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The Danger of Financial Meltdown

The United States Congress over every administration since about 1980 has been spending more that the Federal Government takes in. The resulting Federal debt has looked like a ski slope since that time. The most recent congresses, though, have made previous administrations look like pikers.

Richard Fisher, President & CEO of the Federal Reserve Bank in Dallas recently told a conference of Society of American Business Editors and Writers that the situation for the US economy is precarious. . Excerpts from his comments: “This will be a titanic struggle. Our Congress must find a way to align spending with income through taxation that (a) does not cut off the incipient economic recovery, (b) provides a credible path toward bringing their accounts-including the unfunded liabilities of Medicare and Social Security – to solvency and (c) respects the fact that in a globalized, cyber-ized world, those with the ability to create jobs may create them in places that offer more compelling fiscal and regulatory environments.

This last point is not unimportant. Permanent jobs are created by the private sector. Businesses, large and small, publicly or privately held, have a duty to earn a return on investment for their shareholders. In a globalized, cyber-ized world, they need not invest or expand their payrolls in the United States; they are free to go practically anywhere on the planet. Now, those with the power to levy taxes and direct spending must get with it and adjust to the new world as they seek to incentivize job creation through businesses that, thanks to monetary policy, now have the financial means to put Americans back to work right here at home.”

In his June 2011 speech on withdrawing troops from Afghanistan, President Obama stated that it is time to turn our attention to nation-building at home.” I think he is absolutely right about that. As a guy who has spent much of his time over the last decade rebuilding businesses and economies in Iraq and Afghanistan, I have often wondered whether I would someday find myself deployed again – but this time to Detroit. It certainly seems that if things continue on this incredibly self-destructive path, the economy of the United States, and therefore the world economy, is in great peril.

Fisher goes on to refer to our current course as a “death spiral”: “There cannot be robust direct investment in the United States without confidence in the nation’s ability to reverse its budgetary death spiral, especially the inexorable accumulation of national debt and unfunded liabilities of Medicare and Social Security. Getting our fiscal house in order will not be an easy task. But there are worse alternatives. Resorting to protectionism or capital controls or sustained negative real interest rates or inflation, in lieu of real fiscal reform, would be pyrrhic solutions. Corrupting the independence of the Fed would surely lead the nation to the same fate that befell Weimar Germany and Peron’s Argentina when their central banks took to monetizing debt. The nation cannot, must not, and, in my view, will not go down those sordid paths. Indeed, I sense we have turned the corner and are on the road to fiscal redemption, however bumpy it might be.” I certainly hope that last sentence is accurate, but I am not as hopeful as Mr. Fisher. It has been a long, long time since Congressmen and their Presidents have acted with fiscal responsibility. I think the odds of that happening with the required speed and efficacies are slim. The lure of simply printing more money in order to support more spending, basing that monetary base expansion on public debt, (much of which is now held by foreign governments including China and Russia), has proven too powerful a force to resist over the last few decades.

Based on the 2010 U.S. budget, total national debt will nearly double in dollar terms between 2008 and 2015 and will grow to nearly 100% of GDP, versus a level of approximately 80% in early 2009. The Government Accounting Office, the US Treasury Department, and Congressional Budget Office have all stated that the U.S. is on an unsustainable fiscal path. As the debt ratio increases, the exchange value of the dollar may fall. Paying back debt with cheaper currency could cause investors (including other governments) to demand higher interest rates if they anticipate further dollar depreciation. Paying higher interest rates could slow domestic U.S. growth. Making the situation worse, a high public debt- to-GDP ratio slows economic growth. Economists Carmen Reinhart and Kenneth Rogoff calculated that countries with public debt exceeding 90 percent of GDP grow by an average of 1.3 percentage points per year slower than less debt-ridden countries. The public debt-to-GDP ratio in March 2010 was about 60 percent of GDP. At that time the CBO projected that it will reach 90 percent around 2020 under policies in place. As growth slows, all of the economic challenges the U.S. faces will be exacerbated.

