Playing the Blame Game

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	Saturday, May 5, 2008
	Insulting Drunken Sailors By Andy Carpenter If you ever wanted to know how a lame duck President runs out the clock, this week offered you a great example. Now 88 months into his 96-month term, President Bush decided it was time to assign blame for the US’s current economic woes. He said that fault for the US’s economic morass belongs to opposition party Democrats. Apparently, President Bush feels they’ve undone in 16 months the stirring economic policies his Republican brethren crafted while they controlled congress during his term’s first six years. And, yes, there is plenty of blame to go around. After all, both parties totally whiffed on the benefits of the economic stimulus plan that was to be the war in Iraq. All that’s done so far is run up a tab that has easily eclipsed a half-trillion dollars, as well as inflict catastrophic costs on the lives of US military and Iraqi families. As far as the economic stimulus part goes, I suppose a case can be made that the war has been very good for the corporations that supply the 30,000 well-armed mercenaries, whoops, I mean private security forces that now work in Iraq. Their war-zone salaries alone cost the US about $6 billion a year. Still, as the President tries to convince us that, in less than a year and a half, those crazy tax-and-spend Democrats have wrecked a thriving US economy, it should be noted that during the GOP’s six-year run as the majority on the Hill, Bush vetoed just one (sort of) spending bill. It was a bill that would have lifted the federal ban on funding embryonic stem cell research. But, that was it… one veto in six years. But, since the Democrats gained their destructive congressional majority, Bush has tripled his veto output. Last October he vetoed a bipartisan bill that would have expanded children’s health insurance. He said that the $30 billion extra (spread out over five years) that Congress added to the plan was too expensive. He only wanted to bump the plan’s budget by $5 billion. Under the Democrat’s venal economic watch, Bush also vetoed a bill that would have limited the CIA’s use of “harsh” interrogation techniques. And, he nixed a $124 billion war-funding bill… but not because it was too expensive. He killed that bill because it would have set target dates for troop withdrawals from Iraq. That’s it. Pash Da Boddle Other than that, be it six years of GOP spending or 16 months of Democrats signing checks, President Bush’s attitude can only really be described as “whatever.” By the way, I stole that “whatever” from Eugene Robinson, who writes for The Washington Post. While I’m at it, I am going to purloin a great Robinson line. Back in October he wrote, “To say that George W. Bush spends money like a drunken sailor is to insult every gin-soaked patron of every dockside dive in every dubious port of call.” So, the president is trying to defend and deflect. That is a very “presidential” thing to do. Maybe he’s finally growing into the job. But, to accept no blame for the US economy’s current state is also a very Karl Rovian thing, as well. If Elected I’ll Serve Now, I am not so arrogant to think that I could have done an overall better job as president during the past seven years and four months. But, I think I might have done a better job understanding the issues… or at least being more up front with Americans about the effect my stances would have on them. For, my biggest disagreement with the current president is about his weak dollar policy. It’s a policy that has honked me off for years. In fact, as your president I would have promised not to engage in monetary policy before I had at least consulted the experts at the Federal Reserve Bank. Between naps, golf and visits to the White House wine cellar (okay, and long lunches with Scarlett Johansson and Sheryl Crow) I would have begun my monetary research online, say at a Fed website. Here’s part of what I could have found. It’s from the Chicago Fed. “Strong is good. Weak is bad. These generalizations sound simple enough, but they can be confusing when talking about money. Is a ‘strong’ US dollar always good? Is a ‘weak’ dollar always bad? This publication explores how the US dollar and foreign currencies affect each other and how their interaction affects you and the economy.” Understanding Foreign Exchange “Rising and falling, strengthening and weakening all indicate a relative change in position from a previous level. When the dollar is ‘strengthening,’ its value is rising in relation to one or more other currencies. A strong dollar will buy more units of a foreign currency than previously. “One result of a stronger dollar is that the prices of foreign goods and services drop for U.S. consumers. This may allow Americans to take the long-postponed vacation to another country, or buy a foreign car that used to be too expensive. “US consumers benefit from a strong dollar, but U.S. exporters are hurt. A strong dollar means that it takes more of a foreign currency to buy US dollars. US goods and services become more expensive for foreign consumers who, as a result, tend to buy fewer US products. Because it takes more of a foreign currency to purchase strong dollars, products priced in dollars are more expensive when sold overseas. Strengthening Dollar Advantages Consumer sees lower prices on foreign products/services. Lower prices on foreign products/services help keep inflation low. US consumers benefit when they travel to foreign countries. US investors can purchase foreign stocks/bonds at "lower" prices. Disadvantages US firms find it harder to compete in foreign markets. US firms must compete with lower priced foreign goods. Foreign tourists find it more expensive to visit US More difficult for foreign investors to provide capital to U.S. in times of heavy U.S. borrowing. Weakening Dollar Advantages US firms find it easier to sell goods in foreign markets. US firms find less competitive pressure to keep prices low. More foreign tourists can afford to visit the US US capital markets become more attractive to foreign investors. Disadvantages Consumers face higher prices on foreign products/services. Higher prices on foreign products contribute to higher cost-of-living. US consumers find traveling abroad more costly. Harder for US firms and investors to expand into foreign markets. “A weak dollar also hurts some people and benefits others. When the value of the dollar falls or weakens in relation to another currency, prices of goods and services from that country rise for US consumers. “It takes more dollars to purchase the same amount of foreign currency to