Previous Columns
8:30 AM EST Monday, August 7, 2006: We are entering a critical week. To wit:

1. The Fed meets to tomorrow to decide on interest rates. I believe it will raise them, crimping the U.S. economy further.
2. BP has shut down half its oil production in Alaska, causing the price of oil to spike to $76 in early Asian trading today. I believe oil is on its way to $100. $4 a gallon is coming soon. Too soon.
3. The Israel-Hezbollah war has escalated. More dead. More rockets. The Superpowers are trying to stop the war with U.N. resolutions. That won't work. What's next? Pick a gruesome scenario: U.S. involvement?

First, understand the Fed's job is twofold:
1. Maintain the integrity of the currency. That means combat inflation.
2. Run the nation's banking system. Make sure there is sufficient liquidity in the banking system to avoid runs on U.S. banks.

The Fed's job is not to worry about how fast or slow the economy grows, or doesn't grow. It's primary goal is maintain a reasonable level (i.e. very little) inflation.

To curb inflation, the Fed has raised interest rates at 17 consecutive meetings (like the one tomorrow). Still, inflation is accelerating. Wages are up 6.8% in the past year, the most in six years. Energy and food are skyrocketing. The Fed has to raise rates. That will hurt the economy. That's the Fed's objective -- slow the economy to restrain inflation and protect our currency.

The Fed, BP's oil problems, the Israel-Hezbollah war and the housing slowdown are not good for the economy. There is talk of a recession next year. I don't believe that talk, though I do believe in a slowdown of the growth of corporate earnings, which will hurt stockmarkets. Cash remains king, except in rare "situations."

The weekend's weather was eerily beautiful. Warm. No humidity. Blue skies. Perfect. All the alternative energy plays I looked at are way overpriced. I'll keep looking.

The geography of the Middle East: When you study this map (courtesy Google Maps), you see three things:
1. How large Iran is. It's huge.
2. How two countries with significant U.S. troop presence border it. Those countries are Iraq and Afghanistan. How would you feel if someone (Russia?) had taken over Canada and Mexico?
3. How Iran could easily (if it wanted to) disrupt the world's flow of oil. About 25% of the world's oil production passes through the Strait of Hormuz, the Northern part of which is Iran.

Remember last year when Iran suffered a huge earthquake with 100,000 or so dead? Syrian planes flew in relief supplies. Apparently they flew back to Syria loaded with missiles for Hezbollah.

Pondering, Discussing, Traveling Amid and Defending the Inevitable War. This is from Bernard-Henri Levy, the French writer and philosopher, writing in the Sunday New York Times:

Israel did not go to war because its borders had been violated. It did not send its planes over southern Lebanon for the pleasure of punishing a country that permitted Hezbollah to construct its state-within-a-state. It reacted with such vigor because the Iranian President Ahmadinejad’s call for Israel to be wiped off the map and his drive for a nuclear weapon came simultaneously with the provocations of Hamas and Hezbollah. The conjunction, for the first time, of a clearly annihilating will with the weapons to go with it created a new situation. We should listen to the Israelis when they tell us they had no other choice anymore. We should listen to Zivit Seri tell us, in front of a crushed building whose concrete slabs are balancing on tips of twisted metal, that, for Israel, it was five minutes to midnight.

Keeping up a sense of humor in all this madness.

This wonderful cartoon came from Investors Business Daily.

The Brink of Madness: A familiar place. This came from the National Review, a conservative magazine (think Bill Buckley). It's by Victor Davis Hanson, a senior fellow at the Hoover Institution.

When I used to read about the 1930s — the Italian invasion of Abyssinia, the rise of fascism in Italy, Spain, and Germany, the appeasement in France and Britain, the murderous duplicity of the Soviet Union, and the racist Japanese murdering in China — I never could quite figure out why, during those bleak years, Western Europeans and those in the United States did not speak out and condemn the growing madness, if only to defend the millennia-long promise of Western liberalism.

Of course, the trauma of the Great War was all too fresh, and the utopian hopes for the League of Nations were not yet dashed. The Great Depression made the thought of rearmament seem absurd. The connivances of Stalin with Hitler — both satanic, yet sometimes in alliance, sometimes not — could confuse political judgments.

