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The Insanity of Inflation (and War)

If inflation and war are concentrated forms of insanity, America has completely lost its marbles.

Does the presence of inflation drive men mad? Or is it the other way around, with inflation created by madmen in the first place?

Today we have fresh examples of both.

The first comes courtesy of that great American dining institution, Taco Bell. As San Antonio News Channel 13 reports:

Police say a San Antonio Taco Bell customer enraged that the seven burritos he ordered had gone up in price fired an air gun at an employee and later fired an assault rifle at officers before barricading himself into a hotel room.

San Antonio police Sgt. Chris Benavides says officers used tear gas Sunday night to force the man from the hotel room after a three-hour standoff. The man is charged with three counts of attempted capital murder.

Can you blame the man? What could be more infuriating than preselecting exactly the right combination of pocket change, along with your handful of dollars, necessary to enjoy a delicious Taco Bell meal… only to find they went and hiked the price on you.

Perhaps “inflation rage” will become a new phenomenon. Gas station attendants may need to start wearing Kevlar.

Earth to Chavez

Our second example — in which inflation is a byproduct of madness, not an instigator of it — is brought to you by everyone’s favorite Maximo Lider, Hugo Chavez.

Chavez is president of a country — Venezuela — that has persistently experienced some of the worst inflation rates in the world. Last year, the officially estimated rate was 35%.

Yet according to Chavez, his nutty policies and seeming determination to run the state oil company, PDVSA, into the ground are not the true danger to Venezuelans. Capitalism is.

Capitalism is so deadly, in fact, old Hugo thinks it may have killed the Martians … via Reuters:

Capitalism may be to blame for the lack of life on the planet Mars, Venezuela’s socialist President Hugo Chavez said on Tuesday.

“I have always said, heard, that it would not be strange that there had been civilization on Mars, but maybe capitalism arrived there, imperialism arrived and finished off the planet,” Chavez said in speech to mark World Water Day.

Cuckoo… cuckoo… this man has fighter jets at his command. What a delightful thought.

So there you have it: Inflation can make you crazy, but crazy leaders also tend to stoke it. And in defense of Chavez, some of the logic used by Western central bank officials is right at home in the out-to-lunch department.

If inflation is a form of insanity, then we can expect that insanity to increase. It is not only creeping in, but being warmly invited in by the bound and determined powers that be.

Dallas Federal Reserve President Richard Fisher admitted as much in a recent speech, when he opined that the Fed had perhaps done “a bit too much” quantitative easing.

Said Fisher to a group of Germans in Frankfurt: “there’s lots of liquidity sloshing around the U.S. financial system. We are seeing signs of all the intoxication that typically takes place when we have the ambrosia of cheap and readily available capital.”

Ah, but isn’t intoxication just what the doctor ordered (Dr. Ben that is)? When the stated aim is to drink yourself sober, how can a little drunkenness not be part of the deal?

There are costs to getting drunk — like, say, the steepest rise in food prices since 1974 — but no matter. The little people and the savers can bear that burden. There are junk bonds to bid up!

(Don’t forget, you can sign up for Taipan Daily to receive all of my investment commentary.)

War Is Hell — So We’re Not Actually Fighting?

Why is it, one further wonders, that inflation and war are like peanut butter and jelly. All too often you find them together: Inflation as the cost of gearing up for war (guns and butter). Or the consequences of losing a war. Or both at the same time.

For reasons hard to fathom, Uncle Sam is now repeating all his old mistakes in Libya. Engaging in a conflict with no clear objective… challenging a leader without actually pushing him out… refusing to use full scope of force… broadcasting our desire to “get out” as soon as possible.

As with Egypt, reader responses to the Libya question were strongly unanimous. Better than nine out of 10 of you said America has no business in Libya, and that it is flat-out hypocritical for us to be there in the first place.

The roster of supposed “humanitarian missions” could stretch on without end. Where does it stop? If we are duty-bound to end the bloodshed in Libya, what about Congo… Burma… Somalia… or a dozen other places?

A few of you also made an extremely cynical (and likely quite correct) observation. One reason the White House may have seized on this opportunity to hit Libya is because showy air strikes are something the United States is “good at.”

Not to put too fine a point on it, we have perfected the art of bombing the hell out of people, impressing the CNN cameras with the precision of our infrared laser targeting devices. So why not go in there and give’ em a fireworks show?

Handling messy situations on the ground, though? Not so much.

President Obama gave strength to this suspicion — that the U.S. is happy to show off its air power — in an interview with Univision, the Spanish TV network. Asked whether a land invasion might be in the cards, i.e. putting real troops on the ground, Obama said it was “absolutely” not an option.

Remind me again, what are the odds of winning a war without effective use of ground forces? What have our past experiences been with declaring “mission accomplished” after a few flashy bombing raids? Oh, right. And this isn’t even ancient military history we’re referring to. It’s more like happened yesterday/still happening now (Iraq and Afghanistan).

President Obama has further expressed the desire of the United States to move back and cede leadership of the operation fairly quickly. Is this what it looks like when a pacifist dove plays at being a hawk? When fighting an entrenched enemy with ample resources in his own territory, signaling “we want to be out of here fast” is not the greatest idea.

But that’s OK, because according to our combat ally France — via French Prime Minister Francois Fillon — we are not even at war! As France 24 reports:

“We are not at war with Libya, we are protecting the civilian population,” said Fillon and added, “Our objectives are very specific… to protect the civilian population, excluding explicitly any occupation forces.”

Oh good. Well, that settles it then. But wait, erm, how long will the civilian population need to be protected?

Gadhafi may be a madman, but he is not an isolated madman. He has ruled Libya for more than 40 years. He has internal coalitions… allies… and a war chest in the billions, reputedly overflowing with gold.

At the same time, we don’t know who the “rebels” actually are. We understand nothing of the hidden tribal alliances of Libya, or the strength Gadhafi may draw from them. We know not whether the devil we know, a secular dictator, might be replaced by something worse.

So let’s just try and get this straight: We are fighting a war we can’t win, that we refuse to admit we are even waging, for reasons that can’t be explained, with an objective that does not make sense, on a timeline that does not exist, on moral grounds that aren’t there (who is it a soldier’s duty to fight for?), and all the while committing just about every tactical mistake possible: Openly ceding leadership, denying key options of force, broadcasting weakness to the enemy, and so on.

And all of this with two other wars we still haven’t cleaned up yet!

Mr. President, with all due respect sir: Have you been hitting the crack pipe with Charlie Sheen?

Madness. Sheer madness, I tell you. Or maybe it’s a bizarro sort of brilliance. Could the allied powers have possibly come up with a better way to make themselves look like utterly incompetent, history-blind jerks?

This latest goes back to earlier rants on the TSA (Transportation Security Administration) as a powerful meta-example of how the U.S. government has lost its marbles. We are venturing beyond stupidity, even epic stupidity, and into the realm of pure Looney Tunes. One practically expects Daffy Duck to pop up at any moment, hitting himself over the head with a cartoon mallet.

And these are the folks running the world…

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