Our Trip to Israel: A Letter to my Sons (Part 1)

July 23, 2009

My Dear Sons,

Now that some time has passed since our return to Atlanta from our wonderful trip to Israel, I want to share with you my impressions of our visit, and my thoughts as to what we accomplished in terms of our understanding of what it means to be a Jew in the modern world.

Let me first confess that while our itinerary seemed to develop in a more or less unhurried and unplanned fashion, in fact the main theme of the trip was thought through in advance. My unstated goal—hopefully it wasn’t too obvious—was to introduce you to individuals and experiences that would leave indelible and positive impressions of the dynamic and diverse people who lead a Torah-observant life. Hopefully you came away from the trip with an appreciation of the many and various ways in which a Jew can live a G-d-centered life of Torah without “sacrificing” his or her individual personality.

Rather than review in detail each day’s activities in journal fashion, I prefer to recount events and experiences that I think were meaningful and which I hope enhanced your appreciation of Yiddishkeit (Jewishness) and the importance of the performance of mitzvos.

The Schroeder-Fruchtman Wedding. It isn’t every day that two families from the same shul in Atlanta make a chossona (wedding) for their children living in Israel. We were fortunate enough to attend and celebrate the “wedding of the century” in a suburb of Jerusalem, in which Aaron Fruchtman and Shoshana Schroeder exchanged vows. Shoshana’s parents, Harold and Lora Schroeder, and Aaron’s Mom, Lora Fruchtman, are active and valued long-time members of Congregation Ariel as well as good friends of our family.

There is nothing that touches the heart and soul of a Jew quite like a Jewish wedding. No one who is not closed-minded or cold-hearted could fail to be moved by the the insistent heart-catching strains of the violin as the bride and groom make their way to the chuppah, the sight of the Kallah (bride) circling the Chosson (groom) seven times under the chuppah, and the sound of shattered glass signifying the completion of the vows. This particular event was held under a cool, dry Jerusalem summer sky, with a lovely breeze carrying in the sweet smell of bougainvillea.

Due to the Israeli flavor of events, the reception was casual and relaxed. I seem to recall that either voluntarily or under duress you found yourself on the dance floor, participating in spirited rounds of male-only dancing, clapping and shvitzing. What’s not to like!

Aish HaTorah. We spent a morning visiting Aish HaTorah’s headquarters in the Old City overlooking the Kotel (Western Wall). My friend Gavriel Kleinerman, a senior staff member of Aish, met us and took us on a tour of the facilities. One of the highlights was sitting in on a few minutes of an “Essentials” class led by the “surfer Rabbi,” R’ Yom Tov Glazer. I am sure you will agree that the instant he begins speaking Rabbi Glazer commands your attention and grabs your soul. His topic that morning was “resonance,” and his words surely resonated with me.

Aish is perhaps the world’s most successful Jewish outreach organization (with apologies to Chabad). It was founded by Rabbi Noach Weinberg 35 years ago and is responsible for bringing thousands of Jews back to Judaism. Rabbi Weinberg passed away recently but his vision lives on in all his many students, staff members and followers.

Reb Gavriel showed us the very impressive 6-story building adjacent to the Kotel plaza which (hopefully) is nearing completion. This building will house Aish’s Essentials program, Discovery program, executive learning facilities, a museum, and a library and banquet space. We took some wonderful pictures on the balconies of the building with awesome views of the Kotel, the Dome of the Rock and Mt. of Olives beyond.

Perhaps the most memorable part of the visit was the number of enthusiastic and welcoming boys and young men that we met in the Aish Yeshiva Beis Midrash. For anyone who thinks that learning Torah and good times don’t go hand in hand, a visit to Aish’s Yeshiva will quickly dispel that perception.

Mr. Kleinerman represents the face of modern Torah Judaism. He is learned in the ways of the Torah and lives according to its laws. At the same time he is a mensch, fully engaged in the “real” world and involved with Jews of all backgrounds. I hope you enjoyed spending time with him as much as I did.

The Sheva Brachas. The Schroeder-Fruchtman wedding, like all traditional Jewish weddings, was followed by seven days of celebrations, hence the name “Sheva Brachas” (Seven Blessings). We attended the first of the Sheva Brachas, held at Bracha and Avi Oberstein’s in Ramat Eshkol. In addition to music, dancing and good food, these meals give the participants a chance to “bless” the bride and groom, usually by saying a few words of Torah or doing some “shtick.” (Like the “name that tune” game that Bracha dreamed up). The whole idea is to treat the “Chosson” and “Kallah” like royalty for the week following the wedding, thus easing their entry into the “real” world once the week is done.

Hopefully you felt the love and warmth that was directed towards the bride and groom, and would agree that it’s not a bad way to get a marriage off on the right foot.

Jewish community's denial about Obama must stop

By Anne Bayefsky

http://www.jewishworldreview.com/0709/bayefsky072009.php3

President Barack Obama last Monday met for the first time with leaders of selected Jewish organizations and leaks from the meeting now make one thing very clear. The only free country in the Middle East no longer has a friend in the leader of the free world. Obama is the most hostile sitting American president in the history of the state of Israel.

This was the very first meeting with Jewish community's leaders. Earlier requests for an audience with major Jewish organizations had reportedly been ignored. Six months after taking office the president finally got around to issuing an invitation to stop the bleeding. Increasing numbers of Jews even among the overwhelming number who voted for Obama have been voicing serious concern about his real agenda.

The meeting, however, did not showcase the president's trademark engagement and dialogue routine. Instead, he decided to cherry pick his Jewish audience to include pro-Obama newcomers with little support in the mainstream Jewish world, such as J Street, while blackballing the Zionist Organization of America. The oldest pro-Israel group in the United States, with a Washington office second in size only to the American Israel Public Affairs Committee (AIPAC), was not a voice Obama wanted to hear. This leaves the president willing to engage Iranian President Mahmoud Ahmadinejad but not ZOA President Mort Klein.

The growing alarm in the Jewish community was also something the White House was bent on covering up. They refused to put the meeting on the President's public schedule until it was outed. The White House demanded strict confidentiality and issued a terse couple of lines that it occurred when it was all over.

WAKE UP! But there is no papering over the distressing reality that emerged. The president told his listeners that he preferred putting daylight between the United States and Israel. His reported justification: "there was no light between the US and Israeli positions for the last eight years, and no progress was made."

Evidently, unilateral disengagement from the Gaza Strip, 21 settlements and 9,000 residents counts for nothing. The Palestinian terrorist leadership and street have refused to accept a Jewish state for the past eight years (and the previous 53) because the United States did not add sufficiently to Israel's isolation.

The president apparently believes that the Palestinians are more likely to end terrorism, incitement to violence and rampant antisemitism if the United States applies more pressure on their victims. Even if Obama doesn't get it, Mahmoud Abbas does. He is now refusing to negotiate anything with the new Israeli government until Obama's settlement conditions are met.

During the meeting, the president repeatedly described his new policy in terms of one of Yasser Arafat's favorite mantras, "even-handedness." That's diplotalk for a moral equivalence between an Arab war against Jewish self-determination launched from the day of Israel's birth decades before any "occupation" and the conditions of third-generation Palestinian "refugees" kept in limbo pending Israel's destruction. But Obama's even-handedness was no slip of the tongue. In his Cairo speech, the president equated the Holocaust to Palestinian "dislocation."

The president promoted his strategy of putting hard public "pressure" on Israel as a means to build more credibility with Arab states. He must have meant the kind of credibility that comes from his policy of leaving an "open door" to Iran after its discredited election.

A DEM PRESIDENT BLAMING THE MEDIA? Obama then claimed that the widespread perception of an anti-Israel agenda was all the media's fault because the media is only interested in a "man-bites-dog" story. When an administration sends a US ambassador back to Syria though it is still listed as a key state sponsor of terrorism, hosts terrorist kingpins pursuing Israel's annihilation, and was caught trying to acquire weapons of mass destruction, the story is far-fetched alright, but true.

The president joked that Al-Jazeera often airs pictures of him wearing a yarmulke at the Western Wall. Except the photo-op during the election campaign had been intended to fool a Jewish audience that is no longer amused.

Reports also quote the president as claiming Israel has yet to "engage in serious self-reflection." Considering Israel is a democratic country forced to send its children into the armed forces for two to three years and its men into reserve duty for another twenty-five, that isn't the audacity of hope. It's just plain audacity.

There is no doubt that the pressure on Israel from the Obama administration is going to get a lot worse, as the President told the group "there is a narrow window of opportunity for advancing the peace process." Everyone understood the threat. The narrow window is Obama's self-defined political ambitions bearing no relationship to the realities of the Middle East or the welfare of either Israel or the United States.

Anne Bayefsky is a senior fellow of the Hudson Institute, director of the Touro Institute on Human Rights and the Holocaust and editor of www.EYEontheUN.org.

Oy, Canada: What Obamacare Will Look Like

Ok, last post--today-- about healthcare. I promise.

