en The Morning After: What Happens When A Government Destroys Its Currency <p><em>Submitted by <a href="">Simon Black via Sovereign Man blog</a>,</em></p> <p>Imagine this scene:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“Everyone in the country was in shock. People’s net worth had devalued more than 53% overnight.”</strong></p> <p>&nbsp;</p> <p><strong>“The value in savings accounts dropped in half and neither merchants nor consumers knew how to react because they had never been through something like it before…”</strong></p> </blockquote> <p>This is how an American business executive described living through Mexico’s devaluation of the peso exactly 38 years ago on September 1, 1976.</p> <p><strong><span style="text-decoration: underline;">Looking back, it was so obvious.</span></strong></p> <p>Mexico had a mounting debt, destructive policies, and a woefully unsustainable fixed exchange rate with the US dollar. All the writing was on the wall.</p> <p>But most people ignored the warning signs and kept their money in pesos.</p> <p><strong>Mexican President Luis Echevarria even went out on the radio to reassure people that the currency was safe.</strong></p> <p>Finally, under intense fiscal pressure, the government reached its breaking point. And on August 31, 1976, they made the decision to devalue the peso.</p> <p><strong>People woke up the next morning on September 1st to a 50%+ decline.</strong></p> <p>Coincidentally today is also the 75th anniversary of the Nazi invasion of Poland, the event that ultimately dragged the world into war.</p> <p>Germany had already invaded Austria and Czechoslovakia in the months before.</p> <p>By May 1939 Hitler had stated very plainly, “the decision remains to attack Poland at the first opportunity.”</p> <p>Even a week before the invasion, Hitler told his military commanders, “I have prepared . . . my ‘Death’s Head’ formations with orders to kill without pity or mercy all men, women, and children of Polish descent or language.”</p> <p>Germany had 60 divisions massed on the Polish border ready to invade.</p> <p>Yet people in Poland were told to keep calm, remain in place, and have confidence in their leaders.</p> <p>Finally, on August 30, the Polish government ordered a <em>partial</em> mobilization to meet the German threat.</p> <p>Needless to say, it was too little, too late. Germany invaded only hours later.</p> <p><span style="text-decoration: underline;"><strong>This is a familiar story that repeats across history. Despite obvious warning signs, people almost universally allow themselves to ignore reality.</strong></span></p> <p>It’s human nature to want to believe that everything is going to be OK. And when our political leaders whisper soothing words of hope and optimism, we take the bait.</p> <p>Looking back, it was plain as day that Mexico was going to devalue the peso. Everything about the economy and currency was totally unsustainable. Deep down people knew it.</p> <p>Similarly, it was plain as day that Hitler was going to decimate Poland. And people knew it.</p> <p><strong>Yet millions allowed their confidence to be misplaced in leaders who assured them that everything was OK.</strong></p> <p><strong>Are we so different today?</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The raw numbers tell us that most banks in Europe are insolvent. Bank in the US are dangerously illiquid.</p> <p>&nbsp;</p> <p>Most western governments are bankrupt. Pension and social security funds are insolvent.</p> <p>&nbsp;</p> <p>Financial markets are at precarious valuations. And the dollar is beginning to unravel as the dominant reserve currency.</p> </blockquote> <p><strong>These are data-driven assertions.</strong> And my guess is, deep down, your instincts are also telling you that something is seriously wrong with the system.</p> <p><strong><span style="text-decoration: underline;">Yet we’re all told to keep calm by our leaders. There’s nothing to see here, nothing to worry about.</span></strong></p> <p>Looking back, it’s all going to seem so obvious. If a major, global currency crisis hits within the next 12-months, people will think, “duh, how did I not see that coming?”</p> <p>Unfortunately by then it will be too late.</p> <p>It takes only a little foresight and planning to insulate yourself from an event that can have disastrous consequences.</p> <p>If you knew the Mexican peso was at an unsustainable level, why would anyone continue to hold pesos?</p> <p><strong>Similarly, if all the objective data suggests that the dollar is in store for an epic decline… and that the entire world is on a path to shift away from the dollar, why in the world would any rational person base his entire life savings in dollars?</strong></p> <p>It takes little effort to actually do something about it. Hold stronger currencies overseas. Own real assets. Move your retirement account abroad where your bankrupt government can’t steal it.