After 9-11 there was a worldwide outpouring of sympathy toward the victims and the US in general. Instead of taking a cold hard look at the facts (i.e. all but two of the hijackers were Saudi, the other being Egyptian), the Bush administration pulled the marketing coup of the century by placing blame on Iraq and used 9-11 as a pretext for invading that country.
Even as the majority of US citizens apparently agreed with this "strategy" (the author excluded), the rest of the world saw the move for what it was: a Bush family feud with Saddam and a a bold play for oil. When France and Germany wouldn't play ball, Rumsfeld denounced them as "old Europe". The "coalition of the willing" moved "forward" and the US acted in a unilateral fashion with a few Brits sprinkled in for good measure.
Well, I'm here to tell you Rummy had it all wrong. It's not "old Europe", it's "new Europe". What it was (and is) is "old US". Old US Vietnam era thinking, and old US energy policies. As Europe invests in nuclear and wind energy and built out its mass transit, the US was building Hummers and its politicians denouncing global warming and hiding its head in the sand with respect to oil.
The fall of Baghdad was celebrated at a cocktail party on Embassy row and was reportedly the hottest ticket in Washington DC. Curiously, the Secretary of State Colin Powell was not present (nor invited). However, coalition of the willing participant Eritrea's ambassador was welcome (where is Eritrea anyhow?). Of course the German and French ambassador's were not invited. Their public outspokenness against the war placed them lower on the totem pole than Colin Powell. So Rummy, Wolfowitz, Cheney and all the other members of the neocons celebrated into the night while sneering at the French embassy across the street.
But who has had the last laugh? The US dollar has simply been hammered - dropping over 50% during the Bush administration's watch. Meanwhile, the Euro, despite the recent Irish vote (go Irish!) has strengthened mightily. Bush's bid to rid the family name of the "wimp" factor has indeed cost the US and its currency greatly. In fact, it is my opinion that the US dollar is no longer the world's "reserve currency". The world currency now is a barrel of oil, which is priced in US dollars. US dollar goes down, oil goes up. But boy, Bush 43 sure proved to Maureen Dowd and all the other "liberal" journalists that he ain't no wimp! Mission accomplished.
Since the US refuses to enact a sane energy policy we continue to send $700 billion dollars a year to oil producing nations. Every time oil goes up $1 a barrel, all the Fed can do at this point is print more money. We already have huge twin deficits, and the tax & spend policies of the Bush years have dug a financial hole that will be most difficult to recover from, especially with the "oil factor" such an inconvenient reality. Besides, why raise taxes for Warren Buffet and multi-millionaire hedge fund managers in order to strengthen the US dollar and bring down gas prices for middle-class Americans? That makes no sense in BushWorld. But that is current reality.
So what does this have to do with investments you ask? What is with all this liberal anti-Bush baloney? Well, first, it's fact not baloney. Secondly it matters greatly with respect to the US individual investor. The US dollar will continue to weaken. The price of oil will continue upward. So too will inflation. So, what do we do Fitzman?
Buy gold - GLD is the StreetTracks gold ETF and holds gold bullion. Gold's recent pullback under $1000 is a buying opportunity as nothing has changed: the US financial industry is in chaos, the twin deficits continue to break records with every passing day, and inflation rates are rising with the price of oil.
If you don't like GLD, try something like DBC. DBC is the PowerShares commodity index tracking fund and holds a basket of commodities, gold included.
Two funds I like for cash are MERKX and PSAFX. The first is the MERK Hard Currency Fund, and the second is the Prudent Global Income Fund. Both funds invest in countries with better financial policies than the US, and MERK invests in gold as well.
Good luck with your investments and don't think for a minute that the politics of Washington, DC don't affect your investment dollars. Those long on the S&P500 are finding this out the hard way.
Disclosures: the author owns DBC, MERKX and PSAFX.