Steven Crowder of PJTV has created a 3-minute video introduction of his much longer video expose on the Canadian national health system. Using a super-sophisticated secret taping system, Crowder takes the viewer behind the scenes of the beleagured and inefficient Canadian health system. Together with some pretty weird friends from his native Montreal, Crowder tries to get some medical attention for a minor injury from a public clinic. It is funny, but it isn't pretty.

If you have the time and patience for the full 20-minute version of the investigative video, by all means view it here.

The Lie at the Heart of Obamacare

President Obama and congressional Democrats have been claiming with straight faces that their health care "reform" plan would merely add a public insurance option to the existing array of private health insurance programs merely to introduce more "competition" into the system. (Get it? The only problem with health insurance is that it lacks enough insurance providers to promote competition, which is why the government will add one more). These officials have laughed off critics of the legislation who have been warning that the public option is designed to kill off private insurance and pave the way for a single-payer system.

With the release on Tuesday of the House Democrats' actual legislation (over 1000 pages) to radicalize the U.S. health industry, critics seem to have discovered that not only were they correct about the crowding out of the private sector, but that it will happen sooner than anyone imagined. The bill states expressly that effective on the first day of the year following the bill's passage (i.e., January 1st, 2010), individual health insurance issuers may not offer coverage to any individual unless the insurer belongs to a newly-established "Health Care Exchange." And the Health Care Exchange is nothing but a body of new regulations and restrictions on insurers that obviously will result in vastly higher costs which must be passed on to consumers via higher premiums.

According to Wednesday's Investors Business Daily editorial:

From the beginning, opponents of the public option plan have warned that if the government gets into the business of offering subsidized health insurance coverage, the private insurance market will wither. Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington's coverage.

The nonpartisan Lewin Group estimated in April that 120 million or more Americans could lose their group coverage at work and end up in such a program. That would leave private carriers with 50 million or fewer customers. This could cause the market to, as Lewin Vice President John Sheils put it, "fizzle out altogether."

What wasn't known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law.

SO Congress's plan for reducing the cost of health care (as if that was their intent) is to increase the cost of health premiums for those of us who want to buy it from a private insurer. Since the public option plan will not be forced by competitive pressure to raise its premiums, millions will flock to it, eventually drying up the market for private plans.

As the IDB editorial said: "The public option won't be an option for many, but rather a mandate for buying government care. A free people should be outraged at this advance of soft tyranny."

The question is, once everyone is forced into the public option (everyone except union workers and the corrupt bastards in Congress), what will prevent the government from jacking up the premiums on everyone once they figure out that like Social Security and Medicare, the costs of nationalized health care are unmanageable?

Nothing. When that happens we will have lousy health care without even the satisfaction of paying less for it. Maybe if its lousy enough even Mexicans won't want to live here anymore.

Obama to New Yorkers: Pay Up

Read the story here.

I guess its only fair that New Yorkers will bear the brunt of the liberals' economic and social policies, since they voted for this stuff. Thats small comfort when you consider that the rest of us will be suffering along with them.

Palestinian State, Like it or Not

by Moshe Feiglin

This week, the EU's High Representative for the Common Foreign and Security Policy and former Secretary General of NATO, Javier Solana, proposed that the UN declare the establishment of a Palestinian state and accept it immediately into the United Nations as a way to end the Mid-East conflict.

Solana is just the first breach in the wall. As soon as Netanyahu accepted a two state solution in principle, nobody takes his conditions for such a state seriously. Now the world has begun to decide for us; who should be our Foreign Minister, who should be our ambassador to Egypt and soon, the world will simply create facts on the ground: a Palestinian state in Yesha that will automatically be recognized by the UN.

No need to worry, though. The "Palestinians" will reject Solana's proposal, even if it will be devoid of any restrictions and will include all of Jerusalem. A "Palestinian" state will not be established because the most ideal situation for the terror gangs of Hamas and the PLO (the Palestinian Authority, in the Orwellian language that has been forced upon Israelis) is the perpetuation of the existing reality.

Seven years ago, I penned an article called Beware: A Palestinian State in which I wrote as follows: "Nothing scares Arafat more than the establishment of a Palestinian state. It scares him so much that when he was offered everything - including Jerusalem, including the Temple Mount and including Israeli sovereign territory in the Negev - he started a war. It sounds strange and illogical. He has been fighting all his life for these territories! But a rational analysis of his behavior leads inevitably to this conclusion. Just as the Oslo Accords are not a peace agreement at all, so the "Palestinian struggle" is not a struggle for liberation at all." Click here for full article.

Cossacks do not run countries. Robbers cannot produce anything themselves. They need a source that will continue to produce so that they can continue to rob. When Ehud Barak offered Arafat everything, he quickly started a war. The last thing he wanted was a state.

The "Palestinians" do not want a state. But right now, conditions are being created in which the state they do not want will be established against their will by the UN - and or by Israel.

Moshe Feiglin is the founder of the Jewish Leadership Movement, the largest bloc within the Likud party in Israel. Feiglin and his supporters believe in promoting leaders for Israel who are guided by Jewish religious belief and values. www.jewishisrael.org

Obama in Wonderland

I guess there is a free press in Canada after all.

Time for GOP Senators to Man Up

From Dick Morris:

Only the Senate and House Republicans can save Obama now by compromising and lending his extremist legislation the veneer of bipartisanship in order to remove it as a political issue...The question for Republicans is simple: By lending Obama Republican votes, in return for minor concessions, they are letting him escape the inevitable political damage these issues will cause. There is a time for triangulation, but now is the time to stand firm in strong opposition and not to be bought off by compromises.

Inflation versus Deflation

From Chris Martenson at Chrismartenson.com:

"Inflation correlates poorly with growth in the monetary base, making that statistic relatively useless as a predictor of inflation. However, inflation correlates extremely well with growth in government spending, meaning that we'd do well to track that statistic closely.

The current economic crisis is being fought tooth and nail by a determined Federal Reserve (in the role of the "enabler") and an equally-determined US government (in the role of the heavy-lifter, assuming all the lion's share of the long-term debt and risk). Together, these institutions have virtually consigned future generations to the enormous challenge of wrestling with bloated budgets in desperate need of trimming, further compounded by coinciding with periods of high inflation.

If pressed, I would explain that the policy responses to this crisis are rooted in a cultural mindset of 'kicking the can down the road.' Instead of dealing with the pain caused by past excesses in a forthright and honest manner, preference has been demonstrated for piling on additional liabilities and pushing them ahead at the expense of the future.

If/when even these 'heroic' measures fail, we will discover not only that we've made things far worse than they otherwise would have been, but also that we wasted valuable time, money and political capital vainly attempting to rescue something that not only could not be preserved, but was not even worth preserving.

It is impossible to predict exactly when inflation will hit. It may not descend until a few years from now, or its impact might be felt before the end of the year. Even if inflation is a few years away, now is the time to begin preparing yourself, your holdings, and your portfolio for inflation's arrival. When it comes to preserving purchasing power in a high inflation environment, not all assets are created equally.Business owners, it is time to begin thinking about how high inflation will impact your operations. It will be difficult for many business owners to balance operational cash flows with employees' need for increased salaries to mitigate inflation's impact.

Finally, given the fact that any possible economic recovery will run into the twin walls of outstanding debt and energy limitations, I must conclude that the probability of destructive inflation (or stagflation) far outweighs the likelihood of benign inflation."

Al in Mourning

Now this guy could teach us all a thing or two about how to throw a wake.

Carter in Love

From the June 13 edition of the Jerusalem Post:

Former US President Jimmy Carter was honored by the Palestinian Authority government Saturday (June 13) and pledged to support the Palestinians' campaign for independence to the end of his days.

"I have been in love with the Palestinian people for many years,"
he said Saturday, adding that this is a feeling shared by members of his family.

"I have two great-grandsons that are rapidly learning about
the people here and the anguish and suffering and deprivation of human rights
that you have experienced ever since 1948," he said.

Referring to President Barack Obama's call for an Israeli settlement freeze, Carter said that "in the future, I am sure, he will call for the dismantling of the settlements that exist."

Carter, 85, pledged his "assistance, as long as I live, to win your
freedom, your independence, your sovereignty and a good life.

Is there a more vile human being on the planet? It isn't
enough that Carter facilitated the downfall of the Shah 30 years ago and ushered
in the thugs who now murder innocent Iranians without consequence. Now he
spends his remaining days engineering the creation of an apartheid state
whose charter calls for the destruction of Jews. And to top it all
off, he has proudly infected his children, grandchildren and great-grandchildren
with his sickness.

Oh happy will be the day when the earth is rid of this fetid twisted soul.

Elections Have Consequences

The U.S. House of Representatives this evening passed the largest tax increase and job killer in U.S. history.