</p> <p>These are common sense steps, just like putting on a seatbelt when you get into a car.</p> <p><strong>The time to act is now. Why play Russian roulette when the odds are clearly in favor of the house?</strong></p> <p>Don’t try to time it. Nobody has a crystal ball. It’s irrelevant whether the trend unfolds over weeks, months, or years. It’s pretty clear where this is all headed.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="309" height="229" alt="" src="" /> </div> </div> </div> fixed Germany Mexico Poland Reality Reserve Currency Wed, 03 Sep 2014 02:28:32 +0000 Tyler Durden 493816 at California Minimum-Wage Earners Work 19 Hours-A-Day, 7 Days-A-Week To Afford Rent <p>Thanks to The Fed-inspired fast-money flood driving up asset prices, <a href="">owning or even renting a home has become unaffordable to most</a>. Working a 40-hour-week, a single-earner in D.C. would need to be paid a $28.25 minimum wage for afford to rent a home... and if you live in California (and earn minimum wage), you will need to work 18.6 hours-a-day, 7 days-a-week to afford rent. <strong><em>Thank you Ben and Janet...</em></strong></p> <p>&nbsp;</p> <p>Of course, if you rent, you have flexibility... <span style="text-decoration: underline;"><strong>perhaps move to Montana instead of earning minimum wage in California or D.C. </strong></span></p> <p><a href=""><img src="" width="600" height="518" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source: The Washington Post</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="822" height="710" alt="" src="" /> </div> </div> </div> Wed, 03 Sep 2014 02:24:31 +0000 Tyler Durden 493839 at A Divided World <p>Yesterday <a href="">we showed how 'isolated' Russia was</a> (if you chose to look only at isolating parts of the world). Today, we glimpse at the world's views on China vs US... As <a href="">The Global Post notes</a>, we know that <strong>only 35 percent of Americans have a favorable view of China. But what about the rest of the world? </strong></p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="399" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source: Global Post</em></a></p> <p>*&nbsp; *&nbsp; *</p> <p>Who's isolated now?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1029" height="685" alt="" src="" /> </div> </div> </div> China Wed, 03 Sep 2014 02:06:54 +0000 Tyler Durden 493830 at The Scariest California Drought Map Yet <p>Across California, reservoirs are running dry as the drought continues to weigh dramatically on many parts of the economy. The following map, showing the <strong>dismally low levels of reservoirs</strong> in all their horrible glory could be the scariest drought map yet...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="675" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source: CDEC</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="722" height="812" alt="" src="" /> </div> </div> </div> Wed, 03 Sep 2014 02:02:02 +0000 Tyler Durden 493827 at China Services PMI Jumps Most On Record To 18-Month Highs <p>While Markit's Manufacturing PMI fell in August, the apparent demand for 'services' in China exploded. <strong>China Services PMI jumped from the worst on record 50.0 in July to 54.1 in August (18-month highs). This is the biggest MoM rise in the data on record.</strong>.. because they can. We have nothing to add because it's simply becoming too surreal and manipulated for rational explanation.</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="442" /></a></p> <p>&nbsp;</p> <p>HSBC is quick to note that it's not all unicorns and ponies and that more stimulus sis till needed.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“The headline HSBC China Services PMI rebounded to a seventeen-month high of 54.1 in August, after registering an all-time low reading in July. Apart from the rebound in the headline number, other indices suggest a mixed picture rather than a broad-based improvement. The economy still faces downside risks to growth in the second half of the year from the property sector slowdown. <strong><span style="text-decoration: underline;">We think policy makers should use further easing measures to help support the recovery.”</span></strong></p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1145" height="843" alt="" src="" /> </div> </div> </div> China recovery Wed, 03 Sep 2014 02:00:41 +0000 Tyler Durden 493838 at THe TauPe HeaRD RouND THe WoRLD... <p style="text-align: center;"><iframe src="" width="732" height="1024" frameborder="0"></iframe></p> Wed, 03 Sep 2014 01:34:13 +0000 williambanzai7 493837 at Did US Macro Just Jump The Shark? <p><strong>For the past five years there has been a very clear and significant cycle to US macro data</strong> - a slight rise to start the year, notable weakness into the middle of the year, a rapid recovery into the fall, then generally flat to year-end. <a href="">A year ago, we explained this cycle appears to be created by government agencies need to spend, spend, spend their budgets out ahead of fiscal year-end</a> (Sept).