August 19, 2021
The similarities are mounting…
President Biden has said he wanted to model FDR in his presidency.
But with this country’s rising inflation and now the tragic Afghanistan debacle, Uncle Joe is channeling Jimmy Carter more and more every day.
A Messy Mistake of an Exit
$1 trillion dollars.
That’s the estimated amount of money we spent on Afghanistan in the last 20 years.
2,300 American lives.
That’s how many people we lost.
And for what?
So we could walk away as horrifically and callously as we just did? So we could leave people clutching plane wings as the U.S. fled the country… only to plunge to their deaths? So we could create an environment that would be ripe for growing terrorists all over again on the 20th anniversary of 9/11?
President Biden’s top general, Chairman of the Joint Chiefs of Staff General Mark Milley, reportedly briefed senators earlier this week to alert them that terrorist groups, like Al Qaeda, could reconstitute in Afghanistan sooner than the “two years defense officials had previously estimated.”
Apparently, everything is happening sooner than those in the administration believed it could.
After all, our intelligence officials thought it would be at least three months until Kabul fell to the Taliban… and there would be enough time to get Americans out.
That was last week.
Instead, Kabul fell to Taliban control almost immediately. Americans are still there.
Just how many Americans? The Biden team does not quite know. Pentagon spokesperson John Kirby told CNN on Tuesday that his “best guess” was that there are now 8,000 to 10,000 Americans still in Kabul.
This is obviously alarming… alarming enough that the publisher of the Washington Post reportedly sent an e-mail pleading with Biden advisor Jake Sullivan to help secure the safety and exit of American journalists still in Kabul with their families.
It’s what you might call one big giant screw-up… very reminiscent of Jimmy Carter’s mistakes with Iran in the 1970s.
Combined with mounting inflation worries (including Biden asking OPEC to increase production), it feels as though we’ve taken a step back in time… to a decade most people would like to forget.
Ken Langone, the co-founding billionaire of Home Depot, went on CNBC recently to explain the biggest threat for Americans and their money.
This week has been challenging. I don’t think I’ve ever tweeted so much. I’ve been sick to my stomach from the images coming out of Afghanistan… and the fate that awaits so many Afghans, especially women and girls.
To be clear, I’m not one who believes America needs to be everywhere. I am not a fan of meddling around the world as much as we do… And I’ve supported a path out of Afghanistan so that we can focus more on the changing nation of warfare in the modern age.
But, when we do meddle, we need to do it right… And when we leave, we need to exit properly.
The events unfolding in Afghanistan prove we did it all wrong… Despite advice from his generals to keep 2,500 U.S. troops temporarily on the ground in Afghanistan, Biden and his State Department thought they knew better.
Like Carter, Biden failed to think through his strategy. Biden wanted out ahead of the 9/11 anniversary, so instead of diligently planning a strategic exit from this lawless country, he yanked the rug out from under its people. Left with no support, and no ability to defend themselves… the country was taken over by the Taliban.
(Somehow in our 20 years there, we couldn’t figure out how to teach them to protect themselves? Another total travesty and failure on our part… )
Our president briefly left his vacation at Camp David (finally) on Monday to address reporters in a scripted televised press conference with no questions taken. He told us that the fall of Kabul happened “faster than anticipated.”
He also said that “the buck stops here” but managed to then blame Former-President Trump as well as the Afghans themselves for his administration’s failure to manage a peaceful exit.
This should not be political… When we screw up, regardless of the party in charge, we need to be able to honestly admit our failure.
I understand and empathize with the political pressure to get out of Afghanistan. No one wants endless war, but Americans don’t leave people literally hanging. There is no excuse for such incompetence.
This moment in time has sealed President Biden’s fate as one of the worst leaders of modern times.
Our Problems Are Bigger Than Just Afghanistan
In addition to the Middle East woes, when you couple Biden’s massive foreign policy failure with the inflation that is setting in… you have the real makings of a 1970s style disaster.
Producer prices rose to a record-shattering 7.8% growth in the latest data. This increase in what producers pay for goods and services will soon spill over into consumer prices, as I’ve repeatedly warned…
But, how much more can consumers take? Growth in consumer prices is clocking in at a 5.4% increase – while wages are barely up 1%.
Meanwhile, the Federal Reserve, as Dr. Ron Paul tells us in this week’s American Consequences podcast, is perpetuating and encouraging even more inflation.
Couple the Fed’s money printing with additional stimulus from the government – and it’s increasingly evident that Biden’s leadership (or lack thereof) is feeling more like Carter’s every day.
Americans Don’t Want to Be Demonized
Vice President Kamala Harris seems to want to distance herself from Biden’s foreign-policy fiasco this week. Indeed, some members of the conservative press are reporting that Harris and her staff are staying focused on Haiti.
When asked whether she would stand alongside the president during his Monday press conference, the Vice President allegedly said, “You’re not going to pin this on me.” (Although her words were reportedly a bit more colorful…)
I commend her for what may be her smartest move since assuming office.
And like Kamala, Americans don’t want this fiasco pinned on us, either…
Yet, sadly, thanks to some politically motivated people in the current administration that mistakenly assumed they had all the answers… this week’s humanitarian disaster will forever be owned by America.
My investing takeaway from this entire news cycle is that we’re experiencing a time period reminiscent of the 1970s. American investors need to be as prepared as possible for additional inflation. It’s the reason I’ve continually recommended real estate assets, commodities (including oil and gold), and the equities market as a whole.
Granted, the stock market may be a bit distorted… How can there not be distortion when the Fed is buying $120 billion worth of treasuries each month?
In fact, that’s entirely why the yield on the 10-year remains so devastatingly low… not because inflation is “transitory,” as the Fed and others in government would like us to believe, but because the Fed is artificially suppressing yields.
Let me ask you this: would you lend someone money for 10 years knowing that all you’d get back is your money plus 1.3% after a decade? No way! And yet that’s exactly what bond investors are doing right now.
In a normal environment, and assuming the investing public bought the idea of “transitory inflation,” the yield should really be somewhere in the vicinity of more than 3%.
Now I realize there are not a lot of places to put your money these days. Forget Europe, given its obvious political challenges, and forget China, given its unpredictability… but still — only 1.3%?
As a result of the Fed’s meddling, investors are being forced further out on the yield curve because (for now) the Fed wants it that way. So in the interest of making money, I believe equities are still a rewarding space to be… We can’t all fight the Fed, and folks need to be realistic.
However, overall sentiment is growing weaker. We can expect a shift back toward more conservative economic and foreign policy principles as a result of both inflation and the horrific images coming to us from Afghanistan.
The pendulum always swings back…
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Publisher, American Consequences
With Editorial Staff
August 19, 2021