Bathos Number 2:

Date: Thu, 13 Sep 2001
Status:   

*I am writing this as I await some European input at about 400 am my time,
which is indicative of the current conditions to prompt me out of bed at 300
am - especially for those who know me.

*I am struck that Europe does not understand the current situation in the
Untied States.  They seem to perceive the scope of the disaster but not the
implications.  It is being put on the scale of an unusually large Harrod/IRA
or Basque or PLO/Israel situation - a grime welcoming of the United States
into the realm of terror that the rest of the world has been embroiled in
for decades. Where the US is just becoming aware of hard and terrible truths
the world has known for a while, just a grim welcoming to a rather
nihilistic brotherhood.  Europe does not appreciate that this is being
perceived in the US as an act of war, with that sentiment becoming the
central tenet as time goes on.  NY alone will dis-enfranchise itself from
the Union and attack someone if the US does not pursue a war policy.  The
problem with "who" is not that much of importance as Europe feels as any
"who" will be off-shore the US,  while situations in Europe and the MIdeast
do not have that luxury.  The US is strongly gathering the consensus that
burden of proof will be placed on not only those terrorist organizations
suspected but also the nations that host them.  The US will neatly sidestep
the concerns about "assassination and extra-territorial anti-terrorist work
by simply and powerfully putting them under the Articles of War, be they 30
guys in some hell hole in Afghanistan or a nation like Iraq.  Also the US
will be quite willing to make mistakes, even striking the wrong foe as it
will feel totally justified to strike not only those who actually did these
deeds and their host nations, but also any who might have done these deeds
or possibly can do these deeds in the future.  The US under the Articles of
War will not wait for another terrorist group to fill the void the
elimination of one particle terrorist group may leave in the next few
months.  Frankly, the war will entail a 2 to 3 year eradication of all
terrorist organizations with the ability or organizational strength to harm
the US domestically.  This puts the upcoming effort on a scoop that dwarfs
Desert Storm and it is this scale which is not being appreciated in Europe,
for , cynically put, the US is about to move the war zone off-shore to
Europe and the Mideast  and Afghanistan.   As Bismarck informed the German
General Staff as they prepared war plans against the US, "the US is not a
country, it is a continent".  Current measures against domestic travel and
commerce will be simply transferred to the international borders.  A key
index will be US airline industry stocks, which will likely first drop about
75% before recovering, but with bankruptcy of at least one major carrier.
This will be perhaps the most sensitive indicator of the success and
progress of this evolution.  There is good odds the Canadian borders will be
closed unless Canada aligns itself firmly with the US in this endeavor,
coordinating immigration and border policing ability.  As it is now Canada
has the illusion it can write their own policy as a partner in the North
America  continent and will pursue such independence, but will be quickly
brought back into the imperial sphere of the US once they see the US borders
start to shut.  In the meantime Americans will start to travel and conduct
trade inter-state in ways more familiar to Russians, with travel documents
and checkpoints - but that is so against the sensibilities of the US that it
will be transferred to the North American borders.  In all Europe and even
Canada, do not understand that the US will not accept the current realities
but will vigorously re define reality to suit the US.  This will be a far
more traumatic situation for Europe and Canada than is now being priced into
the markets.  Only the UK seems to understand, perhaps awakening old
imperialist memories and a deep national memory of what is to be done and
how - or at least enough of a memory to understand and anticipate what the
US will do.

*basically the US is moving to Imperial model of world governance.  A superb
book which will explain it all for you is "The Cash Nexus" by Ferguson, his
book being an anti-thesis to the late 80 model of Paul Kennedy "imperial
overstretch".  Ferguson makes a compelling case that this is the only way
for the US to operate if globalization is of any importance to US interests.
I think his thesis was proven Tuesday.

*the process of shift to imperialist power from hegemonist will be painful
and challenged both internally when body bags return to the US and
externally as the likes of France realize that they have completely blown
the window of opportunity to have input to what the US should do.  Israel
also will be shaken and shocked as they discover that their role as the
anti-terrorist merc for the US is not only no longer needed but they are
fired for cause.  The World Trade is not only a US intelligence failure but
also a serious Israeli intelligence failure.  Israel, like almost all
countries except the UK has dangerously taken the US fat happy quasi
hegemonist isolationist stance as a given.

*it should be remembered that the bible of imperialism was written not by a
Brit but by Thayer Mahan, "The Influence of Sea Power upon History 1660 -
1783".

*immediately there will likely be a rally in US equity, as shown with the
tentative moves in Japan and Europe today and yesterday. But the fact few
perceive clearly what is occurring here as depicted above will then see what
is seen to reflect slowness and indecision by Bush, but in reality it is
that a final and irrevocable monstrous shift is about to occur, a massive
change which will define the next 200 years of US history after the first
200 years.  It would help if Bush could talk and empathize more, show more
respect for his constitutional role, but I have decided that only effects
the immediate next month or so of trading.  Bush is now in the flow of
irrevocable historical flow.  So after the brief day or two  of rally as
they rally around the flag in patriotism based on old standards and small
perceived solutions, the incredible monstrous event and the monstrous
implications will slowly become apparent.  I have absolute no illusions when
I say Imperial United States in terms of ofshore manpower, military might
required, action, and harm's way.  IN the next two decades the growth
industry will not be high tech or internet or finance - but public service,
similar to models like the British India Company and Romans spending time
running Spain before returning to the Roman Senate.  So it is likely that
the risk as to whether or not the US can make this necessary shift will
become apparent and it is very possible that a year or two of markets
similar to the mid 70's will materialize, to rally on only after success in
this awesome mission is shown to be well on the way to be realized.

*this also means the correct geographical unit to calculate the US deficit
and surplus is the US GDP plus all global trade, a political unit about 3
times bigger than the US GDP.  Then, when seignorage rights are calculated
along with tax flow in the US, I would say that as long as trade does not
drop significantly from this disaster, the US is not only still in surplus
but is dangerously so in surplus.  The UK, when it managed such a system
would dispense the necessary fiscal flow through, basically, war.  Now the
US will dispense this flow first through war and then through trade.

* the World Trade Center destruction will rank as the most important
milestone for the United States of America after the writing of the
constitution.

*the downside is that the US does not take this step, but perceives itself
to be weaker and smaller than the realities and succumbs to defeatism and
becomes inward looking.  This would be a calamity not only for the US,
likely resulting in a depression and exposing us to a barrage of such
disasters and attacks with a clear terrorist victory as a police state is
imposed on the United States, but would plunge most of the world who were
just starting to pull into the light back into darkness.  For the sake of so
many, for women in Afghanistan being stoned by Taliban  to butchery in
Africa, and on and on and on, the US must take on the next chapter of the
City on the Hill and start to distribute the wonderful God guided mission of
the Last Great Experiment on Earth to the rest of the world.  Anarchy,
suffering, misery, and disaster is the only other option remaining.

*It should be remembered that at the peak and after establishing the British
Empire, Gilt perpetuals traded below 1%.