Last night I watched President Obama deliver his State of the Union address to the nation.  The US is struggling to overcome a very deep recession that shows no signs from abating from an unemployment perspective.  The government solution to the recession is to borrow more and more money to juice the economy with government programs.  The objective is to return unemployment to politically acceptable levels and deliver the good life to all of their constituents. 

President Obama, the Congress and the Federal Reserve continue to substantially increase the money supply through issuance of debt as a means of solving our economic problem.  This is a trend that has been in place since the end of World War II.  It has been supported by both Republicans and Democrats over the years.  This solution path is not an issue between political parties.  It was born out to the entitlement attitude of Americans that developed after the US won World War II and liberated the rest of the world from the evil nations that were defeated.

After suffering through the Depression of the 1930s and winning the war, the US established itself as the only viable nation on the planet.  The US dollar became the world's reserve currency.  The US ruled the world from a military perspective and eventually faced down the Soviet Union, its only post war challenger for world leadership.  Following the war the rest of the world was either destroyed or undeveloped.  No one could compete with the US and its industrial machine that was fully intact.

During the years that followed the citizens of the US decided they deserved more and more of the good life.  Social Security was expanded.  Medicare and Medicaid were created and expanded.  When there was a recession the Federal Reserve simply created more money to finance the government's fiscal deficits.  In 1971 President Nixon closed the gold window and decoupled the US dollar from gold.  The US did not want the good life to be encumbered by the limits of having a hard currency.  During the past 40 years the finances of the US have gotten further and further out of control as the linkage of the US dollar to gold has become a distant memory.

During his speech President Obama blamed the Bush administration for the nations financial ills.  It is absolutely correct that the Bush administration was irresponsible from a fiscal management perspective.  However, much of our ills today were advanced by the Clinton administration.  During Clinton's two terms the world trade dramatically expanded due to the agreements made under the auspices of the World Trade Organization.  The combination of the new global trade agreements, advanced satellite and fiber optic communications networks that connected the world and advanced logistics systems (shipping, rail, trucks, etc.) that can move vast amounts of goods cost effectively gave developing nations a chance to complete worldwide with extremely low cost labor.  US unskilled and semi-skilled labor, both white and blue collar, in many manufacturing and service industries must now compete against work forces on the other side of the world willing to do the same work at a fraction of the cost of a US worker.

US politicians, especially Democrats, don't want to talk about the impact of the trade agreements of the reorganization of the the world's manufacturing industries that has occurred.  One can easily understand why free or freer trade is a good thing but there is no question that US based manufacturers were the big losers.  After WWII the US was the only provider of most of the the worlds manufactured goods.  Now the US must compete on against the lowest cost suppliers in the world.

US politicians have been unwilling to explain this story to the people.  They don't want to explain that the advantages that were gained in World War II are now gone.  They have been dissipated by various forms of consumption, including wasted military expenditures, wealth transfer to people that contribute nothing to the economy and gross amounts of unnecessary overhead in the government and the economy.  Our politicians want to debate details and hide the impact of their actions over the long term.  No one wants the big picture to be clearly explained to the people. 

The US has a national debt that it won't be able to finance in the years ahead without massive monetary inflation.  Monetary inflation is effectively a tax on everyone holding US currency and debt obligations.  It is a free ride for those in debt at the expense of the responsible people that saved and invested intelligently.  Since the US government has a significant percentage of its debt held by foreign interests it may not be possible for the US to inflate the problem away.  The rest of the world may call the question.  The global debate on the future of the US dollar as the world reserve currency has already begun. 

The US has about $6 Trillion dollars of unfunded Social Security liabilities and over $40 Trillion of unfunded Medicare liabilities.  There are billions and billions of dollars of other unfunded liabilities.  All of these programs, including poorly thought out  housing related programs, must be completed restructured.  The US government can't deliver on its promises to its citizens in today's world.  Decades of government promises must be broken in order for the US economy to properly reset itself to compete in today's world.  The President and Congressional leaders need to tell the people the truth and start the restructuring process that is required.

Some people believe that the only solution is to return to a gold standard.  A price range of $2,500 to $5,000 an ounce will be required to back all of the US debt with physical gold owned by the government.  The current  gold market price is just under $1,100 per ounce.  When Nixon closed the gold window the official price of gold was $35 per ounce.  The massive difference in prices is an indicator of the gross level of fiscal mismanagement that has occurred over the past 40 years.

The good life the US earned during World War II has come to an end.  We have a truly global economy.  We must compete in every market segment for goods and services.  Unskilled and semiskilled labor have limited value in the global economy.  The government promises of past decades are no longer relevant.  There is no free lunch.  Everything must be earned through hard work by the current and future generations of US citizens.

I believe most of the US population fundamentally understands the problem at a personal gut level.  They are looking for leaders that will be honest with them and tell them the truth.  Once the US acknowledges the truth we can get serious about changing direction and setting a course for greater success in the future.

