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Follow on Google News | Congress near deal on national debt and Iran nuclear programDemocrats believe they have a strong hand and refuse to accept anything but a clean resolution to fund the government. Conservative Republicans believe Obamacare is a nationalization of health care, and have been energized by Senator Ted Cruz.
By: Dr. Stephen Johnston, "Tea Party Culture War" President Obama is willing to negotiate with Iran and appears to want to establish his legacy with peace in the Middle East. Iran’s new President Rouhani has stated fast track negotiations can be completed in three months to a year. A treaty with Iran would need to be approved by the Senate, and verified by UN. Charles Krauthammer, on Fox news, stated any treaty with Iran would isolate Israel, and require it to defend itself by a unilateral attack of Iran’s nuclear facilities, even during prolonged negotiations. Israel’s Prime Minister, Benjamin Netanyahu has told President Obama and the UN that Iran cannot be trusted. President Obama believes Iran is a small country, and is not a threat to the U.S. at this time. Israel believes Iran can develop a nuclear weapon within three months to a year. Iran has practiced launching missiles from a cargo ship. A nuclear bomb exploded over the East Coast could cause an electromagnetic pulse which could destroy electric grids and electronics, and put half the U.S. in the dark ages. Janet Yellen is expected by most Fed watchers to be nominated to replace Ben Bernanke within weeks, and to be confirmed by the Senate as the next Fed chair. Bernanke is scheduled to complete his term January 31, 2014. The fight over the debt is expected to keep QE in place until 2014. Yellen as the new Fed chairperson can be expected to continue the policy of depreciating the currency, even if Fed funds rate is zero, to stimulate the economy. Princeton Professors Bernanke and Krugman in the late 1990s determined Japan’s “lost decade” was caused because they did not print enough yen. To increase monetary velocity, the Fed must instill in the public fear of inflation or the wealth effect to generate consumption. The route to a wealth effect is an increase in asset values of stocks and home prices. Janet Yellen is considered a dove. She is a proponent of Bernanke’s quantitative easing and a zero interest rate policy (ZIRP). She believes in dollar devaluation to create fear of inflation to fuel inflation. Financial authority James Rickards is concerned the U.S. national debt and deficits are so large we have run out of dry powder. If the U.S. faces a major war in the Middle East it will experience a major banking crisis. David Stockman warns that the big five major banks in the U.S. have bigger derivatives books than they had in 2008. Banks such as JP Morgan Chase and Goldman Sachs are gambling with tax payers money. Under Wall Street’s usual risk evaluation methods, long and short positions are netted against each other. However, every dollar of notional value creates some interdependence. If a counterparty fails, what starts out as a net position becomes a gross position if a counterparty like Lehman Brothers or a European banks fails. A financial crisis brought a freshman Senator into the White House as the first African American president. A new financial crisis may bring a new freshman senator into the White House as the first Hispanic American. Many see Senator Ted Cruz uniquely qualified to become the next president of the United States. Only God knows the future. For more information on politics and the clash of worldviews see: Teapartyculturewar.com End
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