Bagnoli, Naples, Italy.  Who knew Hell could be so beautiful?

I'm sitting in a flower garden overlooking the Mediterranean.  In front of me is the islet of Nisida, where at his villa, Marcus Junius Brutus (85-42 BC) and his conspirators planned the assassination of Julius Caesar.  Off to the left looms Mount Vesuvius, and in the distance is the Isle of Capri.

On the other side of the hill behind me lies The Solfatara, a volcanic crater filled with boiling mud pools and vents hissing and steaming with sulfuric gasses.  For the Romans, it was feared as the home of Vulcan, the god of fire.

Next to Solfatara lies a crater lake called Avernus, Lake Averno.  For thousands of years, from Homer in The Odyssey, to Virgil in The Aeneid, to Dante in The Divine Comedy, it was revered as the entrance to Hell.

My wife and I are not here to go to hell, but to visit our son who, as a USMC Captain, is stationed at the NATO Command nearby that is running the war in Libya.  Nonetheless, this seems a uniquely appropriate place from which to write this HFR as America is descending into economic and political purgatory.

The Obama administration's policies are causing Americans to pay far more for gasoline and other fuels than necessary.

America is awash in fossil-fuel energy sources with almost 30 percent of the world's coal and 80 percent of the world's oil shale - which contains an estimated three times the recoverable oil reserves of Saudi Arabia.

Canada, with its oil sands, has the world's third-highest oil reserves, after the United States and Saudi Arabia.

New technologies that enable low-cost natural gas production from shale mean that many countries, including the United States, will have gas for centuries at current production rates.

Most countries try to produce oil, gas and coal and sell it on the global market as a way of increasing the real incomes of their citizens, but not the United States. The Obama administration has a hatred of fossil fuels and is determined to reduce their use despite the economic damage.   The President is deliberately making Americans poorer.

It was only a matter of time before one of our men broke down.

On Sunday, March 11, just before dawn, an American staff sergeant walked away from his post in the badlands of Kandahar Province, Afghanistan, went into a nearby village, and methodically murdered sixteen civilians, including women and children. This didn't happen in the confusion of a firefight amidst the "fog of war." It was the brutal act of a veteran who cracked. The deed cannot be excused. But I believe it can be explained.

That staff sergeant-who turned himself in after the killings-is guilty of murder in a degree yet to be determined, but the amazing thing is how disciplined, patient and tenacious our troops have been. Given the outrageous stresses of serving repeated tours in an environment a brand-new private could recognize as hopeless (while his generals fly back and forth congratulating themselves), it's remarkable that we have not seen more and even uglier incidents. 

The problem in Afghanistan isn't our troops - although craven generals routinely insist that everything is the fault of "disrespectful" soldiers - it's a leadership in and out of uniform that is bankrupt of ideas, bankrupt of ethics, bankrupt of moral courage, and rich only in self-interest and ambition.

No doubt who's the HFR Hero of the Week this week, is there?  Who else but Congressman Allen West (R-FL)?

This guy is becoming the essence of pro-American cool.  Pretty soon Allen West jokes will replace Chuck Norris jokes, like "Some people wear Superman pajamas - Superman wears Chuck Norris pajamas," or "Chuck Norris will never have a heart attack - his heart isn't foolish enough to attack him."  Insert Allen's name in these.

On Tuesday (7/19) in response to an attack on him by hyper-lib, hyper-obnoxious Debbie Wasserman-Schultz (D-FL, whose district adjoins West's, and is also the current Chair of the Democrat National Committee) on the House floor, West wrote her a letter that has long been deserved.  Here's the money quote:

"Debbie, I understand that after I departed the House floor you directed your floor speech comments directly towards me. Let me make myself perfectly clear, you want a personal fight, I am happy to oblige. You are the most vile, unprofessional, and despicable member of the US House of Representatives. If you have something to say to me, stop being a coward and say it to my face, otherwise, shut the heck up."

Dem demands that West apologize are thunderous, to which West is responding with a shrug.

At last we have a Republican with major stones, who understands the best defense is a go-for-the-jugular offense, that the way to win is to put your opponent on the defensive, and to stand your ground with no apology.  GO ALLEN!