But nevertheless it is still surreal to reread the fantasies of Chamberlain, Daladier, and Pope Pius, or the stump speeches by Charles Lindbergh (“Their [the Jews’] greatest danger to this country lies in their large ownership and influence in our motion pictures, our press, our radio, and our government”) or Father Coughlin (“Many people are beginning to wonder whom they should fear most — the Roosevelt-Churchill combination or the Hitler-Mussolini combination.”) — and baffling to consider that such men ever had any influence.

Not any longer.

Our present generation too is on the brink of moral insanity. That has never been more evident than in the last three weeks, as the West has proven utterly unable to distinguish between an attacked democracy that seeks to strike back at terrorist combatants, and terrorist aggressors who seek to kill civilians.

It is now nearly five years since jihadists from the Arab world left a crater in Manhattan and ignited the Pentagon. Apart from the frontline in Iraq, the United States and NATO have troops battling the Islamic fascists in Afghanistan. European police scramble daily to avoid another London or Madrid train bombing. The French, Dutch, and Danish governments are worried that a sizable number of Muslim immigrants inside their countries are not assimilating, and, more worrisome, are starting to demand that their hosts alter their liberal values to accommodate radical Islam. It is apparently not safe for Australians in Bali, and a Jew alone in any Arab nation would have to be discreet — and perhaps now in France or Sweden as well. Canadians’ past opposition to the Iraq war, and their empathy for the Palestinians, earned no reprieve, if we can believe that Islamists were caught plotting to behead their prime minister. Russians have been blown up by Muslim Chechnyans from Moscow to Beslan. India is routinely attacked by Islamic terrorists. An elected Lebanese minister must keep in mind that a Hezbollah or Syrian terrorist — not an Israeli bomb — might kill him if he utters a wrong word. The only mystery here in the United States is which target the jihadists want to destroy first: the Holland Tunnel in New York or the Sears Tower in Chicago.

In nearly all these cases there is a certain sameness: The Koran is quoted as the moral authority of the perpetrators; terrorism is the preferred method of violence; Jews are usually blamed; dozens of rambling complaints are aired, and killers are often considered stateless, at least in the sense that the countries in which they seek shelter or conduct business or find support do not accept culpability for their actions.

Yet the present Western apology to all this is often to deal piecemeal with these perceived Muslim grievances: India, after all, is in Kashmir; Russia is in Chechnya; America is in Iraq, Canada is in Afghanistan; Spain was in Iraq (or rather, still is in Al Andalus); or Israel was in Gaza and Lebanon. Therefore we are to believe that “freedom fighters” commit terror for political purposes of “liberation.” At the most extreme, some think there is absolutely no pattern to global terrorism, and the mere suggestion that there is constitutes “Islamaphobia.”

Here at home, yet another Islamic fanatic conducts an act of al Qaedism in Seattle, and the police worry immediately about the safety of the mosques from which such hatred has in the past often emanated — as if the problem of a Jew being murdered at the Los Angeles airport or a Seattle civic center arises from not protecting mosques, rather than protecting us from what sometimes goes on in mosques.

But then the world is awash with a vicious hatred that we have not seen in our generation: the most lavish film in Turkish history, “Valley of the Wolves,” depicts a Jewish-American harvesting organs at Abu Ghraib in order to sell them; the Palestinian state press regularly denigrates the race and appearance of the American Secretary of State; the U.N. secretary general calls a mistaken Israeli strike on a U.N. post “deliberate,” without a word that his own Blue Helmets have for years watched Hezbollah arm rockets in violation of U.N. resolutions, and Hezbollah’s terrorists routinely hide behind U.N. peacekeepers to ensure impunity while launching missiles.

If you think I exaggerate the bankruptcy of the West or only refer to the serial ravings on the Middle East of Pat Buchanan or Jimmy Carter, consider some of the most recent comments from Hezbollah chief Hassan Nasrallah about Israel: “When the people of this temporary country lose their confidence in their legendary army, the end of this entity will begin [emphasis added].” Then compare Nasrallah’s remarks about the U.S: “To President Bush, Prime Minister Olmert and every other tyrannical aggressor. I want to invite you to do what you want, practice your hostilities. By God, you will not succeed in erasing our memory, our presence or eradicating our strong belief. Your masses will soon waste away, and your days are numbered [emphasis added].”