It is clear that cap-and-trade is very expensive and amounts to nothing more than an energy tax in disguise. After all, when you sweep aside all the complexities of how cap and trade operates--and make no mistake, this is the most convoluted attempt at economic central planning this nation has ever attempted--the bottom line is that cap and trade works by raising the cost of energy high enough so that individuals and businesses are forced to use less of it. Inflicting economic pain is what this is all about. That is how the ever-tightening emissions targets will be met. Ben Lieberman, and I am the Senior Policy Analyst for Energy and Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Read Mr. Lieberman's testimony to the Senate Republican Conference on June 22.

Yes, my friends, elections do have consequences.

Iran Round-Up

The King of Pop is dead. But the saturation coverage of it lives on. So you may have missed these pieces of commentary and opinion about the Iran election protests:

Hope and Change in Iran. Cliff May of the Foundation in Defense of Democracies (FDD) was a foreign correspondent who was posted in Teheran 30 years ago during the first elections held after the Islamic revolution. He recalls being skeptical of the idea that Khomeini would bring openness and freedom to Iran, while many of the wiser and older veteran journalists believed that the revolution would bring sweetness and light to the country. It turns out that May and others who saw the regime for what it is were right. Under Khomeini's revolution Iran saw "more people executed, imprisoned, and driven into exile than under the shah, egregious violations of human rights, sponsorship of terrorism, Holocaust denial, and genocidal threats." In response, says May, today's Iranian demonstrators "are waging a revolution for hope that has been denied and change that, it seemed, would never come." The least that Obama could do is to lend them moral support.

Iranian Women Leading the Way. Michael Ledeen, the Iran expert at FDD and author of a number of books about Iran's nuclear ambitions, notes that women are playing a lead role in the protests against the Iranian theocracy. Women pose a threat to the regime, which is why they have been subjected to verbal attacks, violence and death. Ledeen even suggests that the targeting and killing of Neda Soltan (the now-famous young woman whose murder by the regime's authorities was captured on video) was an intentional act of intimidation and misogyny by the mullahs against all Iranian women. Ledeen also reports on what he sees as "cracks in the regime" based on reports of a major confab in Qom by some senior ayatollahs unhappy with the status quo.

The Obama Effect. Columnist Caroline Glick notes that the coverage by the media of the Iran story shows the tragic consequences of a media willing to "abandon the basic responsibilities of a free press in favor of acting as propagandists for the president." Even Presidents Franklin D. Roosevelt and John F. Kennedy, both adored by the press, faced a healthy degree of media skepticism and resistance. The media's sycophancy isn't just reflected in the positive attention it gives the president, but also in its selective reporting on important events, like the Iran crisis. This in turn denies the public the information it needs to make informed decisions about the world. Says Glick, "It is due to the media's historic role in maintaining and cultivating an informed discussion and debate about current affairs that they became known as democracy's watchdog. When media organs fail to fulfill their basic responsibilities, they degenerate quickly into democracy's undertaker. "

The End of the Beginning. Roger Cohen writing in The New York Times asserts five reason why the fundamentalist regime in Iran is weakened if not doomed. One reason is that the once lofty Supreme Leader Ayatollah Khameini now has been exposed as nothing more than a "ruthless infighter" to his own people and has lost whatever prophet-like aura he had maintained. Another is that the "soft" intimidation of the Iranian people by the regime will now morph into brutal repression, which will create further anger and resistance among the people. A third reason is that post-"Neda," the rhetoric of Ahmadinejad about "truth and ethics" will ring hollow in the international community. Cohen fails to mention the utter absurdity of Barack Obama's Iran engagement policy in the wake of the post-election actions of the regime.

Obama’s Iran Policy Is a Bomb. So says Jonah Goldberg at The National Review, who-- unlike Cohen-- calls Obama out on his now-defunct Iran policy. Obama apparently clings to hope that he can still talk the mullahs out of their nukes. This will not work, says Goldberg, since even the President's staunchest supporters are repulsed by the brutal nature of the ayatollahs. If the regime prevails, says Goldberg, "anyone who shakes Ahmadinejad’s hands will have a hard time washing the blood off his own."

Let Them Eat Ice Cream. In her inimitable style Ann Coulter calls Obama spineless in his failure to support the Iranian uprising. But why try to paraphrase Ann Coulter when you can read her column right here? (Best line: "you might be a scaredy-cat if...the president of France is talking tougher than you."

My Open Letter to Senator Menendez

Dear Senator Menendez,

As a politically conservative Jew with a strong attachment to Israel, I commend you, a liberal non-Jewish congressional Democrat, for your strong public stance in favor of the Jewish State. Your speech on the floor of the U.S. Senate last week, widely circulated on “YouTube,” directly contradicts the sentiments of our President vis-a-vis Israel as expressed in his June 4th Cairo speech and in other contexts. I hope and pray that your forceful rejoinder to the President’s mischaracterization of Israel’s founding premise his ushers in a growing chorus of similar repudiations of the President’s Israel policy from congressional Democrats and Republicans alike.

In light of the heinous act of violence by James von Brunn, the neo-Nazi anti-Semite who murdered the security guard at the U.S. Holocaust Museum the other week, you are quite correct in your assertion that anti-Semitism has not been eliminated. You rightly condemned anti-Jewish words and deeds in America, Europe and the Middle East. But I was especially gratified by your focus on the issue of Israel’s legitimacy as a Jewish state, which has unfortunately been called into question at the highest levels of government.

Barack Obama asserted that Israel’s founding in 1948 as an independent state was a direct result of centuries of oppression of Jews in Europe culminating in the virtual elimination of European Jewry by the murderous Nazis. Superficially a condemnation of the Jew-hatred that resulted in the Shoah, Obama’s locution was in fact designed to plant the seed of doubt about Israel’s legitimacy in the Middle East. According to his view, Israel’s existence is nothing but an artifact of European post-war guilt. Why should Arabs continue to suffer for the misdeeds of Germany and its sympathizers when Jews are perpetrating morally reprehensible acts of their own against Arabs?

In a powerful riposte you made the undeniable case that modern Israel’s re-establishment as a nation-state is rooted not in the Holocaust but in events occurring in the time of Abraham: “The argument for Israel’s legitimacy does not depend on what we say in speeches…it has been made by history.” You acknowledge that Israel’s legitimacy has been further secured by “the men and women who have made the desert green… by Nobel Prizes earned…by lives saved…democracy defended…peace made and battles won.” From your own experiences in Israel you know that in the heart of every Jew is a strong yearning for peace.

The Arabs have invented a narrative that insists that in anticipation of its declaration of independence in 1948 the Jews of Israel forcibly evicted the Arabs of “Palestine” from their homes. Many Americans—non-Jews and Jews alike--are unaware that this Naqba –“catastrophe”-- did not happen. This is not to deny that isolated acts of brutality and terror by Jews occurred during this time period. But as historian Mitchell Bard points out, “The Palestinians left their homes in 1947-48 for a variety of reasons. Thousands of wealthy Arabs left in anticipation of a war, thousands more responded to Arab leaders' calls to get out of the way of the advancing armies, a handful were expelled, but most simply fled to avoid being caught in the cross fire of a battle.”

To listen to President Obama, it would appear that he has bought into the Arab false narrative without reservation, which explains his willingness to solve the Arab “refugee” crisis at Israel’s expense. You, however, pointed out that while 700,000 or so Arabs left Israel either voluntarily or under pressure from leaders of the surrounding Arab countries, an equal number of Jews were expelled from Arab and Muslim lands they called home for a millennium. At last check no Jew has asked these countries for reparations, territorial concessions or a right of return.

Unlike President Obama, who apparently believes an irredentist terror group like Hamas, which currently “governs Gaza,” can be brought into a unity government with Fatah and negotiate peace with Israel as its equal, you state correctly that there is no moral equivalence between Israel and Hamas:

Israel is a sovereign democratic state of Jews, Muslims and Christians…Hamas is a terrorist organization which won control of Gaza when men in ski masks waged gun battles with another branch of Palestinians. Hamas then used their control of Gaza to launch rockets at sleeping children in Israeli cities. This is the thanks Israel got for withdrawing from Gaza. Hamas does not recognize agreements that Palestinian leaders have made with Israel, does not recognize Israel’s right to exist at all and in fact is ideologically committed to Israel’s annihilation.

I wish that our President and his Secretary of State were possessed of such simple moral clarity. Instead they insist that Israeli citizens stop building in their towns and cities while Palestinians “assassinate [Israel’s] people with rockets and its national character with poisonous rhetoric.” While our Secretary of State doles out a billion dollars to Gaza, its bloody regime continues to import arms financed by Iran and Syria with the help of Egypt and Sudan for the sole purpose of killing innocent Jews.

President Obama says he is “moved” by normal Iranian citizens who risk their lives to protest a stolen election (and the Islamist theocracy), yet insists on “engaging” the brutal regime once they finish cracking the skulls of its citizens. By Obama’s lights the mullahs can be persuaded to give up their nuclear aspirations if only they will sit down across the table from him.

Indeed Israel is in your words a “rose in a desert rampant with repression.” Obama sees Israel as the problem; you see it correctly as the solution to the problem of Arab fundamentalism and extremism. As you said, “we cannot erase the moral distinctions between tyranny and freedom and we must not edit history.”

