Nov. 2, 2022

It's The White House versus The World

The United States historically has been a reluctant combatant, engaging in War only as a last resort. The country's first President, George Washington, admonished the nation to avoid "entangling alliances" and thereby avoid conflict.

Thomas Jefferson, the nation's second President, understood this admonishment as a way to keep this country out of foreign wars. He called it the Washington Doctrine, and in his inaugural address, he described it this way:

"peace, commerce, and honest friendship with all nations—entangling alliances with none."

We have at times been drawn into War and conflict in the nearly 250 years since, but only when first attacked by others. We have never sought to be the initial aggressor. Of the 45 Presidents who followed Washington, all have at least provided modest support to Washington's Peace First Policy.

That is until President 46, Joseph Robinette Biden Jr. This President and the current Administration is the most provocative in our history. Look at the current military deployments. In the President's second year in office, he has positioned troops and armaments worldwide. Not to promote peace but to aggressively confront perceived aggression from others.

Opposition to the Russian Federation's conflict with Ukraine has been the most visible of Biden's global confrontations. The Biden Administration has provided unlimited financial aid and military equipment to Ukraine. This support has been part of what most believe is a direct proxy war between the US and Russia.

At each turn in this half-year conflict, the President has sought to up the odds. Sending progressively more sophisticated military equipment and steadily increasing the overall military package, funds, and material.

Within the last couple of weeks, President Biden has taken one more ominous step toward confronting Russia directly. He deployed the Army's elite 101st Airborne Division to Romania. Just miles from the Ukraine Border and Odesa beyond.

The 101st is renowned for its ability to provide lightning-fast, lethal strikes at enemy targets. Russia must know that it has one of the premier military divisions locked and loaded and aimed right at Russia.

As if threatening one superpower is not enough, the Australian Broadcast Corporation reported that the President had ordered a B-52 Battle-group to be stationed permanently in Northern Australia.

Known as the Stratofortress, these massive bombers can carry 70,000 pounds of weapons and may include Nuclear Bombs. Each one of these great bombers is a country killer. And Australia will now have six of these aimed at the heart of China.

That's right, the base they will be working from in Australia is within easy range for America's most oversize bomber. From Australia, the B-52s will be able to cover much of the southern half of the Chinese continent, including Beijing. It is an unprecedented provocation.

The Chinese have been quick to react to this threat.

Zhao Lijian, a spokesman for the Chinese foreign ministry, said yesterday:

"The US's move escalates regional tensions, gravely undermines regional peace and stability, and may trigger an arms race in the region."

The B-52s present another unnecessary provocation in a part of the world that is not currently in conflict. But from the sound of all this, it could be soon.

This year, President Biden positioned the USS Ronald Reagan and its entire battle group offshore from the Korean Peninsula. The move was in response to the recent missile launches by North Korea. Missiles that, at this point, do not threaten the United States.

While we all recognize that North Korea may present a threat to our country, it's hard to see how sending a complete Carrier Battle-group into that region now will do anything but provoke a further escalation of tensions in the area.

So that's three significant provocations in just over six months. It's a remarkable record that indicates just how aggressive and confrontational this President and his Administration are.

In the history of America, we've never seen anything like it. And it shows how far this country has come from Washington's and Jefferson's advice to avoid these entanglements. Many years ago, their objective was for this country to live peacefully.

Today, we are left to wonder what Joe Biden's objective is.



Econ Briefs



At 2 pm eastern time this afternoon comes the moment that Wall Street has been anticipating for weeks: the announcement by the Federal Reserve of their latest interest rate decision. Analysts are nearly unanimous in their estimate that the Fed will raise rates by 75 basis points.

If so, that would indicate that the Fed is staying on course and believes inflation is the number one economic issue today. And they continue their fight against inflation. A consistent strategy is what markets anticipate, so I expect a minimal reaction from the financial markets if this is the case.

However, there are two other possibilities. First, the Fed may raise rates by more than 75 basis points. A month ago, most on the Street felt that the Fed would raise rates by 100 basis points today. It would indicate that they see inflation accelerating and must apply the monetary brakes even harder. If that does occur, we can expect markets to decline on that news.

And the other alternative would be for the fed to raise rates by less than 75 basis points. It would indicate that they feel the worst of inflation is over, and this would cause a massive rally.

But no matter what happens today, the Fed is missing the point. The actual cause of today's inflation is two exogenous events, neither of which the Fed can influence.

The first was the massive money printing during the so-called "stimulus" following the Covid-19 Pandemic. Unfortunately, that's history, and we can do nothing about that now.

And the second event has been this Administration's policy of cutting off energy supplies. It's a litany that we all know, eliminating the Keystone Pipeline, restricting federal land oil leases, boycotting Russian oil imports, and the list goes on. But the most significant move by the Administration has been President Biden's vow to do away with fossil fuels entirely.

Put that all together, and you have a severe reduction in energy supplies to the county and a dramatic hike in energy costs.

Provide additional supply, principally oil and gas, and inflation would fall like a rock. But that's a policy that this Administration refuses even to consider.

In earnings so far this morning, positive results from insulin maker Novo Nordisk and drug store CVS Health. In contrast, insurance company Humana and beauty company Estee Lauder are trading lower on their results.