21 September 2007

Loonies


I've been kicking myself this week. Maybe you have, too, but I remember the morning that they launched the new currency of Europe back in 1999. It was pegged to the US dollar, the pre-eminent currency.

Think how different the world was then. There was a modest surplus in the US budget. Osama bin Laden was an unknown figure to most people. The war de jour was an unpleasant experience in Somalia.

I thought at the time it would be a bold stroke to invest in the Euro as an alternative to my dollar holdings. I actually had some at the time, and that seems like a science-fiction world, too. I would have made a bundle selling Uncle Sam short.

Investors dumped dollars yesterday in this unimaginable future. The Euro buys $1.40 in US currency. The lowly Canadian Loonie is in equal in value to the dollar for the first time in thirty years.

You get the currency you pay for, and even dolts like me know that what we have been doing with the world's most dynamic economy is simply not sustainable. Of course, the wise men are not lunatics. They point to the silver lining, and say there is an upside to what is effectively a devaluation of the US currency.

American goods and products will be more attractive. There will be more irritating European tourists. But in the end, you and I will pay for it. But that is the normal consequence. The dollar is held in huge reserves in Saudi Arabia, for the oil, and in Japan and China for the manufactured goods that we love here.

This is hardly a surprise. What is surprising is that they dumping has not started already. It may be that all parties concerned are reluctant to bring down the house. Sooner or later, they will and there is going to be hell to pay.

Maybe it is today. I hold my fellow delusional citizens here in Washington fully accountable, not that it will matter. I just wish I was holding Euros, or at least had stocked up on Loonies at a favorable discount.

Of course we all have our little problems. A pal wrote me from Dulles airport on his wireless device in the middle of the week. He told me he saw the President of Blackwater USA striding grim-faced down the concourse.

He was in a dark suit and headed for the international gates, so there is little doubt where he was headed, and I am pretty sure the briefcase he carried is not something he would entrust to checked baggage, though by the end of the week he will probably be shopping for a larger one to carry additional currency, what with the devaluation.

The story is not over with respect to Blackwater operations in Baghdad. The Iraqi Interior Ministry has wrapped up their investigation and it says the company was “100% responsible” for the shooting of a dozen or more civilians there.

US Government officials demur, and say they need to complete their own inquiry, and there may be mitigating circumstances. They are in a tough position, since Blackwater provides security for almost all State Department movements in the Green Zone, and the diplomats are effectively pinned down without them.

In the beginning, Blackwater was simply the best. They paid top-dollar to the best SEALS and Delta guys, and their services were worth it. Triple Canopy and DynCorp are the other US competitors for the elite segment of the market- and the Aegis Company of the UK is the biggest in-country.

The corporate DNA of Aegis includes a predecessor companies called Sandline, and Executive Outcomes, which specialized in custom regime-change in Africa. Their current line of work is just security, since there is plenty of change to go around.

There is no question, though, that Blackwater had the cachet as the Standard. Like the dollar, that has faded.

The Iraqi version of the story is that Blackwater locked down the city square to facilitate movement of their convoy. In Iraq, speed and movement are life itself. A family driving erratically- and is there any other sort of driving in Baghdad?- set off the "bad guy" reaction in the security detail and the shooting started.

I don't condone cold blooded killing by anyone. But think for a minute of what it is like to be on full alert and sequence the sounds and apparent threat vector. On the one version, it is understandable that trigger-happy cowboys would then slaughter the neighborhood.

But keep hold of critical thinking. The fact that helicopters were called in suggests to me that there was follow-on activity; with so many weapons in circulation, it would not be surprising if everyone within earshot joined in. It is also quite possible that it was an ambush of opportunity, a provocation either inadvertent or deliberate use of civilians as camouflage.

The Bad Guys have a pretty sophisticated information warfare campaign going on, and they use the media with delight and good effect.

The Blackwater commandoes are good- not lunatics- but the best of them are with the Ambassador, not lower-level regular State convoys. The and word is that everyone wants to be looked on as part of the Crocker Detail, and even generally decent police forces can have riots, particularly if they think one of their own is threatened.

Part of the hoopla is designed to restrain US security for exactly the reason you would think- to make Americans working in the Green Zone less secure, and more vulnerable.

The full story is not what you heard today. It does not mean Blackwater is not populated with high-testosterone cowboys. It is, by design. It is effective at what it does. The Maliki governmet wants more control. This public outcry was coming, if not in this case, the next one.

It has already had an impact on security. Like the run on the dollar, it is hard to predict precisely when something is going to drop over the cliff.

Copyright 2007 Vic Socotra
www.vicsocotra.com

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