</p> <p>&nbsp;</p> <p><a href=""><img height="299" src="" width="600" /></a></p> <p>&nbsp;</p> <p>This year has been no different, aside from the knee-jerk higher in macro data - somewhat shocking in its magnitude to &#39;every&#39; economist with 3, 4, and 5-sigma beats in many data - came a little earlier but to the same level of past year&#39;s exuberance (as perhaps Ex-Im concerns, Fed concerns, and election concerns sparked earlier-than-usual spend-down by agencies).</p> <p>The last few weeks have seen US Macro surge faster compared to expectations that at any time since the initial takeoff from the 2009 lows... and note, <strong>every time we surge at this pace, US Macro tops out!</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 303px;" /></a></p> <p>&nbsp;</p> <p><strong>As in past years, this spike in activity is extrapolated by the smartest people in the room, leaving the reality to miss expectations for the rest of the year.</strong> A glance at the chart above might suggest, we just jumped the shark once more in US macro data for 2014...</p> <p>*&nbsp; *&nbsp; *</p> <p><a href=""><em>As we concluded previously,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>This begs the question: is the <em>only</em> reason why the economy tends to pick up momentum dramatically as the summer ends <strong>just a function of a surge in government spending permeating the broader economy as agencies scramble to spend all the money they have before the end of the September 30 Fiscal Year End (just so they get allocated the same or greater budget in the coming fiscal year), which subsequently plunges or is outright halted as the case may be right now</strong>?</p> <p>&nbsp;</p> <p>If so, it would explain so much, and certainly why year after year, the US economy seems to pick up in the mid-to-late Q3 period, only to dramatically fade away in the coming months, as government spending goes from a waterfall to a trickle.</p> <p>&nbsp;</p> <p>It would also put the government&#39;s role in generating transitory periodic spikes in economic output under a microscope, especially since it is so clearly staggered to recur every September as one after another government agency spends like a drunken sailor. And if that is the case, how long until the BLS or some other agency (upon reopening of course) is taken to task to normalize not only for hedonic indicators and climate-related seasonal factors, but also for what is now clearly an annual aberration of economic output trends?</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="965" height="481" alt="" src="" /> </div> </div> </div> BLS Reality recovery Wed, 03 Sep 2014 01:24:25 +0000 Tyler Durden 493836 at IQ, IP and 8 Commandments of Corporate Governance <p style="text-align: left;"><span style="color: #800000;">By: Chris Tell</span><span style="color: #800000;">&nbsp;at:&nbsp;</span><a href="" style="text-align: left;"></a></p> <p> <em><strong>Recent dealings with a company led me to think about the relationship between corporate governance, creativity, innovation and what it takes to create or indeed wreck a successful enterprise.</strong></em></p> <p>A result of having been involved in well over 100 private equity transactions (I've long ago stopped counting), Mark no doubt a similar number, has been a lot of lessons learned and a particular methodology for choosing investments. Each day I learn more and I'm far from perfect. I only hope that I keep getting better.</p> <p>One of our pillars of investment methodology has always been to focus very heavily on management in any company we invest our capital into. I've seen fabulous ideas run by idiots and they have a near 100% failure rate. I've also seen mediocre ideas run by very talented smart people succeed beyond all expectations. Clearly we need to work with good people, period. </p> <p> <strong>Albert Einstein famously commented that <em>"Creativity is intelligence having fun"</em>.</strong></p> <p><span style="font-size: 1em; line-height: 1.3em;">But what exactly is creativity?</span></p> <p>I'd define it as an ability to create meaningful ideas. These ideas brought to fruition bring value to peoples lives and people pay for value. In monetary terms this is known as intellectual property or IP. It is&nbsp;a critical element worth mentioning as the vast amount of value in today's world resides in intellectual property. Additionally, IP is mobile. Governments, organizations and individuals who try to trap IP by force are facing a tough challenge in our modern world. IP can move across borders in minutes without an individual leaving their sofa.