Sadly, many in the world and even in our own country would attempt just that—to blur the line between the forces of good and evil. Our President specializes in hiding his anti-Israel bias under the cloak of “evenhandedness.” It is not evenhanded to suggest that the life of the Palestinians under Israeli “occupation” is or has been anything like the extermination of the Jews under Hitler. It is the cheapest kind of moral equivalency. It is editing history.

May you be blessed by the God of Israel with the strength and courage to keep standing for Israel and the Jewish people.

Sincerely,

Scott Italiaander

"All The News That Fits...Our Agenda"

That should be the real motto of The New York Times. Blogger and writer Roger L. Simon, founder of center-right Pajamas Media, sheds light on one of the darkest chapters in 20th century history, and how it was distorted by Stalin apologist Walter Duranty, The Times' top foreign corrrespondent circa 1932.

Sadly, not much has changed at The Gray Lady. To this day the newspaper refuses to consider returning the Pulitzer awarded to Duranty in 1932, even though his lies and falsehoods in downplaying the Stalin-induced Ukranian famine of the 1930s are widely acknowledged. If the "paper of record" one day falls under the weight of its accumulated breaches of journalistic integrity and agenda-driven reporting, the Sulzberger-Ochs family will have no one to blame but themselves.

Take 6 minutes and view Roger's second installment of "Burning down The New York Times." (think Jayson Blair).

The Debt: A Visual Aid for the Math Impaired

A year ago liberals and conservatives alike excoriated George Bush for spending money like Paris Hilton on a bender. Of course, way back then we were all a little naive, believing as we did that a $450 billion fiscal year deficit was outrageous and irresponsible.

Apparently liberals have had a change of heart, now that their patron saint is president. With an FY 2009 projected deficit of almost $2 trillion, and a 10-year accumulated deficit projected by Obama's own budget team at $1o trillion, liberal outrage at spending has been strangely absent. You know, like liberal outrage over David Letterman's sexist "slut" jokes about Sarah Palin's daughter.

Next time a liberal tells you how all Obama is doing is trying to get us out of the mess that George Bush got us into, you might want to send him this two-and-a-half-minute visual aid and then ask him exactly how what Obama is doing is going to make anything better.

(HT: Chuck Stein).

Obamacare Posters

From http://www.michellemalkin.com/:

Obama's Muslim Outreach Fails First Test

Only an American administration headed by an utterly arrogant and naive ideologue could have asserted that the Iranian elections were characterized by a "robust debate" which will advance the U.S.'s ability to engage Iran in "new ways." This assertion rings hollow not just because the administration's preferred candidate lost in a rigged election. Even if the so-called "reformist" Mir Hossein Mousavi had won he would have likely followed the party line (and there is only one party in Teheran) laid out by the mullahs, the real bosses of Iran.

Of course Mousavi did not win, and the fact that Team Obama thought he could betrays either a stunning failure of intelligence vis-a-vis events in Iran or a shocking inability to understand the world as it really is. More than likely it wasn't the intelligence that was faulty, it was the way it was massaged by the utopians who populate the State Department and the White House's National Security Council. Using the Left's own derisive characterization of the Bush administration's case for war against Iraq, the Obamacons politicized the intelligence.

Notwithstanding the outcome of the Iranian election (which the nutty Mahmoud Ahmadinejad won by an apparent landslide), Obama's faux-visionary "Hope and Change" routine has morphed pathetically into "Hope for Change." Obama gives a speech in Cairo 10 days ago in which he hails Islam's "tolerance" and its indispensable contributions to humanity that his minions in government and the media hope will result in sweeping change throughout the Muslim world. (I am a little fuzzy on the need for all this change when according to Obama all is fine and dandy in Islam). This is wishing against the evidence that mere words (as long as they are Obama's) can change the directional flow of human nature and thus change the course of human events to Obama's liking.

If the election results were not a definitive rebuke to those who engage in such wishful thinking, then the events immediately following should be. According to reports, "by Saturday afternoon, riot police and Revolutionary Guards thugs were clashing with thousands of protesters who surged onto the streets of Tehran after their defeated hero, Mousavi, said he strongly protests 'the many obvious violations that could lead to tyranny in Iran.' The Iranian government has blocked Mousavi's ability to communicate to his supporter via text messaging and has refused to allow him access to Iranian TV. Even the "BBC," the Left-leaning British government controlled media, reported that their satellite has been jammed by the Iranians, preventing them from transmitting to its Persian and Middle east viewers the true state of affairs in post-election Iran.

When asked about such irregularities, including the blocking of the publication of allegations of election fraud by Mousavi's house newspaper, Ahmadinejad abjured his questioner not to worry about such things as press freedoms. ""Newspapers come and go and reappear. Don't worry about it."

Perhaps this is the Iranian regime's understanding of "robust debate." And yet it is unlikely that any of these gross displays of power and intimidation will in any way dissuade Obama from attempting to "dialogue" with the rogue regime.

And all of this comes at a time when Iran threatens Israel daily with nuclear destruction while North Korea seems determined to ratchet up the pressure on the Obama administration by threatening a nuclear confrontation if Obama enforces the U.N. Security Council's sanctions against the country. It is no coincidence that America's enemies are probing our new president for weakness, just as V.P. Biden said they would. It is apparent to them that President Obama has no stomach for standing up to those who would threaten us.

It is becoming increasing obvious that Obama is as clueless when it comes to the nature of dictatorial regimes (other than his own, at least) as he is when it comes to fiscal and economic policy. In either case such detachment from reality is dangerous. But with regard to our dealings with apocalyptic regimes like Iran and North Korea, Obama's flight from reality can be downright catastrophic.

"We are going to change the world. Please, don't interfere."

So said an American official to Israeli Prime Minister Netanyahu, according to Israel's Channel One televison. Netanyahu's aides reportedly took that as a "threat."

Ya think?

Europe swings Right as depression deepens

So says Ambrose Evans-Pritchard, the U.K. Telegraph's International Business Editor based in London, in his business blog Monday. He notes that in European parliamentary elections "left-wing incumbents in Germany, Austria, the Netherlands, Spain, Portugal, Hungary, Poland, Denmark, and of course Britain were either slaughtered, or badly mauled." Evans-Pritchard is not quite sure why, given the "ultimate crisis of capitalism" so many of the "blue-collar working base has swung almost overnight from Left to Right," but he suspects rising unemployment is the key to it all.

Evans-Pritchard was an early economic doom-and-gloomer, and remains so even while most economists and pundits keep tending those 'green shoots" we keep hearing about. He believes that the deficit countries (U.S., U.K., Spain, etc.) have sharply increased their savings rate and thus reduced consumption while the "surplus countries" of China, Japan and Germany have not stimulated demand sufficient to offset this. According to Evans-Pritchard the global system is in depression, with a potentially devastating "Stage II" still to come (a la 1932 after the "green shoots" of 1930-31).

Speaking of green shoots, Evans-Pritchard concludes his recent piece with this:

Don't count on the political fabric of Europe holding together if our green shoots shrivel and die in the credit drought of the long hot rainless summer that lies ahead.

Tough stuff. You won't find that sort of frankness in the American business press.

Obama in Wonderland

I read parts of President Obama's appalling "Muslim outreach" speech given last week in Cairo but haven't watched the whole thing...yet. I heard it was almost an hour long and I'd rather take a root canal without Novacaine than sit through that.



Thanks to columnist and military expert Ralph Peters I may never have to. He has delivered a devastatingly sarcastic piece summarizing the whole dismal thing. Peters says thanks to Obama's speech he has learned quite a lot about Islam that he never knew before, like “Islam has a proud tradition of tolerance” and “Islam has always been a part of America’s story.” He wonders how the Founding Fathers missed that last part.



Peters most pungent line is in response to Obama's statement that “America’s strong bonds with Israel are . . . unbreakable.” "Yup," says Peters, "And they're issued by Chrysler."

Proven Wrong in Less Than a Day?

Yes, its true...I may have to admit that I erred. In Wednesday's post about journalist Caroline Glick's PJTV interview in advance of Obama's speech yesterday, I mentioned security policy expert Frank Gaffney's prediction that once Obama's policies vis a vis Israel come to light, the president will encounter resistance even from liberals in Congress. I pooh-pooed that as a "faint hope," in that liberals in Congress seemed quite ok with Obama's Middle East policies.

Today Politico.com reports that some Congressional liberals are indeed chafing at Obama's audacious bid to change drastically America's Israel policy, especially the pressure being brought to bear on Israel to halt settlement expansion. Rep. Anthony Wiener, a reliably liberal New York Democrat, said: “There’s a line between articulating U.S. policy and seeming to be pressuring a democracy on what are their domestic policies, and the president is tiptoeing right up to that line." Even the rabid defender of Obama policy Rep. Robert Wexler of Florida takes issue with the administration's broad definition of "settlements."

