have learned if he had worked 40 more years or so. Their program converts hydrogen and a solid fuel catalyst into hydrio while releasing heat and energy and while breaking down water into its components of hydrogen and oxygen. The hydrogen from the water can be feed back into the loop to keep the process going. This is not one of those impossible perpetual motion machines. This is a bit like finding the way to increase the efficiency of nuclear fuel from 5% to 10% (other scientist are coming close to accomplishing this feat).

Folks, it is time to be optimistic. Our energy problems are going to be solved one way or another. Today, Charlie Crist, governor of Florida, came out in favor of drilling off the Florida coasts. With Cuba granting China and many others the licenses to drill within 60 miles of Florida, it would be silly to allow Cuba to "drink our milkshake". The law of oil, which developed around the "western law of capture", is that the man who has the longest straw gets to drink all he wants (provided he does not drill sideways into the other mans territory). It is absolutely silly for the US to buy foreign oil while not allowing US reserves to be tapped. It is great that politicians are seeing the need.

The momentum for drilling in America has turned. Since a couple of weeks ago, when the Senate pounded to the death an attempt to impose cap and trade taxes on oil, coal and gas, there has been a growing sense that the environmental gestapo has finally met its match, $4 gasoline. Senators are scrambling to make it look like they are doing something. If nothing else, they are trying to squeeze a little more pork out of the situation. Eleven Senators have asked the Bush administration to file trade complaints against 8 OPEC countries. Yeah, they want to sue OPEC for price collusion; good luck with that. All the while, Brownback, a republican from Kansas, has submitted a bill to mandate that half the cars in America built in 2012 be flex fuel equipped. When are politicians going to learn that we do not want corn alcohol rusting our cars from the inside out?

In another interesting development, the Senate just blocked a 17.7 billion dollar boondoggle to give consumers money to build private windmills and roof top solar panels. Can you imagine the joy on the faces of ranchers and farmers 80 or more years ago when they received access to electricity? Do you suppose they regretted depending on wind mills to pump water? It made no sense to keep on using windmills back then and it makes no sense now. They appeal to our sense of getting something for nothing but there is no free lunch. Of course, GE, a major seller of wind turbines just put out a study saying that governments tax revenues will fully repay windmill subsides. In case you didn't know, the government cannot operate on an eventual break even basis. The way the government works is the taxpayers put in a dollar and hope to get back 80 cents worth of services. When windmills are subsidized, for the government to pay out a dollar, it has to take in at least a dollar twenty from somewhere else. Who should be forced to waste the extra 20 cents? The democrat response is to take twenty cents from the investments of the rich. They do not appreciate that they take the money most productively deployed. The government had better be thankful for the oil business. The government makes more money off the oil business than does the oil companies. The problem with government has always been how to generate the governments slice of the pie.

450 for 1

Israel is prepared to release 450 prisoners in exchange for the 1 kidnapped Israeli soldier. It sounds like a good trade to me. One honorable soldier is worth at least 450 terrorist.

Is it not unreal that the mind set of Islam is that it is better to die by homicide--suicide bomb than to spend time in jail? The Taliban just took extreme measures to do a prison break out in Afghanistan. The good news about this kind of break out is that the rats can be followed back to the nest. Since the breakout at least three-dozen Taliban have been killed. When the negotiations with Iraq allow us to keep only 50,000 or so troops in Iraq, it will be time to send the other 90,000 to Afghanistan to finish the job there. We do not celebrate the deaths of the terrorist but the lives saved by the death of the terrorist!

From the Iranian Point of View

The Iranian View starts with their correct statement that refining ore to LEU power grade is different than refining it to HEU weapons grade. Of course, the fact that they have been working on missiles designed to carry nuclear bombs and the fact that they have in the past tried to acquire weapons grade technology all makes the current program the precursor to a weapons program. Iran points out that Brazil and other nations that are quietly working on nuclear power are not under sanctions. The new 123 agreements require all nations to acquire their nuclear fuel from IAEA supervised centers. I have not heard the government of Brazil propose that Israel or the USA be wiped off the map or that they have paid people to blow themselves up in the middle of crowded markets.

Other Iranian arguments look back a very long time. Going back just 60 years or so, British Petroleum (BP), is seen as the devil. For Iran, BP is like Exxon to the lefties of the USA. It is seen as a greedy profit machine that does not share fairly with oil owners. In case after case, when countries nationalize oil fields, they learn that the oil companies produced profitable results for all parties. BP and Exxon are like the Tiger Woods of golf, he sure makes the game look easy. He can play better than the rest of us even when he has one broken leg bone and another torn-up knee. Nations like Iran and Venezuela would give Tiger's golf clubs the credit for his success and confiscate them from him.

The support given to various Iranian regimes by the British and the USA over the years is seen as the manipulation of a sovereign nation for the purpose of stealing Iran's oil wealth. Based on history from many more years back, Iran believes it should own the land all the way through Spain. We cannot correct the mistakes of history but we can move forward in peace.

Iran sees itself as a progressive country in areas where outsiders view it as reactionary. Iran believes it treats women well. Seventy percent of university graduates are women and a large number of Iranian women hold professional jobs, doctors, lawyers and professors. Some are members of parliament. The strictly enforced "special rules for women", such as the rules about dress, are considered laws of protection. A small percentage of Iranians are Christian, Jew or Sunni. The leadership "demonstrates tolerance" by showing minorities respect.

Iranians see Iran as a modern country. Major cities are filled with skyscrapers, there are modern roads and foreign cars of all makes and sizes. There are even car races. Before the recent troubles, the people lived relatively well. The average GDP per person was about $12,000 compared to about $50,000 in the USA.

The country is also a place of beautiful architecture, culture and antiquities. The age of enlightenment in Persia long preceded the European Renaissance. Sitting at an important crossroads and owning great natural resources, the country is ambitious. Since the 20th century was not kind to the country and the 21st century has been worse, the people are looking forward to the good times.

The Intrade Betting Site has Obama as a 65% probability to win the Presidency. The Iranians have their fingers crossed. They know if they hang on until Obama is president, he has pledged to pull troops out of Iraq (he has backtracked on this pledge but Obama would likely go along with the desires of the expected democratic congress). The absence of US forces would significantly boost the influence and power of Iran. However, drilling for oil is going to be a central issue in the upcoming elections and it could dramatically change the outcome. Some polls show that 70% of Americans believe it is time to drill in the USA. McCain continues to show his zebra strips. He announced today a proposal to spend billions of government dollars developing clean coal. Still, it is the democrats who are out of step in regard to energy. The market fears the tax increases promised by Obama. A lot of things will change if Bush is able to successfully conclude the mission he began in October of 2001.