Will our political leaders have the guts to be honest with the people and tell them the truth?  I haven't seen or heard of anyone that understands the issues and is willing to tell the people the straight scoop.  It is more likely that the rest of the world will simply dictate the terms that want to satisfy our debts.  Don't be surprised if much of the gold we currently hold is shipped to foreign governments to settle the US debt obligations at some point in the next few years.

TPM

I have just written a new article entitled "In Fed We Trust" that is now posted on thepurplemuse.com.  I wrote the article after reading the "In Fed We Trust - Ben Bernanke's War on the Great Panic" by David Wessel of the Wall Street Journal.  Mr. Wessel has written an excellent book that provides a comprehensive history and analysis of the the financial system breakdown beginning in 2007 through mid- 2009.   Mr. Wessel clearly demonstrates that Ben Bernanke will do "Whatever It Takes" to keep the key US financial players functioning at any cost to the citizens of the US.

In my article I provide my own perspectives of the key players and the role of many branches of the US government in the development and management of the Great Panic.   There is no reason to believe that the US has the right people in place to solve the problems on a long term basis.

Check out "In Fed We Trust", both the book and my article.

TPM

The medical media reports from Haiti are very tough.  The quantity of food, water and medical supplies being delivered to the population is not sufficient.  The people that are most at risk are not getting what they need to survive.  The number of deaths that are directly and indirectly associated with the earthquakes may exceed 10 percent of the 3 million people that inhabit Haiti. 

It does not appear that money to purchase supplies is the issue.  The problem is the horrible infrastructure that existed prior to the earthquakes that is now destroyed.  The communications and logistics infrastructure needed to support the full extent of the relief operations simply doesn't exist and people are dieing as a result.  Many dedicated people are doing everything they can do to save the Haitian people.  Unfortunately, many more people will die before the situation can be stabilized and the basic life sustaining needs of the people supplied.  This situation is extremely unfortunate and will be horrible to observe through the eyes of the media.

The Haitian people are living in Hell and there is nothing anyone can do to solve the problem quickly.  Hopefully, the survivors will rebuild a new Haiti with help of the US and the rest of the world  that can provide new opportunities in the years ahead.

TPM

The media is reporting that France and Venezuela are complaining that the US has taken over Haiti.  The US government is bending over backward to let the Haitian government and UN do as much as they can do from a leadership perspective, which is very little.

The USAF has turned a broken down airport that was non-functional into a 100 operations per day air transport and logistics center in few days.  What other nation could make this happen so quickly?  The doctors on the Carl Vinson aircraft carrier are saving lives of Haitians in a true hospital facility.  US military leaders on site have organized the overall relief effort to give it a chance of working.  More US help is on the way!

There is no doubt that the relief effort has not reached all of those that must be helped.  Haiti was a disaster before the earthquake and now it is in shambles. 

The government of France needs to coordinate its relief efforts with the US leaders on site and make a contribution to the effort.  Hugo Chavez, President of Venezuela, needs to explain to his people why their currency was devalued a short time ago and explain how he is going to fix the economy his policies have destroyed.

In the end the US military will need to take over Haiti for an extended period if the people are going to have any chance in the future.  At some future time the US can give political control back to the people of Haiti in a democratic process.  This is the price that must be paid for Haiti to be restored to a functioning nation.  Is that the goal or is the goal to leave Haiti as a cesspool in the Caribbean?

If another nation can deliver the leadership, management skills, equipment, supplies and can do attitude that is necessary to save Haiti, let them volunteer to take over.   In the meantime, everyone should cooperate with the US or stay home.

TPM 

We have all seen the horrible TV broadcasts from Haiti during the past few days.  The earthquakes have decimated a backwater nation with limited resources, a limited infrastructure and a government that was limited in capability before the earthquakes that can no longer function at all.

I watched Hilliary Clinton, US Secretary of State, comment after her visit to Haiti and meeting with Haiti's President today.  I listed to her commit US support to follow the lead of Haiti's government and the UN in the relief effort.  I was disheartened as I listened to what I believe will be a death sentences for thousands of Haitians that will not be well served by their domestic leaders and the UN.  I am extremely proud of the incredible response by the US military, the Urban Search and Rescue teams from all over the US and charitable organizations.  It was inspiring to the the hospital ship COMFORT depart for Haiti from Baltimore earlier today.  It was also great to see aircraft bringing relief supplies and search and rescue teams from all over the world.

But all of these good actions are addressing only the tip of the iceberg.  The really bad news has not even begun to be addressed yet.  The really bad things will happen with the further deterioration of Haitian society when the people realize they no longer have a functioning society.  We will see a renewal of Haitian boat people trying to come to the US.  Haitian society will be completely lawless. 

We need to understand that Haiti's main sea port is essentially destroyed.  There is no way to bring in massive amounts of supplies and materials that will be needed to sustain life and rebuild the country so it can support the current population.  There are very few habitable buildings that are usable in the capitol city.   A new city must be created in an area that is equivalent to a bombed out city of two million in a war zone. 