Democrats, or some of them anyway, apparently think it is unwise for Obama to be equating the relatively small issue of Israeli settlement expansion with Palestinian terrorism, Arab hostility to Israel and Iranian intransigence in regard to the nuclear issue. They are not likely to be comforted by Obama's Cairo speech, which continued the moral equivalence game to an outrageous degree, in effect blaming Israel for the "intolerable" plight of the Palestinians.

So it does appear, as Gaffney suggested, that there is a growing reluctance among Democrats to support fully Obama's new Israel policy, at least at the margins. Whether that reluctance will lead to full-throated resistance, or whether in any event it will have any effect on Obama's headlong rush into the arms of the enemies of freedom, is an open question.

June 4th, 2009: Day of Infamy?

Tomorrow, one day before the 42d anniversary of the famed "Six-Day War" between Israel and the Arab countries surrounding it, Barack Obama will deliver an address in Egypt, the primary antagonist and big loser of that war. While only Obama and his advisers know what is in the speech, it is not hard to predict that it will be dismaying to Israel's leaders and citizens, and millions of Jews elsewhere. Not only will Obama reiterate the themes of his interview with Al-Arabiya Arab television early in his presidency in which he advocated closer ties between America and the Arab-Islamic world, but he will likely use the speech to signal to Israel's friends and foes alike that the "special relationship" between the U.S. Israel is drawing to a close.

On the eve of this historic event it would be well to take time to watch this 15- minute PJTV interview of The Jerusalem Post's Caroline Glick. Ms. Glick is known to many who follow security issues in the the Middle East and in particular Israel for her insight and moral clarity with respect to the threats facing Israel and the West. Like her writing style, her tone and demeanor is direct, dry and humorless, which tracks rather well with her downbeat outlook on a depressing series of events. Nevertheless, I think her assessment of the current state of play between the U.S., Israel and the rest of the world is, regrettably, dead on.

Some examples:

--Obama is intentionally engineering a crisis in U.S. relations with Israel in advance of Obama's trip to the Middle East. The crisis is designed to marginalize the Israeli government in the hopes that it will crack (fall) under the pressure.

--It is now American policy to forcibly remove almost a million Jews from their homes in the West Bank (Judea and Samaria, the historical biblical lands of the Israelites) to make way for an "apartheid" Arab state in which no Jew will be permitted.

--America is openly and clearly overturning a range of strategic agreements with Israel established under previous American administrations (Democrat and Republican alike), but particularly understandings with President Bush concerning Israel's security and borders.

--The U.S. policy is now abject appeasement of the Arab world, and Israel is the "currency" we are using to do this.

--Rahm Emanuel (about whom I wrote in this space several weeks ago) is Obama's hatchet man in implementing this policy. He is actively trying to destabilize the Netanyahu government by pressuring American (liberal) Jewish organizations to criticize Israel's policies regarding settlements and borders as well as control of Jerusalem's holy sites. In effect Emanuel is trading on Obama's popularity among American Jews in order to convince them to sell out Israel.

--Obama has raised the possibility of sanctions on Israel if it doesn't follow Obama's demands on halting settlements. He has also suggested that the U.S. cannot be counted on to veto anti-Israel resolutions in the U.N.

--Palestinian leader Abbas continues to incite his populace against Israel and has not one iota of interest in peace with the Jewish state. He refuses even to entertain the notion that Israel would or should retain its Jewish character.

--The fact that there is no one among the Palestinians with whom Israel can negotiate seems not to trouble Obama one bit, for he is intent on shoveling money and support to the failed-state-in-waiting.

--Obama's decision to bypass Israel on this trip to the Middle east is a deliberate and "dismal" signal to Israel's enemies that it is now open season on Israel.

It is worth noting that Glick's colleague Frank Gaffney of the Center for Security Policy doesn't believe that Americans will ultimately support this dastardly policy:

It is hard to believe the Obama Middle East agenda enjoys the support of the American people or their elected representatives in Congress. Historically, the public and strong bipartisan majorities on Capitol Hill have appreciated that an Israel that shares our values, that is governed democratically and that is in the cross hairs of the same people who seek our destruction is an important ally. Quite apart from a sense of moral and religious affinity for the Jewish people's struggle to survive in their ancient homeland, most of us recognize it is in the United States' strategic interest to stand with Israel.

Gaffney hopes that as Obama's policies and their implications become more widely known "he will find himself facing the sort of popular and congressional revolt that has confronted him in recent weeks on Guantanamo Bay." This is a faint hope indeed, since Obama appears to have support for his policies from the vast majority of liberal Jews and Jewish congressmen.

In the meantime, if as predicted Obama's Cairo speech is the opening salvo in a campaign to marginalize Israel, then tomorrow, June 4th, 2009, will truly be a day of infamy.

The Clock is Ticking (and the Bond Market Knows it)

Forget "what are we doing to our kids and grandkids?" How about: "what are we doing to ourselves?" Check it out.

The Jewish Delusion (Part II)

A few weeks ago I wrote about the self-deception of American Jews
when it comes to the Obama administration's approach to Israel. That Jews are deluded into thinking that Obama's Israel policy is benign was crystallized in the reaction of liberal Jews to Rahm Emanuel's selection as President Obama's Chief of Staff. It was said that Emanuel's pro-Israel credentials were "impeccable," and thus he would temper any inclination on Obama's part to pressure Israel unduly vis a vis the conflict with the Palestinians.

Events have quickly shown just how misplaced the Jews' faith in Emanuel is. Last week Israeli Prime Minister Benjamin Netanyahu came for his first audience before His Holiness Barack Obama, the Omniscient. It must have been humiliating for the experienced pol Netanyahu, in his second turn as his nation's leader, to bow and scrape to the young, callow yet arrogant fellow who now leads the country that has heretofore been Israel's closest ally and protector. Netanyahu's effusive praise for Obama's intelligence and leadership at the post-meeting press conference illustrated what a political pro Bibi really is, for only a professional could make such sickening sycophantism sound sincere.

A close read of the transcript of the press conference reveals just how large the chasm between Obama's agenda and geopolitical reality is. While both leaders acknowledged the threat that Iranian nukes would pose to Israel, the Middle east and the U.S., it was clear that the Iranian problem is secondary to Obama's desire for a Palestinian state. In answering a reporter's question about linkage of the Palestinian-Israeli "peace process" to stopping the Iranian nuclear program, Obama said, "to the extent that we can make peace with the Palestinians -- between the Palestinians and the Israelis, then I actually think it strengthens our hand in the international community in dealing with the potential Iranian threat."

Much was made also about Obama laying out a negotiating timetable with Iran. But according to Caroline Glick of The Jerusalem Post, talk of a timetable is a red herring designed to sucker Israel into non-action until it is too late. Obama's timetable would extend until December or January the appeasement negotiations with Iran, after which would begin the fruitless effort to win approval of international trade sanctions against Iran. By the time this effort is seen to be a dead end, Iran's nuclear program might well be unstoppable.

Thus, Obama's statements can be seen as either hopelessly naive (believing the absurdity that if Israel will only give away its security for the sake of a Palestinian state Iran will stand down) or craftily manipulative (holding Israel's fear of Iran as a sword of Damocles over it in order to force Israel into untenable territorial concessions). Whichever it is, the result is the same--a potentially fatal reversal of the priorities which common sense dictates should command the world's attention.

In other words, a relentless and successful effort to stop Iran's nuclear aspirations in its tracks is a prerequisite to ridding Fatah and Iran's proxies Hamas and Hezbullah of the belief that it could ever hope to vanquish Israel, which in turn is a sine qua non of Israel having the breathing space to actually consider "taking risks" for peace.

As for Bibi Netanyahu, according to Glick he survived his close encounter of the weird kind with Obama, in that he "succeeded in evading the policy traps Obama set for him. Netanyahu reserved Israel's right to act independently against Iran and he conceded nothing on the Palestinian issue." Indeed, late reports indicate that Bibi has already defied Obama's call for a building freeze in the West Bank. While for now Israel won't build new settlements, Bibi refuses to halt expansion of existing ones within "natural boundaries."

But this only sets the stage for a titanic battle of political will between Israel and the U.S. that Israel cannot win without deft maneuvering. Glick suggests that Bibi take steps to mitigate Obama's upcoming June 4th Cairo speech in which he will lay out his vision of Middle East peace by first announcing a new Israeli plan. In essence, the Glick-Bibi plan would call for immediate dialog between Israel and the Arab League or the Islamic Conference with a view towards quick normalization of Pan-Arab relations with Israel. This would be followed by implementation of a joint program for combatting terrorism, which in turn would lead to final status negotiations between Israel and the Palestinians.

Of course Glick has no pretensions of success here. The point is to lay something on the table before Obama's June 4th speech that calls on the so-called "moderate" Arab states to put up or shut up. King Abdullah of Jordan and Obama both claim that the Arabs are willing to accept Israel. So why not test their seriousness with a serious offer to immediately conclude a recognition pact while at the same time press the case for action against Iran.

