Powell Report

GCOR Update For Monday,
August 18, 2008

No Tears For Georgia

Washington and its media lackeys would have you believe that on August 8 the Big Bad Russian Bear decided to roll across its southern border and beat up poor little Georgia. To make matters worse, they did it in an underhanded way by staging its attack while the world was preoccupied with the Olympics.

Unfortunately, the mass marketed account of the conflict was just the opposite to what really happened. Georgia was the aggressor when it shelled the capital of South Ossetia on August 7. It was also an indiscriminate shelling of civilian areas using rocket launchers that sprayed death over a wide area. The attack destroyed schools, hospitals, city streets, residential areas, and unknown numbers of innocent people. It was a slaughter.

I must say that I agree with Russia's decision to strike back at Georgia and push their soldiers out of South Ossetia. Ditto for destroying enough of Georgia's army and equipment to make sure the aggressors won't come back anytime soon.

Pure Washington Hippocracy

Within hours of the inevitable response to Georgia's attack, President Bush accused Russia of violating international law by invading a sovereign nation. What blatant hippocracy! What about the U.S. invasion of Iraq, Afghanistan, and Somalia - to name only the most recent? Weren't they sovereign nations?

The President also accused Russia of breaking international law by supporting a break-away movement in South Ossetia. But isn't that just what Mr. Bush and his neocons did with Kosovo, Bosnia, Croatia, and Macedonia when they decided to quit Yugoslavia and escape Serbian domination? It's amazing how conveniently memory can fade when it gets in the way.

The biggest hippocracy came when the President accused Russia of seeking "a regime change" in Georgia. I could only sputter after hearing that statement. If tossing Saddam Hussein and his government out of Iraq, and putting our team of puppets into Baghdad wasn't regime change, than nothing qualifies.

Baiting The Bear

When I look at what led to the Russia/Georgia conflict, I can't help but think the emergency was orchestrated by Washington. Trying to get Georgia into NATO was certain to provoke Russia. Wouldn't America react the same way if Russia came over to our side of the world and tried to get Mexico to join its military alliance?

Urging Georgia's gullible President, Mikhail Saakashvili, into attacking South Ossetia was an even bigger provocation. What did we think would happen? What would Washington do if Russia talked Mexico into trying to take back Southern California? The U.S. Army would be in Mexico City within a week. Come on, this isn't rocket science.

Washington May Want A New Cold War

The strongest evidence that the Georgia affair was designed to provoke Russia occurred right after the ceasefire was signed. Instead of backing away from any action that could increase tensions with Russia, Washington did just the opposite. The President jabbed the bear in the nose again by talking Poland into accepting an anti-missile defense system, which the Russians are adamantly against. Does that sound like Washington wants to defuse Russian/US tensions to you?

I am a realist, or at least I try to be. When something looks intentional, and it is the work of many politicians, I assume that's just what it is.

In this case, I think Washington and the defense industry want a new cold war -or at least cool war- to keep everybody in money and power. I will have a lot more to say about this topic in the September GCOR, an issue that promises to be one of my most important of the year.

What to do: The Russia/Georgia conflict has already started to push our leading defense stocks even higher than they are. If, as I strongly believe, we have a new cold war in the making, we will see much greater defense industry profits over the next several years. At the least, you should have a stake in the Fidelity Select Defense & Aerospace Fund (FSDAX) that holds most of the top suppliers in its portfolio. http://finance.yahoo.com/q/pr?s=FSDAX

I will end by saying that it probably won't make any difference whether Obama, Hillary (she's another story for this month) or McCain wins in November. They are all political insiders who won't bite the hands that feed them, or turn down the many other benefits that come from being "team players."

Jim Powell