There in only one organization in the world that has the expertise and resources to deal with all of the Haiti issues, save as many people as possible and provide the necessary security. That organization is the US Armed Forces.  The US needs to arrange to take over control of Haiti from the Haitian government and create a US military command structure to run the country.  We need the Sea-bees to rebuild a functioning port.  We need the US Corp of Engineers to take over the redevelopment of Haiti's infrastructure.  We need the military to lead a multinational security force to keep the peace.  Only the US can make the whole process work.  We want worldwide participation in the process and funding, but the US must take command.  If we don't take over Haiti tens of thousands of Haitians are likely to die in the streets or attempting to escape the disaster in boats to Florida.

We might as well step up to the task now.  The longer we wait the worse the situation will get and eventually we will have to take over.  If we don't spend the money in Haiti we will have tens of thousands of refugees to deal with in the US in the years ahead.  This disaster is going to cost the US billions of dollars no matter which way we proceed.  We might as well rebuild Haiti and keep the Haitians in their own country.

I hope President Obama steps forward and takes command of the situation.  This is a time for decisive leadership.  Time is of the essence.  Many in the world won't like the outcome.  It doesn't matter as long as the decision results in saving the lives of tens of thousands of people.  Can President Obama step up and show the world that he can make the big decision when lives are on the line?

TPM

It is very interesting to observe the media debate the proper handling of the Nigerian Al-Qaeda terrorist that tried to blow-up a Northwest Airlines flight on Christmas.  This is a continuation of the discussion concerning the destiny of the group of terrorists being held at Guantanamo Bay, Cuba.

It appears that some of our liberal friends want to provide a full set of legal services to the terrorists and treat them like US citizens that are accused of criminal activity.  The Liberals contend that the terrorists have "Rights" that must be observed in the US legal process.  Many contend that the rules of the Geneva Convention apply to terrorists in civilian clothing.

The only "Rights" terrorists have is the right to be killed in action by those that are defending our nation.  Terrorists that are executing attacks or are planning attacks, operating without a uniform identifying them as members of a national military force and conducting their activity among the civilian population should be killed as expeditiously as possible.  There can be no mercy for terrorists.  Terrorists have crossed the line of human behavior where there is no return.  There is no rehabilitation. 

If terrorists are fortunate enough to be captured they should be tried by military courts as enemy combatants and their appropriate fate determined.  I really don't see why interrogation techniques should be restricted for those individuals that are absolutely proven to be terrorists.  Why should we treat the most evil people in the world humanely? 

If our enemies are wearing an appropriate military uniform and are captured the rules of the Geneva convention should be applied to their treatment.  If a US citizen engages in terrorist activity the citizen should be prosecuted in accordance with US law and receive all their rights as a citizen.

Our political leadership must understand that we are fighting a war of ideology against an enemy that has no standards for human behavior.  We must eliminate the enemy.  We can't contain the enemy.  We can't negotiate with the enemy.  We must fully eliminate the terrorists in order to win the war that must be won.

Our nation must acknowledge the reality of the War on Terror and fully engage the enemy.  The strategy and tactics of fighting the War on Terror are a different discussion. 

Terrorists have no rights.

TPM

I started thepurplemuse.com in late 2006 with the belief that I was effectively retired from my satellite communications  industry operating career and would have a substantial amount of time to dedicate to building and promoting the site.  However, in early 2007 I received an opportunity to restart my career in the industry that I love.  I could not turn down one last chance to attempt to build a new business and work with some great people in the satellite communications industry.  I knew the opportunity was a high risk situation when I took the job, but I felt the potential reward was worth the risk.  Since early 2007 I have developed the site to some degree but I have not promoted it the way I had originally planned.  I didn't believe it was appropriate to fully engage the battles that I think need to be fought while I was working in a corporate environment.

Almost three years have passed since I went back to work full time in early 2007.  The situation has not turned out the way I had hoped due to events beyond my control, but that is life in the high risk satellite communications industry.  I will be leaving the company very soon and returning to the path I had planned in late 2006 and early 2007.  I am going Back To The Future.  It is time to fully engage in the battles that must be won to put our nation back on a reasonable course for the future.

I can't say that my career in the satellite communications industry is completely over at this point.  It is possible that I may be doing some consulting and there is always a remote possibility that a company might need and want a very experienced executive to help them progress forward.  I would never rule out any possibility but I think that it is unlikely that I will come back again.

During 2010 I plan to work hard to make thepurplemuse.com visible in many different media outlets and be at the center of the debate on the key issues of today.  We must work together to right the wrongs of the past and the present.  We need to get our country working on a path that makes sense at all levels.  We need to get our collective financial house in order.  We need to find the common, PURPLE, ground that the vast majority of us can support and push the extremists on both sides out of the decision making process.

We are on our way Back To The Future. I expect a very interesting 2010.  Always protect yourself and your family from a US government that has been and is currently out of control.  Hopefully, we can effect some positive change by working together.

TPM