**********************************************************************

A more fundamental problem then the posture of the Obama administration vis a vis Israel is, according to journalist Aaron Klein, the political, social and religious dynamics within Israel herself. Klein, Jerusalem bureau chief for Worldnetdaily, has written an essay called "The Late Great State of Israel," excerpted from his book of the same name. Klein concludes that there is an ongoing war between Israel's secular governing elites (Netanyahu included) and the national religious Jews who comprise the vast majority of the almost 500,000 "settlers" who live in towns and cities and enclaves in the West Bank:

Few have any idea how the country is being torn apart by an Israeli war against the "national religious" - a battle of Jew versus Jew in which those in power who want the country to resemble a secular, Europeanized state suppress a significant segment of the population that wants to keep Israel a Jewish country defined by its profoundly Jewish history, traditions, and character.

This ideological battle led to a succession of disasters in Israel since 2005, when Israel uprooted 9,000 of its citizens from their homes in Gaza, ho then saw how their beautiful villages were turned into wastelands by the Palestinians who took over. The 2006 defeat in Lebanon followed by the inconclusive incursion in Gaza in 2009 has left Israel on the brink of national disaster, with a governing elite "hell-bent on pursuing the same failed policies that have resulted time and again in large numbers of Jewish deaths and the handover of strategic land to terrorists, fueling a worldwide perception of Jewish weakness."

Klein wrote his book not as prophecy but as a warning against complacency and self-delusion. He intends the book to stimulate debate and action to change the disastrous policies that have led Israel into an existential crisis. Israel's leaders have led the country into a "calamitous downward spiral" that will be difficult to reverse. Says Klein, "while the Psalms reassure us that 'the Guardian of Israel neither slumbers nor sleeps,' the current leaders of Israel are fast giving away the land and strength with which the Jews have been blessed."

It is a sobering essay and its thesis heartbreaking to contemplate. But Mr. Klein, obviously a believer in the G-d of Israel, concludes with a mixture of hope and angst:

I trust and believe that Israel will ultimately survive - against all odds and in spite of the threats from within and without - only through the grace of God. But for now, things don't look good.

The True Moral Hazard of Bailouts

from Eric de Carbonnel, an admitted perma-bear and market skeptic:

Most commentators misunderstand the true moral hazard of bailouts. While bailouts might have an adverse effect on the future actions of individuals and businesses by encouraging risk taking, the real problem is their effects on future actions of the government. Specifically, each bailout makes it harder to say no to the next bailout. This pressure to fund future bailouts is made far worse if those receiving bailout money are truly undeserving. After all, if the government is going to give $45 billion to Citigroup (one of the banks responsible for our current mess) and insure $306 billion of its riskiest assets, then how can it say no to bailing out the state of California or South Carolina?

This “me too” phenomenon will get much worse after the treasury market collapses, and the fed starts monetizing the treasuries that were sold to fund the current bailouts. If the Fed printed money to bail out the banks, why shouldn’t it print more money to fund unemployment benefits? Politically speaking, you can’t bail out the irresponsible and then let the responsible sink, which means Congress isn’t going to be saying no to a lot of the bailout requests this year. Unfortunately, these bailouts will become increasingly meaningless because, when you bail everyone out, you bail no one out, as you destroy your currency.

That was an excerpt from Eric's "Ten Major Threats Facing The Dollar In 2009" for the full treatment. It was written in January, and the bailouts and takeovers have only accelerated since then, as have the attacks on the status of the U.S. dollar as the world's reserve currency.

We are in a brave new world. We are going to have to educate ourselves about debt, currency and monetary policy. And gold, silver and other "physicals." Watch the stock market if you're worried about your retirement. But it's what happens to the money supply, the bond markets and the currency markets that is going to determine our standard of living in the not distant future.

"Inflate or Die"

WARNING: the subject matter of this post is the economy, monetary policy and the financial system. Reading this may lead to eyes glazing over, sudden fatigue and loss of wakefulness.

Many years ago I wrote that the fate of the US will be expressed in three words--INFLATE OR DIE. We are there now. Printing trillions of dollars of Federal Reserve Notes must end in inflation.-- Richard Russell, Dow Theory Letters, May 13, 2009

In a speech he gave in 2002 when he was a Governor of the Federal Reserve, Fed Chairman Ben Bernanke signalled his preference for aggressive Fed action to counter asset deflation should it occur on a sustained scale in the United States: "If we do fall into deflation," said Bernanke, "we can take comfort that the logic of the printing press...must assert itself, and sufficient injections of money will ultimately always reverse a deflation." In short, Bernanke argued that when traditional monetary actions to stimulate demand, i.e., reducing the short-term interest rates at which banks borrow money from the Fed, are exhausted, the Fed could and should "drop money from a helicopter" if necessary to increase (inflate) the number of dollars in circulation and effectively raise the dollar price of goods and services. This then-theoretical policy prescription earned Bernanke the nickname "Helicopter Ben."


In early March 2009, Bernanke's theory met reality. With the Fed funds rate practically "zero bound," the Federal Open Market Committee (FOMC) announced it was going to buy--monetize-- up to $750 billion of agency mortgage securities (i.e., securities issued by Fannie Mae and Freddie Mac) and $300 billion in long-term (30-year) Treasury bonds. The implications of this are manifold. First, the Fed doesn't have the money to buy over a trillion dollars of assets, so it has to "create" it out of thin air. This is accomplished by the Fed "borrowing" electronic credits from the Treasury which is then used to buy the assets. The issuance of these electronic credits is the digital equivalent of printing money.

Second, the debt instruments the Fed is buying are financing the "stimulus" and all of the other deficit spending of the last year and this year. In essence the Fed is soaking up the inventory of these instruments and thus keeping their prices up. This has the effect of keeping interest rates low (a bond's yield typically falls as its price rises), which in turn (theoretically) stimulates mortgage and commercial borrowing. But this comes with a price: the artificial creation of a "bubble" in bond prices, which cannot be sustained indefinitely.

Third, the monetization of agency debt and Treasuries poses a significant risk to relations with our trading partners, who get get nervous when they see what looks like the intentional debasement of our currency. An over supply of fiat dollars lessens the value of all dollars in the system. China holds more than a trillion dollars of dollar-denominated bonds in its reserves purchased with dollar surpluses from its exports to the U.S. They are rightly concerned that those reserves will lose value if our dollar is trashed, and so they are already curtailing their U.S. debt purchases. This will lead to higher interest rates forcing the Fed to come in and buy up even more debt with more printing press money, further debasing the dollar.

A devalued dollar will make our exports more attractive than those of our competitors in Europe and Asia, leading them to devalue their own currencies to save their economies. This sort of competitive devaluation leads to trade wars, which often lead to something more deadly.


It is instructive to note that although Bernanke in 2002 believed in the Fed's ability to cure deflation by injecting liquidity into the system, he believed even more in the Fed's ability to prevent deflation in the first place. Judging from the Fed's actions of late we are already past the point of prevention and now trying to effect a cure. Can it not be said that the Fed's anti-deflation policy has already failed, and that the policy prescription of printing fiat (paper) money and debt monetization is a last ditch effort to save the system?

Ah, you ask, hasn't the deflation risk been wiped away with the "green shoots" of the economic recovery we've been hearing about? And with the financial system awash with all this fiat money, shouldn't we turn our concern to inflation, maybe even super-inflation? Well, no. And yes.

The powerful stock market rally over the last two months has created the illusion of market and economic recovery. But it is well to remember that the rally was powered by the surprisingly strong first quarter bank earnings released in early April. A look behind the numbers, though, reveals two things. First, the banks benefited from a change in FASB Rule 157(e), allowing the banks to manipulate the balance sheet value of their assets. Second, the banks benefited from the low cost of borrowed funds as a result of the Fed's suppression of the Fed funds rate and the monetization policy. According to investment guru John Mauldin, this is the "equivalent of the US government reducing the cost of goods to zero for the embattled car companies and then going on to buy--courtesy of the US taxpayer--a couple of million cars that nobody really needs." In that environment anyone can show a profit.

Whenever you hear the financial mass media promoting "green shoots" and stoking a new bull market, it is wise to be cautious if not downright skeptical. If the financial pundits of CNBC say something, the opposite is likely true. The sobering fact is that the U.S. may be slipping further towards "outright deflation, just as Japan did," according to Albert Edwards of Societe Generale, the large French bank. Companies and consumers are retrenching en masse, with the former laying off workers and the latter hoarding cash and paying down debt.

In fact, some analysts calculate that the 15 largest banks have experienced reductions on their balance sheets of $3.6 trillion, with another $2 trillion more yet to be written off this year. And the problem may be worse in Europe. The IMF believes that European banks have written off less than half of total losses related to the credit crisis.

