Sunlight Shining Through Cloud

So Much To Worry About

Posted on: February 25, 2011

First, there was a popular uprising in Tunisia.  President Ben Ali fled his country, and allegedly took with him 1.5 tons of his country’s gold.  Western media were sparse, and the story faded away.  But Al Jazeera was there, and the video they captured was sent throughout the Arab world.  That video touched a vein in Egypt where the despot Mubarak was eventually unseated by great masses of people.  Tens of billions of his country’s riches were stashed in his name in Swiss bank accounts.  The Swiss have thankfully frozen those assets.

Then came Jordan, Yemen, Iraq, Iran, and now Libya which seems to be inflicting the harshest punishment against its people.  Qaddafi has claimed that al-Qaeda is supporting his dissenters, and that Osama bin Laden is directly to blame.  On the surface, this seems to be just another bombastic utterance from a madman.

In truth, however, al-Qaeda is licking its chops at the thought of gaining more ground in all of these countries.  And what of al-Qaeda’s mortal enemy, “The Muslim Brotherhood”?  Well, despite rumors to the contrary, the non-violent Brotherhood is doing all it can to help people; all people in the region regardless of religion.

Qaddafi?  He could be gone tomorrow, but not before he and his sons have pillaged untold hundreds of millions.

People of the Arab world, mostly Muslim, are clamoring for change; for freedom from dictatorial rule; for democracy.  The Middle East is a hotbed of protest by ordinary people wanting their human rights and a voice in their governments.  We, the free people of the western world, applaud these movements toward democracy.  It’s what we’ve always wished for, isn’t it?  People around the world should enjoy the same freedoms we do.

But events in these far-off lands have consequences right here at home.  Unrest on this scale makes our stock markets nervous.  This puts at risk stocks held by you and me in our 401(k)s, pension funds and investment accounts.  No crystal balls are able to predict what comes next, but it could be that the markets decline; this just after we’ve had a taste of a return to prosperity following “the great recession.”

Oil speculators were bringing up the price of their products – including gasoline  – well before the mid-east got fired up.  Now, the reasoning for yet further price increases is more easily seen.  This, of course, affects you and me even more directly.

Some Middle Eastern nations have diverse economies.  As a whole, however, the main economic engine is oil.  You well know how important oil is to the world; it literally fuels all of commerce.  The great fear now is that current events will bring opportunity to mal-intents who would destroy the oil fields and pipelines.

As a side note, Saudi Arabia, the largest oil producer in the region, seems to be on stable footing.  King Aziz is well-liked by his people and an uprising there seems unlikely.  Add to that the fact that the American government stands ready to “assist” its ally if their oil resources are threatened.  So say the insiders.

And, of course, we should recognize that Israel is particularly nervous about current events.  It perceives its security to be at risk.  Here again, America stands ready to protect its ally in a heartbeat.  Wouldn’t that be an interesting military scenario?  Putting aside the fact that we have our troops already spread thinly in Iraq and Afghanistan, now we’d have military assets in four countries in the same region.  The geopolitical nuances of this picture should cause our heads to spin.

The chattering class is busier than ever, expressing sometimes insightful opinion,  sometimes inciting rhetoric about all of this; you’ve likely heard lots of it over the past couple of months.  One analyst took a macro view on Charlie Rose the other night.  He was talking about the rise in oil prices not from the perspective of the impacts on our wallets, but of the impacts on nations.  He said, “If the price of a barrel of oil reaches, say, $175, that will have a crippling effect on the Mozambique’s of the world.”

Sure, Mozambique is just one country.  But there are many just like it.  Nations of doomed people will wreak havoc upon their governments and infrastructures and will then starve to death.  The cumulative effect of many third-world countries on the world’s economy should be easy to see.  And the possibility of stronger economies declining as a result is also a logical thought.

The picture being painted before our very eyes is really quite frightening.  We’re hoping for the best, but there’s a little catch in our gut telling us that things look pretty bad.  There are doomsayers who are using current events as substantiation for the fulfillment of prophecy, and they could be right.  Maybe things are lining up for an ‘end-of-the-world’ scenario.

But I just keep thinking about the number of times I’ve heard similar assertions – made both by the well-meaning and the crazy – that turned out to be, well, wrong.  Things do look bad now.  There is much to worry about.  But let’s compare notes again in a couple of months.  My money is on our being in far better shape then than we now fear.

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