Pakistani Taliban Encircle Peshawar

The Pakistani Taliban have made significant gains against the demoralized Pakistani troops in the Northwest Frontier Province. Peshawar is the capital of the provice and has a population of almost 3 million inhabitants. They have taken control of the main roads outside of the city and can cut off communication. Police in the vicinity of town have given up patrolling the streets at night out of fear of attacks. Times Online

The Islamic militants have only gotten stronger due to the ineffectiveness of the Pakistani government. The government have been signing a series of peace agreements with the militants, which have only strengthen and expanded their reach. Their penetration into Peshawar in recent days shows that force is the only answer in combating Islamic militants.

Pakistani politicians and President Musharraf must come together and realize that this is a real war and that the future of the Pakistani State hangs in the balance. A new domino effect may occur if the US and Pakistan fail to work together. The US has to review its strategy in regards to Pakistan, since the current strategy is not working. What is happening here reminds American support for Fatah against Hamas in Gaza and the Warlords against the Islamic Courts in Somalia. In both cases our friends, the corrupt, secular forces were crushed by these Islamic Groups. I am sensing the same thing here, except this war will take a bit longer.

Do Oil Companies Need More Drilling Rights in Gulf?

Congressional Democrats are asking why oil companies want more drilling rights in the Gulf of Mexico and in other areas when they already have access to large untapped portions of the Gulf.
It is mentioned that The difference between these areas and the government protected areas is that the latter is in shallower waters, making it cheaper to drill. Regardless where to drill. Its not an easy operation. It takes years to explore for oil, the drilling, and making a pipeline also takes a lot of time. Equipment and skilled labor are also needed and there is already a shortage in supply. All of these things make it expensive and there is a possibility that there isn't a lot of oil.

The oil firms could be waiting to see if John McCain wins the presidential election since supports lifting the ban on drilling in the protected portions of the Gulf. CNN In the end, finding new places to drill is a timely affair and amount of oil still located in the gulf is pratically all speculation.

Hi-Tech Brain Drain Causing Major Concerns in the Military

The US military is facing a shortage of engineers and other high skilled workers, who are needed to help construct new military projects. Building advanced weaponry and satellites among other projects are taking longer to get completed and many have been going billions over budget. A few reasons for this is that many young engineers get jobs with Google or Microsoft, jobs that are high paying. It does not help that the military, especially the airforce, have been facing budget cuts despite receiving billions of dollars for new weapon systems. This leads to inefficiency which can threaten our miliary technological superiority in the long term if not addressed soon. IHT

A Strong Dollar only Short Term Remedy to Fight High Oil Prices

I am sure by now most people are tired of hearing and worrying about oil prices, too bad you finally get to hear about it now at the Dailycentre. Within the last week in the news, the Saudis agreed to increase output of oil to an extra 500,000 barrels per day. China decided to reduce the subsidies on oil prices after the G8 and other nations clamored China to raise oil prices closer to market rate in order to weaken demand. China probably decided to do this to empty out the roads in Beijing and to reduce pollution in time for the Summer Olympics.

In the US there has been intense discussion on whether or not the US should drill in the protected areas of the Arctic or in the Gulf of Mexico. The Bush administration has been asking for it for years to drill there. Republican presidential nominee John McCain also supports the drilling. Democratic candidate Barack Obama opposes that solution. Drilling in those places would in theory bring more oil to the American market once it reaches shore strengthening supply. Most democrats and people who oppose this idea believe the impact will be negligble, arguing that the gas in these locations could be gobbled up with in a few years. Tapping the oil will take years before it can be extracted. Depending on the views of experts and analysts, it could take a couple of years to others who say it could take more than ten years. Its impact in the end may just be marginal. These candidates do not have any short term solutions, besides of McCain's support for the 'Summer Tax Holiday' nothing is going to change energy prices.

The one thing that they should be talking about is a stronger dollar. A weak, cheap, dollar makes goods more expensive to the American consumer. A strong dollar would keep inflation and rising prices in check. Oil is traded in dollars, the weaker the dollar is in the global market the more expensive oil will most likely become. As of Friday the Euro sold $1.56 to the dollar in the currency markets making the dollar slightly weaker. Hedge fund managers and speculators are exchanging their depreciative dollars for commodities like oil which provide a currency hedge . Since the Federal Reserve first slashed interest rates in response to the housing bubble traders switched from the dollar to commodities. When they saw signs that the Fed might cut rates they left the dollar. Rasing the federal interest rates is the primary weapon the US government uses to fight inflation and it generally strengthens the dollar by decreasing the supply of dollars on the market. A stronger dollar should be able to reverse this trend and put some downward pressure on the price of oil.

In the case that the housing bubble doesn't peter out anytime soon, then it may be hard to strengthen the dollar by raising interest rates. The Federal Reserve might not be in a position to raise the rates. It could mean more economic problems for this country and around the globe.

If the subprime mortgage mess calms down soon and global economic growth slows down due to the price of commodities and the supply of oil stays consistent, then the price of oil should drop. Higher confidence in the dollar hopefully can lead to less speculating in the commodities market.

The strong dollar appears the only medium short term measure to fight high gas prices. In the long term there are a myriad of different things that can be done but are years away, gimmicks like the tax holiday or releasing gas from the strategic reserves would have negligble effects if any effects at all.