And finally examine here at home reaction to Hezbollah — which has butchered Americans in Lebanon and Saudi Arabia — from a prominent Democratic Congressman, John Dingell: “I don’t take sides for or against Hezbollah.” And isn’t that the point, after all: the amoral Westerner cannot exercise moral judgment because he no longer has any?

An Arab rights group, between denunciations of Israel and America, is suing its alma mater the United States for not evacuating Arab-Americans quickly enough from Lebanon, despite government warnings of the dangers of going there, and the explicit tactics of Hezbollah, in the manner of Saddam Hussein, of using civilians as human shields in the war it started against Israel.

Demonstrators on behalf of Hezbollah inside the United States — does anyone remember our 241 Marines slaughtered by these cowardly terrorists? — routinely carry placards with the Star of David juxtaposed with Swastikas, as voices praise terrorist killers. Few Arab-American groups these past few days have publicly explained that the sort of violence, tyranny, and lawlessness of the Middle East that drove them to the shores of a compassionate and successful America is best epitomized by the primordial creed of Hezbollah.

There is no need to mention Europe, an entire continent now returning to the cowardice of the 1930s. Its cartoonists are terrified of offending Muslim sensibilities, so they now portray the Jews as Nazis, secure that no offended Israeli terrorist might chop off their heads. The French foreign minister meets with the Iranians to show solidarity with the terrorists who promise to wipe Israel off the map (“In the region there is of course a country such as Iran — a great country, a great people and a great civilization which is respected and which plays a stabilizing role in the region”) — and manages to outdo Chamberlain at Munich. One wonders only whether the prime catalyst for such French debasement is worry over oil, terrorists, nukes, unassimilated Arab minorities at home, or the old Gallic Jew-hatred.

It is now a cliché to rant about the spread of postmodernism, cultural relativism, utopian pacifism, and moral equivalence among the affluent and leisured societies of the West. But we are seeing the insidious wages of such pernicious theories as they filter down from our media, universities, and government — and never more so than in the general public’s nonchalance since Hezbollah attacked Israel.

These past few days the inability of millions of Westerners, both here and in Europe, to condemn fascist terrorists who start wars, spread racial hatred, and despise Western democracies is the real story, not the “quarter-ton” Israeli bombs that inadvertently hit civilians in Lebanon who live among rocket launchers that send missiles into Israeli cities and suburbs.

Yes, perhaps Israel should have hit more quickly, harder, and on the ground; yes, it has run an inept public relations campaign; yes, to these criticisms and more. But what is lost sight of is the central moral issue of our times: a humane democracy mired in an asymmetrical war is trying to protect itself against terrorists from the 7th century, while under the scrutiny of a corrupt world that needs oil, is largely anti-Semitic and deathly afraid of Islamic terrorists, and finds psychic enjoyment in seeing successful Western societies under duress.

In short, if we wish to learn what was going on in Europe in 1938, just look around.

Why English Teachers Die Young
Every year, English teachers from across the country can submit their collections of actual similes and metaphors found in high school essays. Here are some of last year's winners.

+ Her face was a perfect oval, like a circle that had its two sides gently compressed by a Thigh Master.

+ His thoughts tumbled in his head, making and breaking alliances, like underpants in a dryer without Cling Free.

+ She grew on him like she was a colony of E.Coli, and he was room-temperature Canadian beef.

+ She had a deep, throaty, genuine laugh, like that sound a dog makes just before it throws up.

+ Her vocabulary was as bad as, like, whatever.

+ The revelation that his marriage of 30 years had disintegrated because of his wife's infidelity came as a rude shock, like a surcharge at a formerly surcharge-free ATM machine.

+ Shots rang out, as shots are wont to do.

+ The young fighter had a hungry look, the kind you get from not eating for a while.

+ He was deeply in love. When she spoke, he thought he heard bells, as if she were a garbage truck backing up .

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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