</p> <p>Mark and I own some businesses which are 100% mobile. They are domiciled where it is most attractive for them to be domiciled and this can be changed in a matter of weeks if not days should the need arise. These businesses are driven by IP and are far from abnormal. They are, in fact, becoming the norm. </p> <p> Consider companies such as <a href=";ql=1">Apple</a>, <a href=";ql=0">Google</a> or even <a href=";ql=0">Glaxosmithkline</a>. What and where is the value in Apple? I'd suggest it is in the IP the company has built. The products are assembled in China anyway and that certainly isn't where the value lies. Apple's products could be assembled in any number of countries which provide competitive labour costs. The IP, however, can move anywhere. </p> <p> For any company their challenge is to attract talent, creativity and skill. They do this by creating an environment of openness, fairness and opportunity. A company therefore needs strong values and good governance. Without good governance talented people will soon leave as their skills will not be allowed to flourish. What is needed is an environment conducive to flourishing ideas. Ideas die when they're not put to use. Ideas die if there is no sustenance for them to grow and flourish. This sustenance is what is provided by investors in the form of capital and corporate infrastructure in the form of governance.</p> <p>Corporate governance is a favourite topic of <a href="" target="_blank">Richard Chandler</a>. If you're not familiar with the Chandler Brothers you're likely not alone. These two Kiwi gentlemen are my heroes. Extremely secretive, contrarian, driven, principled investors who invest their own capital and don't care for the limelight or what others think. They are at heart value investors often focusing on turnaround opportunities.</p> <p>Over a span of some 20 years the Chandler brothers took a $10 million sum of capital and have parleyed that into over $5 billion. They are amongst the most successful investors in history yet they are virtually unheard of by the mainstream. My kinda guys.</p> <p>I could discuss the Chandler brothers all day long but suffice to say their influence on me was one of the many catalytic reasons for the formation of <a href="">Seraph</a>, a syndicate of High Net Worth investors who together with Mark and I, invest in early stage proprietary private equity opportunities.</p> <p>Suffice to say the Chandlers focus a lot of attention on management and though they've often invested in companies with poor management they've done so in order to replace those management teams, turn the companies around and reap the rewards. They are probably THE most successful strategic narrow focused private equity investors I know of.</p> <p>Richard Chandler has a list of principles of good corporate governance and I'd like to share them with you today. </p> <p> <strong>The Chandler Corporation’s Principles of Good Corporate Governance:</strong></p> <ol> <li>Commerce and capital are based on trust. Capital will naturally flow to markets where there is a fair and impartial application of just laws. Governments have a responsibility to create a trust-based economy that protects investor property rights through the rule of law being applied without discrimination.</li> <li>Good corporate governance rests on the Cardinal Principles of integrity, transparency, and accountability.</li> <li>Prosperity flows from a partnership among shareholders, management, customers, and regulators. Management’s role is to create long-term shareholder value as well as social value through the productive use of capital and resources in an ethical manner.</li> <li>Management has a social responsibility to respect and nurture the physical, economic, moral, and social environment within which the company operates.</li> <li>Shareholders are owners. They must have the attendant rights and responsibilities of ownership. A company's structure should be based on the principle of "one share equals one vote." Shareholders are responsible for electing the board of directors which, in turn, appoints the company's management. Responsible shareholders provide oversight of management’s performance.</li> <li>Good regulations support the Cardinal Principles. They enable shareholders to exercise their oversight responsibilities without burdensome and impractical rules and procedures.</li> <li>Management is accountable to shareholders for the productive use of the capital entrusted to them and for their financial and ethical performance.</li> <li>Capital is a valuable resource which must be prudently managed. When management cannot deploy capital productively in the business, it should be returned to shareholders.