Since about 1980, the Federal Government has continued to levy more taxes, spend more money, and even beyond that, borrow money to spend, resulting in multi-trillion dollar Federal debt that will fall on the shoulders of our children and grandchildren. Our Federal debt level as of this writing is $14,358,442,243,737.99, or $46,200 per American citizen. ( So if you are part of a family of 4, your family is currently indebted for $185,000 over and above your current tax burden. And at this point, there is no end in sight. Overall, I believe that the risk of US financial collapse resulting from the crushing burden of Federal debt and general fiscal malfeasance on the part of the United States Congress is medium to high. And the results of such a collapse are almost unthinkable. If unchecked, I believe the results of the current path could prove catastrophic by 2030.

What do you think?

The Threat of Islamic Extremism & Shariah Law in America

The probability of an Islamic movement obtaining critical mass in the United States, and with it introducing Shariah Law, is not at all remote.

US lawmakers have already demonstrated that they desire to place the Quran in a superior position to the Bible. President Obama, Secretary of State Clinton, and even General Petraeus are all on video record referring to the Quran as the “Holy Quran”; have you ever heard any of them refer to the Bible as the “Holy Bible”? Special instructions have been issued by the US Department of Defense related to the handling of the Quran at Guantanamo Bay, directing US forces to handle it with the right hand, and to treat it “as though it was a fragile piece of art.”

Although President Obama, President George W. Bush, and others have described Islam as a peaceful and tolerant religion, US forces are specifically prohibited from proselytizing or trying to introduce Christianity in countries like Iraq and Afghanistan. In fact, US forces have actually burned Bibles that were translated into Pashtu and Dari and sent to a US serviceman serving in Afghanistan. The burning of a Quran in Florida set off widespread acts of violence in Afghanistan, yet no violent outbreak occurred when the US Government burned the stacks of Bibles. We certainly don’t see Christian suicide bombers walking into mosques in the United States.

Islam is also growing faster than any other religion in the world, and faster than any other religion in the United States.

“Christian and Muslim sources assert that Islam is the fastest growing religion in the United States. The Yearbook of American and Canadian Churches 2000 gives the figure of 3,950,000 Muslims in America today. Islamic Horizons states that there are eight to ten million Muslims in North America. The most common figure cited (the statistic the United States government regularly uses) is about six million. The largest concentrations of Muslims are in California, New York, and Illinois — with an estimated 400,000 in the Chicago area. While specific figures may be debated, what cannot be debated is the phenomenal growth of Islam.

According to United Nations statistics, the Muslim population in the United States grew by 25 percent between 1989 and 1998. In 1990 there were only about 50 Islamic schools in America. Today the number is over 200. Since about 1990 the number of ‘registered Islamic centers and mosques’ has tripled to ‘more than 2,500.’ Just how is the Muslim population growing? The growth rate of Islam in Western nations (including the US and Canada) primarily comes through: a high Muslim birth rate and immigration (e.g., Muslims moving to the United States), not from converts (non-Muslims becoming Muslims).”

Does the growth of Islam in America necessarily translate into an increased likelihood of Shariah Law, or violence? According to a recent article in Investor’s Business Daily:

“A survey of 100 randomly selected mosques in America finds 81% of them feature Islamic literature — not including the Quran and Sunnah – that advocates violence. And 85% of the imams running the mosques actively recommend these tracts. Only 19% of the mosques do not disseminate Islamic materials sanctioning jihadi violence, according to the peer-reviewed data collected by two scholars sponsored by the Washington-based Center for Security Policy.

If accurate, this turns everything we’ve been told by Washington on its head. Despite pleasant platitudes to the contrary, the majority of mosques are not preaching interfaith tolerance and assimilation. While some do, they are the exception – the fringe. It’s the mainstream mosques that are actually radical. Fully four of every five, in fact, may be potential hotbeds for terrorist activity. And the overwhelming majority adhere, at least in their worship rituals, to Shariah law — the strict Islamic legal code practiced in Saudi Arabia. The survey found, for example, that most American Muslim women are forced to pray separately from men and cover themselves with scarves and veils.”