The media and many investors may be buying the "green shoots" spin, but clearly Bernanke is not. He has access to all the Fed's data and then some, and so he must know that another wave of the credit crisis approaches. Delinquencies on Alt-A and adjustable mortgages are accelerating, and prime and jumbo loans are now starting to suffer. And rumor has it that commercial real estate loans are the next shoe to drop. Another wave of losses means that more banks fail, credit gets tighter, businesses contract, layoffs accelerate and spending plummets.


That we are in deflation now may not be apparent in the prices of goods and services--yet--but is evident by the fact that the Fed is risking massive inflation in order to reflate the economy. Bernanke is frightened to death of deflation, because it is so devastating and so hard to climb out of. It is an economic death spiral of sorts. The Fed is doing everything it can to prop up the monetary system, by dropping money into it while at the same time propping up the bond market by buying medium and long-term Treasuries.

What if it doesn't work? Bernanke's theory as expressed in 2002 didn't anticipate a concurrent banking crisis, at the heart of which is a credit crisis caused by toxic assets of unknown value sitting like a cancer on the balance sheets of the banks. The data suggest that the injection of money into the financial system by the Government (through bailouts, guarantees, preferred stock purchases and mortgage purchases) is still trapped in the financial system. The banks are leaving their electronic money in the electronic vaults of the Fed because they are afraid to lend to one another. This means that all that created money has no "velocity," and doesn't have the stimulative effect intended by the Fed. Thus the country risks sinking further into the deflation trap.

And inflation? It is coming, sooner or later. The Fed's "inflate or die" policy ensures that it will do whatever it takes to get out of the deflation ditch, and eventually we'll recover. The question is, what impact will the government's deficits and the Fed's money policy have on our currency and on the rating of our bonds? According to the IMF the US has racked up almost 12 trillion dollars in debt with another 45 billion in off-balance sheet obligations, not to mention multi-trillion dollar annual deficits for years to come. Medicare and Social Security will go bust before 2017, threatening even more debt in the out years. Surely this will have consequences.

My guess, and its just a guess, is that we will end up defaulting on our debt. This will be done by cheapening the dollar through super- or hyper-inflation to the point that our creditors may as well forgive their loans to us. This may be less bad then it sounds because most other nations will be in the same boat. But the price we will pay for this is the loss of King Dollar as the world's reserve currency. Whatever else that means, it certainly means the loss of our economic sovereignty.

So what happens next is anyone's guess, but for clues keep your eye on the bond market. Thats where the real money is. Yields on 10-year Treasuries, which anchor mortgage rates, are over 3%. The Fed will try to suppress these rates with more debt purchases, but at some point they will run out of bullets. If and when that happens, rising rates will threaten the bond market.

I don't know quite what would follow a crash of the bond market. But I suspect it wouldn't be pretty.

Bulletin: Liberal Asserts Cheney Could Be Right!

Sometimes the liberal Richard Cohen of the Washingpon Post offers a point of view that surprises. In this case it is that the hated Dick Cheney may, for the first time in his 40-year career as a public servant be right: enhanced interrogation works.

In the sanest paragraph I've seen written by a certified member of the MSM on the "torture" memos, Cohen says:

Cheney says he once had the memos in his files and has since asked that they be released. He's got a point. After all, this is not merely some political catfight conducted by bloggers, although it is a bit of that, too. Inescapably, it is about life and death -- not ideology, but people hurling themselves from the burning World Trade Center. If Cheney is right, then let the debate begin: What to do about enhanced interrogation methods? Should they be banned across the board, always and forever? Can we talk about what is, and not just what ought to be?

Cohen also wonders whether these memos might shed some light on whether Nancy Pelosi is lying about her insistence that she wasn't briefed about these techniques.

In calling for release of the memos which Cheney says vindicate the Bush administration policy on interrogation post 9/11, Cohen argues: "The Obama administration ought to call Cheney's bluff, if it is that, and release the memos. If even a stopped clock is right twice a day, this could be Cheney's time."

I recalling praising Cohen in these pages on some other issue, since forgotten. Maybe even liberals are right twice a...life.

Michelle Malkin: Battered Hedge Fund Managers’ Syndrome

A hedge fund manager risks his career by calling out Obama's cheap political trick of demonizing the same financial industry heavyweights who got him elected in the first place.

Was Pelosi Briefed On "Enhanced Interrogations"?

She claimed she wasn't. But according to the CIA, she was among the first members of Congress to be briefed on the harsh interrogation tactics being used on Al-Qaeda prisoners, way back in September 2002.

Either Pelosi is a liar, or an idiot. Or both. (I vote for "both.") Nancy Pelosi is surely the most corrupt, disingenuous and craven politician in Congress today. Of course with Harry Reid, Chuck Schumer, John Kerry and Dick Durban in the Senate and Charles Rangel and Barney Frank in the House its a pretty close contest.

Lets see how much scrutiny Pelosi's lies get in the media in the days ahead. My guess is: not much.

The Jewish Delusion (Part I).

I found it curious that after the November election so many liberal Jews rationalized their vote for Barack Obama by touting his selection of the Jewish congressman from Illinois, Rahm Emanuel, as his chief of staff. We were told that Emanuel’s pro-Israel credentials are impeccable. "Rep. Emanuel is…a good friend of Israel, coming from good Irgun stock, davening [praying] at an Orthodox synagogue, and sending his children to Jewish day schools," said a top Jewish community spokesman, William Daroff, when Emanuel’s appointment was announced. (The Irgun was the right-wing military faction headed by the late Prime Minister Menachem Begin during Israel’s War of Independence). The clear implication was that Rahm Emanuel’s elevation to Obama’s chief aide proved that Jews had no reason to fear the new president’s policies towards Israel.

It seems rather odd to justify a vote for a political candidate based on an action taken by him after the vote is taken. No voter had the slightest idea who Obama would pick as his chief aide before pulling the lever for him, and frankly could care less. But obviously some Jews felt a wee bit defensive about suggestions that Obama would be hard on Israel and soft on its enemies, and thus played the “Rahmbo” card to convince others and perhaps themselves that the chief of staff would stand athwart any attempt by Obama to sell Israel to the Arab wolves. They and we had reason for nervousness well before the election, in light of the surfacing of audio recordings of the all-time greatest hits of Jew-hatred spewed from the pulpit of Obama’s (former) pastor the Rev. Jeremiah Wright as well as revelations of Obama’s associations with radical Arabs like Rashid Khalidi, the anti-Israel professor and acolyte of the late Edward Said, the polemicist/apologist for Palestinian terror against Jews. None of this prevented liberal Jews from voting for Obama, but they must have had some qualms nonetheless. Emanuel’s rise to chief of staff no doubt settled them.

That a well-placed Jew in the White House could or would be able to change the policy of a determined president is laughable. History is replete with examples of well-positioned Jews who succumbed to the blandishments of title, honor and position and willingly did the bidding of their rulers regardless of the consequences to their co-religionists. As a result of this, Jews may be the only people on earth with mixed feelings when one of their own seeks and/or obtains high government position. (During the 2000 presidential contest even Jews who admired Joe Lieberman fretted over whether having him as the first Jewish vice president would be “good for the Jews.”)

On Sunday Mr. Emanuel, the putative guardian of Jewish interests in the Administration, weighed in on the Israel-Palestinian conflict and the Iranian nuclear threat. The occasion is the AIPAC policy conference taking place this week in Washington, where thousands of pro-Israel activists are gathered to hear speeches by U.S. and Israeli leaders, lobby Congress to support efforts to stop Iran from going nuclear, and network with their fellow activists. According to The Jerusalem Post, Emanuel said in a closed-door meeting of 300 top AIPAC donors and board members that “it will be easier” to recruit Arab nations to oppose Iranian nukes if “progress” is made on the Israel-Palestinian track, meaning that Israel ought to first make concessions to the Palestinians before Arab countries will support sanctions against Iran. This echoed Hillary Clinton, who in April “warned Israel that it risks losing Arab support for combating threats from Iran if it rejects peace negotiations with the Palestinians.”

Mr. Emanuel’s defenders in the press point out that some who attended the meeting with Emanuel said he didn’t actually “link” the two issues—i.e., Israeli concessions to Palestinians and American efforts to stop Iran-- as had been reported on Israeli TV. Perhaps he didn’t, but that’s not the point. Taken together with President Obama’s stated belief that the creation of a Palestinian state is the key to addressing Arab and Muslim grievances in the Middle East, Afghanistan, Pakistan and south Asia, Emanuel’s remarks and Clinton’s warnings can be seen as a blunt threat to Israel: concede to the Palestinian Arabs’ demands for the West Bank, the Golan and Jerusalem first, then we’ll see if we can cajole the “moderate” Arabs to support sanctions against Iran.

This is obviously a dangerous and dastardly game for several reasons. First, it flies in the face of logic and history to suggest that Israel retreat to borders that are known to be indefensible. The so-called 1967 borders, in place for 19 years following the War of Independence, were unstable and constantly probed and breached by the Arabs. Throughout the 1950s and 1960s Jordanian and Egyptian gangs from the West Bank and Gaza plotted and staged terror attacks inside Israel proper, killing dozens of Jews. Syrian troops regularly rained rockets and artillery down on Israel from their perch on the Golan Heights. Jewish access to the Jewish holy sites like the Western Wall and the Temple Mount in Jerusalem or Rachel’s Tomb in Bethlehem was denied. And this was before the so-called "occupation;" before Palestinians had been fully radicalized by the likes of Yasser Arafat; and before they had access to sophisticated weapons like Kassam or Katyusha rockets.

