There seems to be a ton of news lately, and for a change, not all of it bad. First, we have the Beijing Olympiad and the Chinese display of cultural prowess. Fortunately for us, we have the best athletes in the world.
But in case you haven’t noticed, the Russians and Vladimir Putin have invaded the sovereign nation of Georgia. There are a number of reasons why: 1) They want oil, 2) They know we’re distracted by Iraq and Afghanistan and can ill afford a third front, 3) They perceive G.W. Bush to be a lame-duck president, incapable of exercising military and moral authority in their sphere. This, coupled with the fact that the Democrats are running a popular, but empty candidate named William Jennings Bryan, I mean, Barack Obama would suggest that we’re unable to respond.
Here’s where it gets interesting. John McCain is perceived by many to be strong on foreign policy. His off-the-cuff comments on domestic issues quite frankly scare me, but he usually knows what he’s talking about when speaking about foreign affairs. This Georgia thing is a much bigger deal than people realize and, after the Olympics are over and our collective national attention returns to real issues, will clearly make Senator McCain the stronger candidate in November. Once again, Senator Obama is too inexperienced to lead.
As far as the economy is concerned, sure the markets are bouncing around. Oil appears to be in free fall, thankfully, closing today a hair above $113. The price of oil and its byproduct, gasoline, has acted like a tax on the American economy. Most people have to make choices. Lately, the choices have been: Do I fill up my tank, so I can get to work, or do I go out to dinner, buy clothes, pay my mortgage (which has also repriced substantially), my credit cards, my car loan, etc. A lower price of gasoline allows people to pay for things they have been letting slide. Continued price easing will result in lower delinquency rates on all types of credit, higher consumption and as a result, lower unemployment as people begin to go back to work to make and sell all of the things people will be able to buy. I’ve maintained for some that Federal Reserve Chairman Bernanke should raise rates, thereby boosting the dollar and bursting the commodity bubble. The slower European economy has accomplished this for him. Keep an eye on inflation however. An improving domestic economy and higher inflation will result in higher interest rates. All of this also bodes well for Republicans in November.