My goal is not to convince you to vote for Ron Paul. I’m sure your mind is already made up. My goal is to inform your views about our Foreign Policy. I have studied history and foreign affairs intensely over the last few years and have become convinced that our current foreign policy is dangerous and evil. Name any country in the world and I can give you an update on what is going on in that region and perhaps even the country itself.

I would like to address these flawed assumptions over the coming days. The first flawed assumption is that giving money to tyrants makes the world safer for US.

Wrong Assumption #1 Giving Foreign Aid Promotes US Regional Interests

Foreign Aid means giving money, food and guns to the leaders of other nations. They then sometimes use this money to rape their people to feed their soldiers. The money is supposed to help the poor. But, the problem with tyrants is that they are evil, and evil men don’t feed the poor even when you pay them to.

We gave or continue to give aid to the following regimes:

• Mubarak Regime (Egypt)
• Hussein Regime (Iraq)
• Taliban Regime (Afghanistan)
• Putin Regime (Russia)
• Gillani Regime (Pakistan)
• Wolde-Giorgis Regime (Ethiopia)
• Chavez Regime (Venezuela)
• Castro Regime (Cuba)
• Palestinian Authority Regime (Gaza Strip)
• Gaddafi Regime (Libya)
• The list goes on and on.

The shorter list is the tyrants we don’t aid. To my knowledge is Kim Jong il and Kim Jong-un of North Korea.

What is so sad about this list is that we have ended up going to war with most of these tyrants anyway.

I am convinced that Foreign Aid is evil and one of the biggest reasons that the third world stays poor. If you read the Old Testament, you learn that the poor stay poor not because they lack money. They stay poor because they lack justice. When we give food, guns and cash to tyrants we promote the very injustice that hurts the poor. Also, when food does make it to the people it puts local farmers out of work since they can’t compete with free food. Oh, and foreign aid is bankrupting our economy. Socialism is bad, very very bad.

Borrowing money from China to then give aid to tyrants is like borrowing cash from a loan shark to hire a drug dealer to shoot the homeless.

Ron Paul is the only candidate who opposes to Foreign Aid based on principle. The other candidates like aid but don’t think we can afford it right now.  Congressman Paul’s plan to cut 100% of foreign aid will help US and will promote justice around the world. It will also help Israel since we give seven times more money to Israel’s enemies than we give to Israel. Israel doesn’t need our money, Israel just found a huge oil reserve that has them set for years. More on Israel to come.

What do you think? Is foreign aid ever justified? Tomorrow we will discuss whether the number of terrorists is fixed or variable.

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Predicting the future is based on three things: cycles, trends and anomalies.  I have no crystal ball to anticipate anomalies. But I do watch cycles and trends. Here are 11 things I see happening in 2011.

Previous Predictions:

• 2010 Predictions (Score 7.5 out of 10)
• 2009 Predictions (Score 4 out of 9)

Prediction 1: New iPad With Camera

I predict that apple will come out with a new iPad in the first half of 2011. It will have a front facing camera. But even then video calls won’t catch on. Why? Because half the population is women and women feel uncomfortable being on camera without being dressed up. Also people don’t want others to know when they are not paying attention.

Prediction 2: Real Estate Market to Crash in Austin

Historically Austin tends to trail the rest of the country by about three years when it comes to downturns. Austin real estate has been overpriced for years and is ready for a big drop. With a solid republican majority in the Texas Legislature look for some significant budget cuts which may mean government layoffs.

I predict a 15% drop by the end of 2011.

Prediction 3: Voter ID Bill Will Pass This Year

Republicans in Texas have been trying to pass this bill for a decade and have been thwarted every session. Now they have enough votes to push it through.

Prediction 4: iPhone will come out on Verizon.

I think Steve Jobs has heard the customer outcry against AT&T. The AT&T iPhone will also come out and support 4G. For bonus points I predict that the next iPhone will have a chip that lets it go on any network.

Prediction 5: Sarah Palin will announce a bid for presidency.

Palin is surrounded by too many worshipers to not run. For bonus points I predict that she will continue to get tons of media publicity but will fail to win the primary in 2012 because the main body of republicans won’t think she can win the general election.

Prediction 6: Global Famine

Global Weather patters are changing and they have already led to crop failures in Russia, Florida and Australia. Food prices have already started to soar. In China there  food riots are breaking out in the streets. I see this trend continuing into 2011.

Famine may be a bit too strong of a word. Thankfully we have a free market and global distribution so I predict the impact to be a global rise of about 10%  in food prices which will hurt the poor. Start saving to help feed our brothers in poor nations.

Prediction 7: UT Make it to a Bowl Game

I think UT’s bad season was an anomaly. With a new coaching staff and an older, heaver offensive line I think Gilbert will lead the horns to victory this year. For bonus points I think the horns will either loose a BCS bowl or win a non BCS bowl.

Prediction 8: US Inflation to Rise to 5% or above

The Federal Reserve’s quantitative easing has flooded the world with dollars. Not only that but crop failures around the world are leading to higher food prices. This double pressure will lead to inflation.

Prediction 9: An Umstattd Book will be published.

There are three Umstattd books in the works this year and I predict that between the three of them one will get published.

Prediction 10: Unemployment to Remain High

I feel that our jobless recovery has been do the catastrophic rise in the minimum wage. The minimum wage jumped by 30% between 2007 and 2009. Do those dates look familiar? Those are the same dates as the recession. The likely cure for this minimum wage is inflation which won’t be enough to fix it this year. Right now unemployment is around 9.2%.

At the lowest I predict the rate will fall to 8.5% but I would not be surprised to see double digit unemployment by the end of 2011.