</li> </ol> <p> I think good corporate governance is a bedrock on which a company can let its intellectual creativity and innovation flourish. I liken it to the compost my wife is putting into our vegetable patch for the coming spring planting. </p> <p> - Chris </p> <p>&nbsp;</p> <p><em>"I think Asia is the best place to be for the next 20 years."</em> - Richard Chandler</p> Apple China Google Private Equity Transparency Wed, 03 Sep 2014 01:01:28 +0000 Capitalist Exploits 493835 at If You Like Your "Boots On The Ground", Here's Even More - Obama To Send 350 Troops To Iraq <p>Just hours after the beheading of a 2nd American journalist, The White House has issued a statement:</p> <ul> <li><strong>*U.S. TO SEND ABOUT 350 MILITARY PERSONNEL TO IRAQ: WHITE HOUSE</strong></li> <li><strong>*WHITE HOUSE SAYS ADDITIONAL FORCES WON'T SERVE IN A COMBAT ROLE</strong></li> </ul> <p>With American non-combat, humanitarian, advisers now being dispersed to the four corners of the world for non-combat, humanitarian, advisory roles; <strong>one wonders how long it will be before someone asks President Obama just what these peace-keeping non-combat personnel will be doing in their role "to protect diplomatic facilities and personnel in Baghdad."</strong></p> <p>&nbsp;</p> <blockquote class="twitter-tweet"><p>Statement from Pentagon Press Secretary Rear Admiral John Kirby on Security Personnel in <a href="">#Iraq</a> <a href=""></a></p> <p>— Zaid Benjamin (@zaidbenjamin) <a href="">September 3, 2014</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <p><a href=""><em>As Politico reports,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>President Barack Obama has authorized the Pentagon to send about 350 more troops to Iraq</strong>, the White House announced this evening.</p> <p>&nbsp;</p> <p>The Defense Department had been considering a request from the State Department for the <strong>additional forces to protect “diplomatic facilities and personnel” in Iraq, the White House said. “These additional forces will not serve in a combat role.”</strong></p> <p>&nbsp;</p> <p><strong>Pentagon press secretary Rear Adm. John Kirby said the new detachment would increase the total number of U.S. troops “augmenting diplomatic security in Iraq” to about 820. </strong>The new force includes a headquarters element, medical personnel, helicopters and “an air liaison team,” Kirby said. About 55 troops who have been in Baghdad since June will “redeploy” elsewhere in Central Command as part of the move.</p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="598" height="548" alt="" src="" /> </div> </div> </div> Barack Obama Iraq President Obama Twitter Twitter White House Wed, 03 Sep 2014 00:59:01 +0000 Tyler Durden 493834 at Memo To Washington: Iraq Is Not A Nation And You Can’t Build One There With Bombs <p><em>Submitted by <a href="">David Stockman via Contra Corner blog</a>,</em></p> <p>Washington&rsquo;s strategy in Iraq is in shambles, but not just because America&rsquo;s spanker-in-chief is really a wimp at heart. The problem is far more generic.<strong> To wit, the geographic territory of Iraq is not a nation; it is an arbitrary series of lines on a map drawn 100 years ago by dandies in the foreign offices of two fading empires (the British and the French)</strong> - which lines encircled numerous tribes, ethnicities and religious confessions which had no interest in sharing a common statehood.</p> <p>In the subsequent century, the warring peoples corralled within the Sykes-Picot boundaries were ram-rodded into a tenuous co-existence by a series of brutal monarchs, generals and dictators, backed up by British and American occupiers. But then the neo-con geniuses in the George W. Bush Administration hung the last dictator and the poll readers in the Obama White House had the good sense to adhere to their campaign pledge and bug out.</p> <p><strong>They left behind $25 billion in military training and state-of-the-art warfare equipment, but neither a dictator nor a nation.</strong> Indeed, under the later heading they had endeavored to build a nation where there had been none, but ended up liquidating&nbsp;the machinery - the Republican Guards and the Baathist political party&mdash;that had enforced co-existence with machine guns and poison gas canisters.</p> <p>Foolishly claiming America&rsquo;s job was done at the end of 2011 when the last GIs boarded transports out of Bagdad,&nbsp; Barrack Obama was actually opening the gates of hell without a clue as to the furies that would soon come swarming through. Well, they are all here now with blood soaked hands grasping their weapons and agitated&nbsp;tongues issuing the spittle of revenge and historic enmities.</p> <p><strong>Yet the foolish man in the White House and his historically illiterate advisors keep banging the same old failed lever.