Another quote from the article:

“A popular tract distributed in U.S. mosques is “Milestones” by Sayyid Qutb, the man who inspired Osama bin Laden. If anyone restricts others from accepting Islam, Qutb exhorts Muslims, “then it is the duty of Islam to fight him until either he is killed or until he declares his submission. What’s stunning is that this tract is categorized by the authors – whose study is published in the latest issue of “The Middle East Quarterly” – among the featured Islamic literature advocating “moderate” violence. And that grouping is in the minority. More than half the mosque tracts surveyed exhort Muslims to commit “severe” acts of violence.”

Would this kind of violence represent a substantive threat to US national security? Widespread rioting in France in 2005 seems to indicate that it would. BBC News reported the following in October 2005:

“As the country celebrates the centenary of the separation of Church and State, Islam is seen as the biggest challenge to the country’s secular model in the past 100 years. The worldwide rise of Islamic militancy strikes fear in the heart of a country that is home to Western Europe’s biggest Muslim community. French police know that there is no shortage of potential jihadis in the country. The assertiveness of French Islam is seen as a threat not just to the values of the republic, but to its very security.”

This news article goes on to say: “All observers agree that jihadism does pose a direct threat to the country. The fact that – in France as elsewhere – the militants speak for a tiny minority of Muslims does not make the threat less severe.”

Several factors would heighten the likelihood that the threat of Islamic violence impacting he strength and perhaps even the existence of our current form of government in the United States would move from a potential threat to a kinetic one, including:

  1. The population of Muslims in America reaching critical mass. (In France, about 8% of the population was comprised of Muslims when the rioting began. Most recent estimates indicate that about 2.5% of the US population is currently Muslim.) Based on current growth rates, I would estimate that within 10 years the United States will have a Muslim population at or exceeding 8%.
  2. Violent anti-Christian and anti-Jew propaganda continues to be instilled in Muslim youth in mosques across America, and among young Muslims who will eventually immigrate to America. (Quoting the Investors Business Daily article: “Despite overwhelming evidence that many mosques operate as hubs for terrorism, none has been shut down. And more are being built without any investigation into their sources of funding or leadership.”)
  3. A large number of Muslims – through voluntary or involuntary actions – occupy enclaves that are basically entire communities of Muslims, essentially segregated from the rest of America, and resulting in isolation and alienation among the Muslim communities. (While there are Muslim dominated urban areas located in areas like Dearborn, Michigan, in the United States today 45 percent of immigrant Muslims report annual household income levels of $50,000 or higher. This compares to the national average of 44 percent. Immigrant Muslims are well represented among higher-income earners, with 19 percent claiming annual household incomes of $100,000 or higher (compared to 16 percent for the Muslim population as a whole and 17 percent for the U.S. average).
  4. Dissatisfaction and jealousy among the Islamic population rises among the Muslims residing in poor communities as it did in France between 2005 and 2005, and/or wealthier Muslims coalesce around a very Islam-centric agenda, and successfully implement changes that are unacceptable to the rest of the American citizenry. (For example, Islam is adopted as the official religion of the United States of America, essentially destroying the first amendment to the US Constitution.)
  5. A trigger event occurs, galvanizing dissatisfied Muslims into a relatively cohesive group that rallies around a common enemy – the non-Muslim population of the United States – and sparks the first outbreak of violence. (In France this trigger event involved the death of two Muslim youths while they were fleeing from the Police.) Alternatively, the example related to establishing Islam as the official religion of the United States, as described in point #4 above would be a likely “lighting of the fuse.”

My overall assessment: The threat to US national security from a growing population of Muslims in America with a large percentage of Muslim youth indoctrinated in violent anti-Christian and anti-Jew teachings is high. The threat is mitigated somewhat by the fact that a large percentage of Muslim immigrants are educated and relatively high earners. However, that same comparatively high earnings rate enables funding to continue to be devoted to the mosques and instructors who are doing the indoctrination. This represents a significant risk.