Prediction 11: 5,000 Saved Through 40 Days for Life

So far 3,599 babies have been saved through the efforts of folks just like you praying in front of abortion clinics. 40 Days for Life is growing and improving its sidewalk counseling approach.  For bonus points I predict that the number of workers who have quit will pass 50 and the number of facilities closed will pass 12.

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Problem
Bush is wrong. His $700 Billion bailout is not taxpayer money. It is more debt. The federal government already has a deficit. So there is no “tax payer money” laying around unused. We spent it all in Iraq and on Medicaid. If we want $700B more we are going to need to borrow it from China .

If we borrow our way out of this hole we may be just moving the crisis from Wall Street to Washington. If you have not read my post on the Chinese Paper Nuke you should give it a look. We will only make the problem worse if we try to borrow our way out of our debt.

Old Solution
During the great depression the goal of the Big Chiefs was to preserve the value of the dollar at the cost of liquidity and credit. The result was a credit crisis while the dollar gained in value during the depression. At the end of the recession and following war we had one of the strongest currencies in the world. This lead to some of the most prosperous years in our nation’s history.

New Solution
Now our goal is to preserve our need for liquidity even at the cost of the dollar. The result? Inflation. We can inflate our way out of this hole if we don’t care about our currency.

My Solution
Maybe we should focus on trying to pay off our debt. By that I mean you as an individual paying off your mortgage ahead of time. I mean corporations paying off their loans and the government paying off its bonds. Maybe getting out of debt is a better solution to a debt problem than more debt.  But that’s just me.

Blame
Ron Paul has seen this problem coming for a while. The democrats have denied it all along and the republicans can’t find a solution because they are unwilling to cut spending or allow a painful market correction. The media blames the free market and lack of regulation. yuck. As if regulated economies don’t have more problems.

Cause
The cause? A mix of over regulation and under regulation. The government penalized banks for not lending to sub prime borrowers. Then it required them to mark their assets to the market daily. This caused several banks to become insolvent on paper over night when they could not sell their mortgage backed securities.

Take Away
The economy is too complex for a handful of policy makers and central bankers to effectively manage. These sorts of mistakes are only to be expected. More regulation will not fix the problem. Getting out of unnecessary debt can.

House of Cards: Clinton’s Fault

http://uk.youtube.com/watch?v=1RZVw3no2A4

What do you think?
I would love to hear what you think about our troubles. I talked with Michael Clark at length about this and he had some interesting insights. He feels a market correction is too painful and that the bailout is not that dangerous.

I also talked with Dr. Larry Woodward the Wizard of UMHB. Woodward saw this problem coming and didn’t lose any money on the market slide. He is still very bearish and thinks we are far from the market’s bottom. He thinks we need to modify our current regulations and cut taxes and spending.

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The Philosophy of Liberty video is one the best presentations of any set of political principles I have ever seen. This video communicates more in 8 minutes than most 200 page books.

If you plan to vote in the next election or compete in speech and debate I strongly recommend you watch this 8 minute video .

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Great empires don’t fall at the top of their economic strength. Most empires walk the same road: moral decline followed by economic collapse and then military failure. The morality in our nation is slipping but our economy is still strong… or is it?

Right now, we issue roughly 2-3 Billion dollars in government bonds each day. This is current debt and does not include all of the promises we have made in entitlements to future generations. China has devalued their currency by 40% and so they purchase U.S. Treasury bonds because the Yuan is a bad investment right now. The result of this is that China is putting the money they make off our trade deficit with them back in our economy artificially propping it up. We then spend this going in further in debt.

"The borrower is servant to the lender."
-King Solomon

Here is the problem: Bonds garner a lower return than stocks because they are lower risk. If China were to sell their bonds the supply would go up making the cost go down. As the costs go down the investors would sell their high-risk stocks to buy these cheap low risk bonds. What this means is that China could at any time suck billions directly out of our stock market.

If China sold a handful of these bonds (lets say 500 billion) it would cause a catastrophic drop in stock prices AND a drop in the U.S. money supply. This would trigger a panic amplifying the problem all the more. Wall Street would respond to this panic through cost cutting and layoffs. Unemployment would go up causing the economy to continue to go down resulting in an economic tailspin. I could get more technical into the economics of this but in short, this chain of events could cause a depression like we have never seen before as a nation.

Why would China employ the paper nuke? One word: Taiwan . China has been staring longingly at Taiwan for decades. The only thing between China and their prized possession is a U.S. carrier group. Right now, nothing trumps an aircraft carrier militarily except for a nuclear bomb or diplomacy. By threatening with the paper nuke, they can strong arm us out of the South China Sea and seize Taiwan. But why stop there? If they find they can manipulate our sovereignty through finical terrorism then there is no telling where it will stop. How would we fight them since we fund our military with the money they loan us.

Just within the last month, China made their first threat to start selling bonds as leverage in a diplomatic negotiation, interestingly, to protect their trade advantage. If they play their cards right they could trigger a panic by selling only a portion of their bonds and save the rest for leverage. Or better yet keep the bonds as a ransom and just use the threat to undermine our sovereignty.

I am far more concerned by this sophisticated economic attack than I am by the Jihadists who blow themselves up. The only solution to limit China’s economic power over the United States is to eliminate the national debt as quickly as possible. If we don’t get out of debt soon (both as individuals and as a government) our lack of fiscal restraint will be our downfall.

Unfortunately, only one candidate understands this problem. I don’t know if Ron Paul has connected the dots as I have but one of the reasons he gives against the war in Iraq is that, he says, we can’t afford it because to pay for it we have to borrow from the Chinese.

If we feed the lion to fight the tiger, are we better off or just deceived?

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