Government says government owns AIG, U.S. weighs invasion of Pakistan to fight Taliban, cocaine trade funds Peruvian rebellion, consumer prices jump more than expected-what happened to deflation? Obama wants more control of financial institutions to ‘protect taxpayers,’ White House readying to join war against Mexican drug cartels, Czechs end U.S. missile treaties amidst ‘large-scale’ Russian rearming…just the latest in your Freedom Under Fire Report!

Barney Frank Says Congress Owns A.I.G. In another inquisition, Congress grilled executives from American International Group (A.I.G.). A.I.G. bonuses were the source of the outrage, with Rep. Barney Frank (D-MA) going so far as to harangue “We are the effective owners of this company” and suggesting a lawsuit to recover the $165 million in bonuses. Edward Liddy, A.I.G. CEO, said that although the bonuses were “distasteful,” they were the result of the company’s legal obligation to honor its employment contracts. Rep. Gary Ackerman (D-NY) said that the taxpayer knows he is the “ultimate sucker” in the A.I.G. debacle. Hopefully these taxpayers realize it was the federal government that took their money and “invested” it on their behalf, making them suckers.

U.S. Weighing Invasion of Pakistan to Fight Taliban. President Obama and his national security advisers are considering expanding the covert war in Pakistan far beyond the current tribal areas to strike at the center of Taliban power in Baluchistan.

Cocaine Trade Funds Peruvian Rebellion. The violent Peruvian rebel group The Shining Path has turned to the cocaine trade to fund a renewed insurrection. As the military and the rebels skirmish for control of isolated coca-producing hamlets, the reports of rising body counts and civilians killed in the cross-fire are mounting. The guerrillas killed at least 26 people in 2008, including 22 soldiers and police officers.

First the soldiers came to Rio Seco, a coca-growing village in the lush mountain jungles of southern Peru. ‘They called us subversives and they opened fire. They shot dead four people at close range, including a woman who was five months pregnant.

Four months later, the guerrillas arrived, accusing the villagers of helping the military. They abducted the village leader, who has not been seen since.

America’s War on Drugs continues to have severe consequences across the world.

Consumer Prices Rising More Than Forecast. The consumer price index rose 0.4% in Feb., following a 0.3% rise in Jan. The gains pushed the core inflation rate up to 1.8%, within the range Fed officials target as their objective. These figures reduce the odds of the feared ‘deflationary spiral’ many projected would follow last year’s asset crashes.

Worried about inflation? Does the Federal Reserves scare rather than comfort you? Peter Schiff was one of the few who predicted the financial crash last year. He predicted the housing crash of 2007. And now he predicts a Treasury and U.S. dollar collapse as our government tries to borrow, inflate, and spend its way out of our current problems.

For practical ways to shield your portfolio from the coming storm, check out Crash Proof, in which he explains America’s problems and points to how you can protect yourself.

Obama Wants More Control of Financial Institutions. President Obama said Wed. that he wants greater regulation of financial institutions so taxpayers won’t be left “holding the bag” when companies fail. Obama derides Wall Street by saying bonuses are a symptom of a culture that promotes “excess greed, excess compensation, excess risk-taking.” What is not discussed, however, is that the simplest way to protect taxpayers from all of these vices is to refrain from taking their wealth and investing it on their behalf in dying companies, i.e. A.I.G.

Obama Readying To Join Mexico’s Fight Against Drug Cartels. The Obama administration is preparing to send federal agents to the Mexican border as reinforcements in the fight against Mexican drug cartels. An easier solution to win the war on drugs overnight is to legalize them. Or we can continue to spend hundreds of billions, militarize the border and police forces nationwide, build new prison capacity, and send military missions across the world to fight producers and cartels.

Czechs Halt U.S. Missile Treaties. The Czech government withdrew treaties committing the country to the U.S. missile defense shield. The missile defense project was heavily pushed by the Bush administration, but has not received comparable support from President Obama, who has thus far refused to commit. Russia deeply opposes the project, which it views as an aggressive encroachment on its border. This is one of the reasons for Russian President Medvedev’s announcement of ‘large-scale rearming.’

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