What do you think?

Seven Threats to the National Security and Continuity of the United States of America

There are at least seven real threats to the national security and continuity of the United States of America that are not widely recognized. In a series of 6 articles over the next 6 weeks, I will describe each of them, explaining why they are a threat, and the likelihood that as each of them grows in severity, it could become a force that destroys our current US Governing structure, and our economy.

The first threat is the growth of violent radical Islamic fundamentalism inside US borders. The current explosion in private Muslim schools inside the United States, the vast majority of which are teaching from texts that advocate violence against non-Muslims, presents an ominous picture of what lays ahead against the backdrop of activities undertaken by the US since 9/11.

The second threat is financial meltdown of the US economy, which is already staggering badly under the crushing burden of Federal debt and malfeasance by our legislators and other Federal leaders. Such a catastrophe would send the entire world economy into a wild tailspin.

Threat #3 is the rescinding of critical rights currently enjoyed by America as elements in our Bill of Rights. With the current pressure on civilian rights resulting from the need for stronger Homeland Security and the Federal Government taking over everything from the big auto companies to health care, America is on her way to serious problems.

The fourth threat is – believe it or not – a shortage of clean, drinkable water – which of course would translate rapidly into a shortage of food. The pace at which America is encountering water shortages across the continental United States would probably surprise you, and the fact is that no one really knows how much water exists in our natural underground supply.

Threat #5 is that the United States Government could be drawn into another unpopular war – like a war with Libya, or far worse – which is then supported by a Selective Service draft. The anti-war protests of the 1960s would pale in comparison to the havoc that could be wreaked with modern technology. Where violence was relatively infrequent in the 60s, there were groups like the Weathermen involved who were willing to employ bombings, stone throwing, and other violent tactics. Enormous technical know-how is available on the web today. The materials and technology used to produce improvised explosive devices (IEDs) are readily available. We now have ubiquitous communication / coordination capabilities offered by the world wide web. If violent extremists who are willing to use bombs to rail against the Government (e.g. William Ayers) equip themselves with all of those tools, the situation could get very ugly in very short order.

The sixth article in the series pertains to the threat posed by Federal, State, and local seizure of private property by law enforcement agencies. The scope and frequency of this activity that occurs today is absolutely frightening, and recognized by very few of us. The real question is how much can be taken away from us before we rebel as a nation? The answer might surprise you.

The seventh and final article in the series pertains to the threat of cyber attacks (computer and telecommunications based attacks) launched against the United States by our traditional enemies (Russia, China, Iran, etc.) or by terrorist organizations. These attacks are occurring with increasing frequency and sophistication, and many of the potential targets – such as US power grids – have little or no real protection. They are now being described by senior level US intelligence and defense officials as the most likely source the “the next Pearl Harbor”.

Shown below are a couple of charts that reflect the relative likelihood of each of these threats resulting in a catastrophic, debilitating result for the United States of America. But to understand them, you must read the individual articles to follow. As I investigated the things that pose the greatest threat to our nation, one thing became clear to me. As individual citizens, we often do not respond to threats, dangers, and injustices until they affect us personally. Most people are uncaring and unwilling to risk their own safety and their personal fortunes on behalf of others. Further, even when the Government comes in and seizes personal property or even private homes unjustly, it does not stir surrounding communities to band together and stop these actions from continuing. It seems that we will allow almost any action on the part of Government – local, state, or federal – and do little or nothing. After reviewing each of these scenarios, the pattern that is revealed to me is that we will allow anything and everything to be taken from us except our families. I believe that almost everyone would stand up and resist if people came knocking at the door to take away their children. But short of that, looking at what is occurring in America today with increasing frequency and scope, a frightening image is emerging. As Abraham Lincoln observed, this country – still the greatest country on Earth – can only be destroyed from within. I am no conspiracy theorist, but it seems clear to me after looking at the facts that the seeds of that destruction have been planted.

