Free Frank Warner

Iceland's economy is melting; it can't even afford McDonald's

The economy of Iceland has taken so many shocks in the last year that its currency, the krona, is too weak to afford even McDonald's restaurants.

Thousands and thousands of Icelanders lined up yesterday for a last taste of a Big Mac. With the krona down and the price of food imports up, the nation's three McDonald's restaurants closed last night.

In early 2008, one U.S. dollar was worth about 50 kronas. But even as the financial crisis pummeled the dollar, the krona did worse. Now $1 can get 123 kronas. The krona is worth less than half its early 2008 value.

McLesson here. There's a warning in this. Iceland is a first-world country. Where an economy has a weak foundation and heavy debt, even a first-world country can find itself eating a very unhappy meal.

Frank Warner

We don't actually like Zelaya, do we?

Just to disarm the demagogues of Venezuela, it made stategic sense for the new Obama administration to complain about the exiling of former Honduran President Manuel Zelaya. But it's almost creepy how our State Department has followed up by pressuring the constitutional government of Honduras to accept Zelaya's return to power.

There are conflicting reports on whether Zelaya will get the job back before the Nov. 29 election. Unless someone can show evidence he was removed illegally, Zelaya should step aside and abandon his dream of ruling for life.

Frank Warner

30 members of Congress investigated for corruption

Only 30?

Frank Warner

Yankees beat Phillies in Game 2

It was a good game, but the Phillies lost this one 3-1 to the Yankees. The World Series is tied up at one game apiece. The Series moves to Philadelphia tomorrow.

For you Australians: The baseball team that wins four games first wins the World Series and the World Championship.

Frank Warner

Front-loaded health-care ‘fees’: Who believes that $39 billion won’t be spent before 2014?

One way the Democratic leaders make the health-care bill look less expensive than it is, is to impose $13 billion in annual “fees” on brand drugs, medical devices and insurance companies starting next year, but to delay the actual health-care expansion until 2014.

That would be $39 billion saved up for health care by 2014. But considering the track record of Congress in the last 40 years, who honestly believes Congress wouldn’t spent that $39 billion on other things long before the health-care program kicked in?

It would be an interesting experiment in temptation. I doubt Congress could resist. The early money Pelosi and Reid tossed in to “balance” the proposal just wouldn’t be there.

Frank Warner

Pakistanis may have clue to bin Laden’s location

Bill Roggio and The (London) Telegraph report that Pakistani soldiers found something intriguing five days ago:

The Pakistani Army also announced that it had seized control of an al Qaeda training camp when it took control of the village of Sherwangi on Oct. 25. Among the items found at the Sherwangi camp was a passport belonging to Said Bahaji, one of the al Qaeda operatives who participated in the 9/11 attacks on the US.

Bahaji was close to Mohammed Atta, the tactical commander of the 9/11 attacks. He was also an aide to Ramzi Binalshibh, who served as the link between 9/11 mastermind Khalid Sheikh Mohammed and Atta.

Cave near? This was in Sherwangi, South Waziristan, Pakistan, less than 100 miles from the Afghanistan border. Could Osama bin Laden be far?

Frank Warner

When Glenn Beck and Joseph Stiglitz agree the dollar is doomed

You might get the feeling we're in trouble. The other night, I heard Glenn Beck ranting about how all this debt is about to kill the U.S. dollar. His advice: Buy real estate.

Now, from the other end of the spectrum, economist Joseph Stiglitz is saying substantially the same thing.

THE FEAR from some debt holders (China in particular) is that the U.S. government will purposely try to raise inflation—or be soft in resisting it, for the obvious reasons. I would normally think these concerns to be exaggerated. “Inflating” away debt is not painless. And if the Fed tried to do so, our foreign creditors would immediately demand higher interest rates—the only way to collect the real value of what they are owed.

The Fed, of course, right now wants to keep interest rates low because it is worried about the recovery. The only way to offset our foreign debt holders’ demands of higher interest rates would be to start buying up our own debt (the same T-bills the Chinese buy) to ensure our interest rates stay low. But this would only make the Fed’s balance sheet worse....

Some have suggested that China is dependent on exports to the United States. But that may be less true than some Americans believe. Formerly, there was the belief that the U.S. financial system and its monetary/fiscal policy were such that whatever was lent would be repaid, and with “sound” dollars. That confidence has now been eroded. Instead, Beijing could provide the finance that would enable Southeast Asians, Europeans or Africans to buy its goods—or even to allow the Chinese themselves to purchase the goods made in China.

Stubborn numbers. Beck expects the Chinese to start buying up U.S. real estate, including the oil fields we've never touched. Stiglitz says the Chinese are more likely to buy inflation-indexed U.S. bonds to hedge against dollar inflation. Either way, something's about to give.

I try to blend caution with hope. But my beef with Democrats for the last few decades is that their leaders almost never look realistically at numbers. And now I can't see any way the numbers add up to anything good for the U.S. economy.

Buckle your seat belts. Oh, and there is a rainbow at the end of the bumpy ride.

Frank Warner

John Kerry pressures Law Library to say Zelaya is lawful Honduran president

Ed Morrissey:

A month ago, the Law Library of Congress reviewed the removal of Manuel Zelaya from his post as President of Honduras, an act that the Obama administration called a ‘coup’ and demanded reversed for its illegality.

To the embarrassment of the White House and State Department, the Congressional body determined that Honduras acted lawfully in removing Zelaya for his crimes against their constitution, although they determined that his exile broke Honduran law. Now John Kerry wants the Law Library to retract its findings, apparently trying to rewrite history to hide the facts of the case.

Just why are American Democrats so interested in legitimizing a former Honduran president who violated the constitution of Honduras by proposing the end to term limits? Why is John Kerry so bent out of shape he wants dishonesty from the Law Library of Congress?

And will the next administration seek to disbar or imprison any law librarian who succumbs to such pressure?

Frank Warner

Phillies defeat Yankees; Cliff Lee pitches a magical game

Pitching perfectly and catching balls without looking, Phillies pitcher Cliff Lee put on a magical performance last night at Yankee Stadium.

The Philadelphia Phillies, Champions of the World, are up one game to none over the Yankees, who failed to score an earned run last night. Final score in Game 1 of the 2009 World Series: 6-1.

Notice how many Yankees fans left the game early? That's bad luck for the Yanks.

Frank Warner

World Series begins

For the first time in six years, TV commentator Tim McCarver will have a reason to mention the New York Yankees during a World Series.

Frank Warner