Credit expansion cannot increase the supply of real goods. It merely brings about a rearrangement. It diverts capital investment away from the course prescribed by the state of economic wealth and market conditions. It causes production to pursue paths which it would not follow unless the economy were to acquire an increase in material goods. As a result, the upswing lacks a solid base. It is not real prosperity. It is illusory prosperity. It did not develop from an increase in economic wealth. Rather, it arose because the credit expansion created the illusion of such an increase. Sooner or later it must become apparent that this economic situation is built on sand.
The strategic synergy between the United States and Israel melds into tactical realities. troops train with their Israel Defense Forces (IDF) counterparts in aerial combat and special operations. Navy ships routinely dock in Haifa, Air Force planes refuel at Israeli bases, and the Marines will soon use an Israeli laser to pinpoint targets. In addition to pre-positioning $800 million of arms and medical equipment in Israel, the United States guarantees by law its commitment to preserving Israel’s “qualitative military edge,” enabling the Jewish state to defend itself, by itself, against Middle Eastern adversaries. As Assistant Secretary of State Andrew Shapiro put it , “Israel is a vital ally and a cornerstone of our regional security commitments,” and, accordingly, the two countries have developed the world’s most advanced anti-ballistic missiles. Together with the X-band radar station in the Negev — manned by the first American troops deployed permanently on Israeli soil — these systems can protect friendly nations from Iranian rockets.