I hope you will take the time to read this series of articles, and as always, I would love to receive your feedback!





Do You Want a 1,000-Year Life Span? The Promise and Perils of Transhumanism

There is a movement afoot, based substantially in Silicon Valley but now taking root around the world, called Transhumanism. Transhumanism purports that illness, social maladies such as a propensity for criminal behavior, aging, and even death are avoidable and in fact will be overcome scientifically in the not-too-distant future. In a recent lecture entitled “Prospects for Extending Healthy Life – A Lot”, Aubrey Grey addressed a crowd at the product innovation division of Yahoo known as Brickhouse with the following words: “I think that many of the people in this room have a good chance of living to one thousand.” Grey is a biologist from the UK who runs something called the Methuselah Foundation, and holds a degree from Cambridge University.

In late 2007, Yahoo executive Salim Ismail said something very similar when he addressed an audience of Silicon Valley types at the company’s headquarters. Lamenting the poor levels of effectiveness of the human brain, he said: “We need to design a better one. We need computer chips monitoring our neural networks. Evolution isn’t going to do this for us. So technology is going to have to do it.” James Clement, executive director of The World Transhumanist Association, told a writer from The Futurist that “Transhumanism is about using technology to enhance ourselves – enhancements like longer life-spans, better cognitive abilities, and improved happiness.”

Transhumanism appears to be pursuing several paths toward immortality; one path is hoping to achieve the goal through the prolonging of life through anti-aging technologies, incorporating nanotechnology-level robots that remove and replace aging cells at the molecular level. Another path is based on the migration of all of the information from one human brain to another, basically downloading and then uploading it as though it were computer files.

Proponents of this approach, sometimes referred to as “Uploaders”, propose that the human brain be sliced into razor-thin segments, scanned, and their information uploaded to a computer program that reassembles the information into a new brain. A third path follows ongoing work in cryogenics, where newly deceased individuals’ bodies are frozen and remain in stasis until technology advances to the extent that they may be thawed and re-animated. (There are about 200 known bodies “on ice” now, and at least another 800 signed up for the program at ALCON in Scottsdale, Arizona.)

Still another tendril off this branch of scientific endeavor desires not only to prolong human life, but also to enhance human capabilities in the course of the work. Andy Rondeau, a Transhumanist programmer quoted by the Futurist says: “The gap between Einstein’s rain was closed. There were synapses going between left and right lobes.” Fellow Transhuminist Kennita Watson then chimed in: “So he was a mutant. Maybe we could engineer the closed gap in our brains. Then we would gain intelligence.” Essentially, the human being is regarded by Transhumanists as an automaton with the body representing the machine and the brain representing the computer.

All of this might be considered junk science or even science fiction, except that it has gained considerable momentum and credibility through the application of millions of dollars in donor funding, especially in Silicon Valley. As of 2009, co-founder and former CEO of PayPal Peter Thiel had invested more than $4 million in the movement.

There is of course danger that arises with all of this promise; Great danger. Nanotechnology in and of itself represents an opportunity for “nanobots” (molecule-sized robots) to fundamentally disassemble the world as we know it, and the scenario played out in the Terminator movies where a superhuman artificial intelligence destroys humanity comes into the realm of the possible.

One interesting observation made by David Gelles, who authored the Futurist article from their January-February 2009 issue, was: “Any resemblance between Transhumanism and apocalyptic Christianity is not something the movement devotees are looking to convey. The vast majority are atheists; if you believe in heaven you don’t need radical life extension.”

I think Gelles has it exactly right, although I have often reflected many times on how wasteful it seems to lose lifetimes of knowledge and experience with every human death. Gelles also pointed out that pundit Francis Fukuyama called Transhumanism “the world’s most dangerous idea” in the Journal of Foreign Policy, musing that the first victim of Transhumanism might well be equality, since human enhancements – when they become available – will likely be affordable only to the very wealthy. This poses more profound dangers socially and economically than most of us can likely imagine right now.