Only a fantasist could believe that a retreat by Israel to the old borders would lead to a better result.

Second, the Administration makes no reference to the realities of Palestinian polity. George Bush wanted a Palestinian State, to be sure, but not at the expense of Israeli security needs and certainly not without reform of Palestinian institutions. Bush’s talk of two states “living side by side in peace” always implied the establishment of democratic institutions in Palestine as a prerequisite to peace. Bush may have been naïve in his belief that the Palestinians were capable of accomplishing this, but at least he understood that it was a sine qua non of Palestinian statehood. That’s why once the radical Hamas took over in Gaza Bush more or less turned his back on the whole enterprise.

Not so Obama. There is almost no talk by him or his emissaries of Palestinian institution-building as a predicate for peace. In fact it is quite the opposite. On her first visit to the region as State secretary, Hillary Clinton pledged $900 million dollars for Gaza reconstruction virtually without conditions, assuring that the money will be controlled by the Islamist terror group in charge of Gaza, Hamas. She then travelled to Jerusalem where she took Jerusalem’s mayor to task for demolishing illegal Arab buildings. She “urged” Israel to ease up on border closings and allow humanitarian aid to Gaza, as though Israel and not the Palestinians were responsible for the human crisis inside that fetid strip.

Clinton and special envoy George Mitchell have placed almost unrelenting pressure on Israel to curry favor with the Arabs on the Iran issue by caving in to their demands for an immediate commitment to give the Palestinians a state, no matter its character. Meanwhile the Administration and Europe hints at opening a “dialogue” with the Hamas, which rules Gaza with an iron fist and threatens Prime Minister Mahmoud Abbas’ hold on the West Bank.

Third, Obama gives every indication of backing away from the bipartisan “special relationship” with Israel. According to unconfirmed reports, Israeli intelligence has warned Israeli Prime Minister Bibi Netanyahu that Obama wishes to “incrementally diminish U.S. strategic cooperation” with Israel. Even if this report is unfounded, Obama has given every indication that he favors closer relations with Syria and Iran. He has made no secret of his desire to engage Iran, and he has sent emissaries to Syria to feel them out about improved ties. In fact, Jimmy Carter proudly boasted to the Israeli daily Haaretz that he expects full ties between Syria and Washington to be established this year. Who can doubt that Syria’s price for full diplomatic relations with the U.S. is a total repudiation by Obama of the “special relationship” with Israel?

None of this is a surprise to staunch supporters of Israel who opposed Obama. They understood Obama’s world view because they understood those of the radicals he hung around with. What is surprising (and dismaying) is the continuing refusal of liberal Jews to see the danger posed to the Jewish State and therefore to worldwide Jewry by the reckless and frankly depraved anti-Israel policy being pursued by Obama, Clinton, and Mitchell (with the apparent full support of their guard-dog, Rahm Emanuel). Undoubtedly many well-intentioned Jews believe a “two-state” solution is in Israel’s ultimate best interests. But even they must have gotten the lesson from the Lebanon war of 2006 and the Gaza war of 2008-09, to wit: territory surrendered by Israel to its enemies is soon converted into staging areas for rockets and missiles fired against its citizens.

The Jews who offered Rahm Emanuel’s elevation to Chief of Staff as proof that Barack Obama is committed to Israel’s security ought to take a second look at Obama’s Israel policy. In his first media interview after his inauguration (to Arab television), Barack Obama lauded the so-called “Saudi Peace Plan,” the terms of which demand that Israel retreat to borders cynically called the “Auschwitz” borders precisely because they are indefensible. Israel is now being pressured by the U.S. into accepting this “plan,” with some changes from the original, as the basis for negotiations with the Arabs, while the ticking time bomb of Iran’s nuclear program is held over its head like a sword of Damocles. Taking advantage of an ally’s existential fears in order to extract deadly concessions to an unrepentant enemy is not only audacious, it is immoral.

American Jews need to snap out of their Obama-induced delusion and see the world as it really is. Their lives depend on it.

Richard Russell on the Markets

Richard Russell, in his mid-80s, has been writing The Dow Theory Letter for 51 years. I recently became a subscriber and am fascinated by the economic and cultural insights of this veteran of the markets and of life.

Russell is a technical rather than a fundamental analyst. And yet he has a solid grasp of the fundamentals-- of economics, debt, money and life. He is not a perma-bear...in fact he has called several bull markets accurately...but he remains bearish notwithstanding the powerful market rally since early March.

What follows are excerpts from Russell's May 5 daily remark. You may agree or disagree but you at least ought to consider the musings of this old World War II combat veteran. His kind won't be around too much longer.

(Bold highlights are added by me).

"May 5, 2009

"A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him." John Maynard Keynes, 1931.

As the market works higher, bullish economists are falling victim to mass "brain washing." Every hint in the economy that "bad" is becoming "less bad" is leaped upon as "proof" that the worst has been seen and is past. Now bold predictions of a "rising second half of 2009" are heard. The worst crime that an analyst can commit is remaining bearish in the face of a rising market. Besides, aren't we in "a new bull market."
…

My opinion is that the economy is not fated to turn up towards the end of 2009 as widely predicted, nor will it turn up in 2010. I believe we are entering into the land of unintended consequences. We are now watching a deadly battle between deflation and over-creation of fiat money, meaning future inflation or even hyper-inflation. Making the picture even more confusing, there are increasing doubts about the viability of the US dollar and whether it can keep it reserve status.
…

Now, while everybody's fascinated by the stock market, I want to discuss a few other areas that you may not be looking at. The 30-year Treasury Bond…is very sensitive to the viability of the dollar and to inflation or deflation. The bond is in a steep decline, which means that long interest rates are moving higher (this is the last thing the Fed wants, but the Fed does not control long rates).
…

Right now, many central banks (and the IMF) are selling a portion of their gold, while other central banks (Russia, China) are buying gold. The IMF has announced that it wants to sell up to $100 billion of gold. Now why in the world would they announce their intention to sell gold unless they wanted to put pressure on gold? It doesn't matter because China is drooling to buy the whole lot, if only the IMF receives permission to place their gold on the market.

If you want to know what's happening in the world, then there's only one rule, and it's "follow the money." And in case you weren't aware of it -- gold is money.

The central banks system was invented and put in place in order to turn the power over to the world's bankers. Who controls a nation's money controls that nation. Gold is the public's defense against the bankers. Try as they might, the bankers can't control gold, which is why the bankers don't want gold in the hands of the public. Since the bankers can't keep gold out of the hands of the public, they do the next best thing -- they denounce gold and try to manipulate gold's price down.

The public has little or no knowledge of money. This ignorance extends to our Congressmen and women. Ask your Congressman or Senator where your dollars (Federal Reserve Notes) come from. The odds are that they can't tell you. Ask them how the Federal reserve was formed and when it was voted on by Congress. Ask them anything about money and the odds are that they will be clueless. Don't even bother to ask the average American the same questions because all you'll get is a blank look. Hey, even ask your local banker, and it'll be the same. Americans have no idea of money or where it comes from, which is why bankers can get away with "financial murder." In fact, ask Barack Obama about money and I guarantee you'll get a blank look. The Obama answer -- "Yeah, I know about money, you take it from the "rich" and give it to the other Americans. And if you have any money left over after taxes,"you give it to the bankers."

What could those clever Chinese be up to? While the other central banks are selling their gold, the Chinese are loading up on gold as fast as they can. Aw, what do the Chinese know. That's the big (and maybe) frightening question.…

This government will stop at nothing even including manipulation. What the Fed does not want is a swooning stock market, surging gold, or sinking bonds. I think all three are now being manipulated. Pressure from various sources continues on gold, and we know the Fed is buying bonds. When an item is manipulated, the aftermath always ends unpleasantly. I expect "unpleasantness" ahead.
...

Despite the usual manipulative efforts, the Dow closed down 16. Despite yesterday being a 90% upside day, the market failed to extend the rally. My impression is that the market is tired, and that the big money remains on the sidelines. The Dow has been up 8 out of the last 9 weeks, and the market could be ready to correct.Flash -- NYSE volume exploded to over 11 billion today -- The market is "churning," and the battle of bulls versus bears is raging.

"Change" You Can't Even See, Much Less Believe In

When Barack Obama exhorted his cabinet to cut 100 million dollars from their collective budgets, even the lovesick media snickered that it was not a very impressive cut given the size of the proposed Obama budget. Still, some did suggest that at least the proposed cuts "are a start."

Well, think again. View this short demonstration and you'll see that like so much of Obama's rhetoric the proposed cuts are much less than meets the eye.