buy goods and services. That means US consumers and US companies that import products have reduced purchasing power. “At the same time, a weak dollar means prices for US products fall in foreign markets, benefiting US exporters and foreign consumers. With a weak dollar, it takes fewer units of foreign currency to buy the right amount of dollars to purchase US goods. As a result, consumers in other countries can buy US products with less money. It’s me again. So, as your president – the one who engages you in frank talk I would have had to tell you this. “Look, I am for a weak dollar because it benefits US corporations way more than it benefits you. That means you have to be fully invested in exactly the right US companies, which will benefit from my weak-dollar policy. It’s the only way you can offset how you’re going to get screwed every time you go shopping. “But I am going to make sure that credit will be really easy for you to get. Your homes will skyrocket in value. You can keep paying off your bills because it will be easy to refinance your homes. This easy-credit trend is one I am sure will last indefinitely so don’t worry.” “Oh yeah, if things go wrong, I’ll man up and take the blame. Because, I am the boss – the decider – and this was my decision.” My guess is that as president you may have done things differently, but I also believe that your life experiences would have meant you would have taken responsibility for your actions – because that’s what adults in the real world do. That’ll do it for this week. I’ve got another of your opinion pieces posted below. Have a great weekend. Lock and load. Andy P.S.  To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. INTERNAL ENDORSEMENT  Just this Once BELIEVE THE HYPE!  It was the email that shocked the investment world. One noted investment authority told his readers to take seven huge stock market gains on one day… SEVEN HUGE WINNERS on one day that ranged from 526% to 102%... seven, and on stocks… not options. But that was just the beginning! It now looks to be setting up to happen again this year, too. That’s why you must check out the whole story right here. The Hand That Rocks The Fed The FED has an international club of fanatics in Latin American countries that believe that all the answers for any kind of crisis are in the U.S. FED’s hands. One member of this club is El Salvador – the smallest country in the American continents.  On the world map it is to the south from the U.S,  no, no… that´s Mexico keep looking down… no, no, that´s Guatemala… to your right… yes, that´s it… can you see us? No? Okay, here’s a magnifying glass. El Salvador may be the smallest country in the Americas and believe it or not, we are the only country in the Americas that supports the US government in its Iraq war. El Salvador has the “incredible” force of 380 men on the ground, so not only your guys are fighting for the liberty and interests of the US but our guys are too. That is why my good friend Mr. George Bush gave us the little help of $431 millions for social projects here in El Salvador.  What, did you think there was a free lunch? The only thing that I hope does not happen is that our military presence there finishes like in the movie “300 Spartans”. Okay, this brings me to the economy theme, and thanks to Andy Carpenter for this opportunity to write about it. I want to touch the international collateral effect of the US financial crisis and FED decisions on the peripheral economies as my country is, with the US-dollar like national currency. You see, since 2001 we adopted the US-dollar like national currency with the idea to open El Salvador to the international markets and free trades trends. In this sense, in 2006 we signed a free trade covenant with the US to have access to your markets, because the US is our principal commercial partner in the Americas. At that moment, the subprime crisis was not so relevant, but when it became relevant, El Salvador was affected, not only for the high price of oil, but for our immigrant labor force. The prices of the goods here have turned so high since 2007. Would you like to pay $4.00 for a pound of beans? Welcome to El Salvador! Right now in the US there are about two million Salvadorians and they work in areas like construction and services. I won´t touch the theme of whether they are legal or illegal. I know that Andy or someone else will take again the point about the economic impact of the immigrants for the US economy. My point is the FED politics to handle the financial crisis is affecting other economies in the Americas. And that your recession stage is an inflation stage on our side, because when you’re raise or lower your interests rate or the FED injects money to your markets, or saves entities like Bear Stearns, the effects of the market effects our economy in El Salvador. It represents more costs to import products, and nothing to export, although, with free trade this is not necessarily have to be a problem. But it happens. Oh, did I forget to mention, our government is a fanatic member of the FED´s club? Well, the message here is: “Okay, okay, nobody has to worry, we have the US dollar by our side everything will be ok soon, this financial turbulence out there will not affect us, remember:  ‘we trust in God’, and God saves America (This includes El Salvador!).” In that big picture that you have been talking about, Andy... we are in the left side! I like to read the IDE´s articles and thanks to God that there exists people like Andy Carpenter, Craig Ferguson and his “effect”…and other friends that I have not met yet. That is why I agree with an article I read that began: “Dear Ben: Here´s how to save the U.S economy.” I would add: "And the others countries too.  "It was a shame that article did not appear in Spanish for all countries with US dollar economies (El Salvador, Panama and Ecuador). Well, maybe Ben Bernanke won´t say it, but I will, “Andy you got a point,” a very damn good point!!. Thank you so much for this opportunity. Jamie Sarbelio El Salvador, Central America Subscribers to Andy Carpenter’s Asia Business & Investing newsletter banked stock gains (not options) of 562%, 300%, 383% 197% 149% 123% and 102% on July 7, 2007. They are currently sitting on these staggering gains…  as of April 11, 649%, 319%, 179%, 77%, 196% 100%, 126%, 185% and 430%. That’s just a harbinger of the future. Find out more here. To unsubscribe, Click here To change your email address, Click here To cancel or for any other subscription issues, write us at: Investor's Daily Edge 245 NE 4th Ave, Suite 201 Delray Beach, Fl 33483 Phone: (800) 681-4759

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