So, do you want to live for 1,000 years or more? What do you think?

The Looming Disasters of Immaturity

William Halal is a Futurist whose work I have followed for some years. He is a professor emeritus of Science, Technology, and Innovation at George Washington University in Washington DC. Mr. Halal authored an article in The Futurist magazine’s March/April issue, which says: “Technological, economic, and political projections make it clear that the world must mature if it is to survive. The crisis of maturity may not prove catastrophic if acted upon in time, but a major turning point seems inevitable as the multiple threats of worldwide industrialization, energy shortages, climate change, environment collapse, nuclear holocaust, spreading terrorism, global conflict, and other unknown crises reach critical levels about 2020.”

In the Futurist article, Halal describes the results of a survey by TechCast of 100 experts in the fields of Energy, Information Technology, Manufacturing & Robotics, Commerce, Medicine & Biogenetics, Transportation, and Space. Based on the results, he offers several pages of observations and prognostications. While I would disagree with Halal on some points (related primarily to “climate change” and “environment collapse”), he makes several salient points in other areas. Examples that he offers include the near collapse of the global banking system in 2008, the unlikely prospect that nuclear weapons controls from the Cold War era can be effective in a world where nuclear weapons have become so prolific, and the incredibly destructive power that terrorism has brought to bear as a result of readily available technology.

I think he is also perhaps reaching a little in this article by projecting the arrival of “global consciousness” in 2030. (Global consciousness in this context is described by Halal as “the next step in this [human] evolutionary process.”) He anticipates that this will occur as the culmination of strategic planning, dialogue, collaborative problem solving, diplomacy, conflict resolution, ceremonies, mediation, prayer, and other yet unknown technologies of consciousness”. Halal says that recent forecasts project that “routine human thought should increasingly be automated by far more sophisticated IT networks, a second generation of more powerful computers, smart robots that think and talk, and other forms of artificial intelligence that approach human skills.”

The upshot for Halal is that between 2020 and 2030, “….we will move up another level on the evolutionary hierarchy to address global challenges that seem overwhelming.” Holy cow. After “millions of years of evolution”, the next generation of software and hardware is going to move us all up a rung! Isn’t it a great coincidence that we are the generation to be right here on the cusp of such a monumental event? I have to admit that I am skeptical. Halal also describes the thinking of Strobe Talbott and others who advocate for global governance, using terms like “emerging global order”, saying, “The tough challenge of shaping global consciousness lies ahead.”

Some of the specific developments called out in the TechCast survey include:

  • By 2020: Pervasive networks, mass customization, virtual education, Designed materials, optical computers, precision farming, space tourism, telemedicine, and aquaculture.
  • By 2030: Artificial organs, smart robots, genetic food, desalination, biocomputing, quantum computing, a cure for cancer, automated highways, a moon base, and hypersonic planes.
  • By 2040: Life extension (see my blog on Transhumanism), humans on Mars, maglev trains, nuclear fusion, interstellar travel, and first contact with alien life. (These last two are right on the end of 2040.)

I sympathize with Halal’s view that the world may well stumble across technologies that we are ill prepared to understand and even less prepared to control. Certainly when we have seen technologies like the ability to split the atom come along, it changed everything. In that case, the technology escaped allied control and only the idea of mutually assured destruction (MAD) held it in check for decades. Now the barriers to entry in a market where dirty bombs are relatively easy to acquire, transport, and detonate changes everything.

Recently, the internet provided unprecedented opportunities for people to communicate and learn, but as the technology became ubiquitous, it also provided unprecedented opportunities for identity theft and fraud. Future technologies that enable human beings to essentially merge with computers through implants, jacking up capabilities in technologies in a manner similar to the development of the atomic bomb but with much wider accessibility, pose profound and unprecedented risk to all of mankind. With unprecedented opportunity and capability comes unprecedented risk. I am praying that all of us have the judgment – or as Halal describes it, the maturity – to handle the new opportunities in responsible ways and do no harm with them; but that would be a first for mankind.

What do you think?

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