Gullible Americans: 'Axis of upheaval' poses unseen threat

Gullible USA, Americans

Obsessed with financial crisis, U.S. ignores security risks at its own peril
By Paul B. Farrell, MarketWatch
Last update: 7:03 p.m. EDT April 6, 2009

ARROYO GRANDE, Calif. (MarketWatch) -- You're in denial. You know massive new taxes are coming. With trillions in stimulus and deficits, once again we're like addicts with stolen credit cards, on a rampage.

But soon reality will hit. External threats, unstable nations, terrorists and global warfare will demand action, reenergize our outrageous war economy and force a substantial increase in defense spending. See previous column.

Get it? The future of our economy, markets and banking system is no longer in our control. Our destiny is now inextricably tied to unknown, unpredictable external events and people, to the forces driving global politics and to fanatical enemies. In the near future, our domestic decisions may have a 10% influence on our destiny, but 90% will be in the hands of enemies fueled by hatred and the global economic meltdown. And it will get worse.

"Forget Iran, Iraq, and North Korea, Bush's Axis of Evil," says Niall Ferguson, a professor at Harvard and author of "The Ascent of Money: The Financial History of the World." Writing in the journal "Foreign Policy," Ferguson adds: "The bad news for Bush's successor, Barack Obama, is that he now faces a much larger and potentially more troubling axis -- an axis of upheaval." This axis has at least nine members, including China, Russia, Mexico, Afghanistan and Pakistan, he says




Obsessed with financial crisis, U.S. ignores security risks at its own peril
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Investors Be Wary of Stocks

Investors can still lose a lot of money in the stock market, but US government bonds aren't the solution either for those seeking safe havens, Pimco's co-CEO and co-chief investment officer Mohammed El-Erian told CNBC.

"Certain bonds aren't worth owning, like government bonds for instance," El-Erian said, adding that gaping deficits will force governments issue more debt.

"I am very underweight equities," he said, adding that he has cut his exposure to stocks to 30 percent compared with around 60 percent in normal market conditions. Pimco is the world's biggest bond fund.

"Fundamentally we are in a volatile journey to what we call the new normal, the new destination. The world is changing," El-Erian said.

http://www.cnbc.com/id/30085573