</strong> Namely, they&nbsp;are once again attempting&nbsp;to deploy bombs, dollars and hortatory commands to cajole and herd Sunni, Shiite, Kurds and numerous other sectarian and tribal fragments from the time warp of history into a common polity&mdash;-a purported nation that would do Washington&rsquo;s bidding in the ancient&nbsp;lands of Mesopotamia.</p> <p>So doing, they are attempting to mobilize the alleged Iraqi nation against the freshly <em><strong>minted</strong></em> threat of the Islamic State. But&nbsp;yesterday&rsquo;s news about the relief of the&nbsp;ISIS siege on the&nbsp;northern town of&nbsp;Amirli&nbsp; underscores how truly senile and clueless the Washington War party has actually become.</p> <p>Yes, it was American bombers who spared the 17,000 Shiite Turkmen besieged there of the horrible prospect of a Sunni conversion at the sword. Consider, however, the associated and allied forces on the ground which essentially observed and reported the flight of the ISIS fighters from the aerial onslaught.</p> <p>There was the Kurdish Peshmerga army that for years occupied a high rank on the State Department&rsquo;s list of terrorist organizations.&nbsp;And also on hand were various and sundry Shiite militias&mdash;&ndash;many of which have been aligned, funded or even directed&nbsp; from the headquarters of the Axis of Evil, the allegedly terrorist nation of Iran. Indeed, as one Sunni politician confessed to a <a href="">Wall Street Journal reporter</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;We don&rsquo;t really have an army. Maliki just created a sectarian army, working with militias,&rdquo; said Hamid Al Mutlaq, a prominent Sunni politician. &ldquo;A lot of criminals, killers and bad people were included.&rdquo;</p> <p>Shiite militias such as the Badr Corps, the Hizbullah Brigades, Asaib Ahl Al Haq and the Mehdi Army, have all been accused of abuses against Sunnis.</p> </blockquote> <p><strong>But the frosting on the cake came from Washington&rsquo;s former man in charge&mdash;outgoing prime minister, Nouri al-Maliki.&nbsp; </strong>Making his last hurrah, he showed up at Amirli praising the Shiite militia men for their heroics&mdash;-perhaps including those who only weeks earlier wiped out 70 Sunni worshippers in a nearby town&mdash;while failing to even mention the American warplanes which had actually done the job or the Peshmerga that have actually carried the fight against ISIS in the north.</p> <p><strong>As if to remind the world that there is actually no such thing as an &ldquo;Iraqi army&rdquo; but only the armed Shiite in Iraqi uniforms or their own militia, Maliki called this wholly transient and irrelevant relief of one tiny town&nbsp;among the checkerboard of vestigial&nbsp;religious sects which occupy the upper Tigress-Euphrates Valley &ldquo;a second Karbala&rdquo;.&nbsp;</strong> Well, no wonder the Sunni are alienated! That&rsquo;s the battle of Gettysburg on steroids. Its where the 13-century long schism between the Sunni and Shiite all started.</p> <p>As for the retreating ISIS warriors, never mind that their ranks were formed during the US engineered &ldquo;surge&rdquo; in Anbar province in&nbsp;2007-2008 and the CIA training camps for Syrian rebels &nbsp;in Jordan during&nbsp;more recent months. At least the American bombers did destroy a few more American Humvees.</p> <p>And that&rsquo;s actually the point. <strong>American bombers&nbsp;can destroy the equipment left behind from the Bush occupation, but that&rsquo;s about all. </strong>The second battle of Karbala! Please, can Washington possibly get a more poignant reminder that it cannot bomb or bribe an Iraqi nation into existence?</p> <p><strong>Indeed, it is time for Washington to learn to celebrate the letter &ldquo;P&rdquo;. It stands for partition.</strong> Let the Kurds have their nation in the northeast and make their political and economic arrangements&mdash;already well advanced&ndash;with Turkey.&nbsp; Let the south of Iraq congeal into a Shiite province&mdash;-loosely or otherwise affiliated with Iran, which together might form an effective barrier to the expansionary ambitions of the Islamic State.</p> <p>And finally, let ISIS try to govern 8 million people in the dusty villages and impoverished desert expanse of the Euphrates Valley by means of the sword and medieval precepts of Sharia law. <strong><u>The resulting &ldquo;blowback&rdquo; from the bestirred people of the&nbsp;ISIS occupied&nbsp;lands&nbsp;will do more for the safety and security of the American people than all the drones and bombers that Washington could send to forge a puppet nation within borders that have already been deposited in the dustbin of history.</u></strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="382" height="283" alt="" src="" /> </div> </div> </div> Iran Iraq None Turkey Wall Street Journal White House Wed, 03 Sep 2014 00:38:51 +0000 Tyler Durden 493833 at