If a person pulled a gun on you, demanded your wallet, and then said: "I am going to use 50 percent of your money for good purposes, and I am going to waste and mismanage 30 percent, and the final 20 percent I am going to use for my own pleasure and to pay off my cronies who protect me," would you think the robber should be sent to jail or praised as a public servant?

Feel free to alter the percentages in the above example based on your own impressions of how well the government spends your money, remembering that much of the stimulus money went to unions and political allies of Mr. Obama.

And note that Thomas Jefferson said, "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Unless the advocates of ever-more government spending are exposed for the self dealers and/or socialists they are, the economy and our liberties are doomed.

The blistering asset rally of 2012 has run ahead of economic realities in Europe, America and China. It is exhibiting symptoms of a schizophrenic market, with technical indicators flashing signs of exhaustion.

Graham Secker from Morgan Stanley said it is rare for global stocks, oil prices and government bonds to rise in lockstep, and such exuberance becomes a "very reliable sell signal for stocks" once speculators join the party.

Equity long positions on NASDAQ have reached 1.5 standard deviations and long bets on oil are at an extreme of 1.9, according to data from the Commodity Futures Exchange Commission. This is occurring at a time when yields on 10-year US Treasuries are still at 1.96%, signaling depression, deflation, or both.

The historical relationship between bonds and equities has completely broken down over the past six months. "You can't have a sustained period where equities are going up, while bond yields are flat or trending down," said Mr Secker.

One or the other must give, and bears have no doubt which it will be.

The current crisis du jour over the debt ceiling makes me think of Errol Flynn (1909-1959). 

Flynn's best friend was David Niven, with whom he starred in a number of movies.  Flynn was the handsomest and most charming man in Hollywood.  It was impossible not to like him - or as many a Hollywood actress attested, not to love him.

Yet Flynn had a fatal character flaw - his unreliability.  As Niven once commented:  "You can depend on Errol to always let you down." 

Just like Republicans.  We can hope against hope, but in the end, you know they're going to cave.  Trump's assessment looks accurate:  they are doing "another el foldo."

Aside from begging LtCol Allen West to smack Boehner and Cantor upside their heads and ordering them to take the debt ceiling hill, what can we do?

The president is proposing that the government spend more than $3.7 trillion (his budget "cuts" also contain many spending increases). The terms reckless, irresponsible and mad are inadequate descriptions of what he is proposing. There is evidence that once a government lets its debt/GDP ratio rise more than 90 percent, the economy begins to seriously weaken and government spending starts to spiral out of control as the interest payments on the debt grow faster than the economy.
The United States will probably hit the 90 percent threshold within a year (the current level is 68 percent, up from 37 percent in 2008).

Greece has already shown the world what happens when the debt/GDP ratio reaches critical levels. Government services, employment and transfer payments are drastically cut because there is no other choice and the economy goes into the tank.

Mr. Obama has also proposed a number of tax increases in his budget. Economic growth depends on having sufficient saving, which is put into productive investment to create jobs and technologies. If government is grabbing most of the savings of private individuals and businesses through debt issuance, inflation and taxes, the result is economic stagnation and increasing unemployment.

Put on your seat belts because the situation will get worse before the political class will act.

Whenever an old alliance comes apart, our foreign-policy establishment behaves like the spouse who pretends away a partner's ever-more-flagrant infidelities-hoping that patience and indulgence will somehow bring the straying party around. But real life doesn't work that way for lovers or for states. When we look away from shameless betrayals, it only encourages further bad behavior.

And sometimes the situation requires a divorce. With no more support payments.

The worst current case of a supposed ally gone wildly, viciously wrong is, of course, Pakistan, which our government refers to as a "friend" even as the real rulers in Islamabad-the military and the security services-shield the world's most wanted terrorists; support, supply and train insurgents who kill and maim our troops; and cut off our main supply route to Afghanistan (presumably, in thanks for the billions of dollars we send the Pakistanis year after year).

But another, potentially graver case goes largely unremarked, when not willfully misinterpreted: Turkey, a NATO member and long-time ally (at least, on paper), is suffering from increased repression, the step-by-step subversion of its democratic system, and creeping, clawing Islamism.