Monday, October 13, 2008

A Bad Observation

Well, it comes down to something I realized a little while ago and it's a little disconcerting to me.

America is facing a big election and there's a whole lot of uncertainty and panic regarding the markets. These are fertile grounds for America's enemies.
The last several challenges to the United States have come in times either of recession or near one. For example:
September 11th 2001 Atrocities: middle of 2000-2002 Recession
Invasion of Kuwait by Iraq, August 2, 1990: beginning of 1990-1993 Recession
World Trade Center Bombing, February 26, 1993: end of 1990-1993 Recession
U.S. Embassy Crisis in Tehran, 1979: recession

Each one of these was meant to directly challenge a U.S. response. In each case, it must be determined that the perpetrators thought that the U.S. lacked the fiscal ability to (and of course will to) respond. In each one of these cases, a new (Clinton and W.) or increasingly unpopular President (Carter and G.H. Bush) was challenged.

1. Entering next year we will be facing not only a recession, but a severe shortage of liquidity. If money is poured out of the markets due to an attack and into commodities, a recession could plunge into a depression.
2. We will have a new President. Most likely this will be President Obama, whose statements regarding the U.S. role in the wider world most likely does not strike fear into those who would do us harm. However, even if he were a hawk, a new and untested President is still the type that America's opponents would like to challenge.
3. There has been some disturbing intel regarding the al Qaeda branch in Pakistan's plans. This may be true and despite our best efforts they may have already launched their operatives.
4. Al Qaeda has gotten beaten pretty badly in the last two years. In addition, their plans have been set back in Iraq, Somalia (though they are on the rise again), and India. Al Qaeda's last major attack against the West were the 7/7 Bombings in 2005. Being flustered for so long, al Qaeda must feel as though it needs to build up its credibility.
5. In addition to the overall economic problems, a concurrent assault on oil facilities could launch oil over $100 again and perhaps to $150. Uncertainty is great for oil spikes.
6. The great addition of federal spending to such an attack to the U.S. would be huge. Cleanup, first responders to start. Next bailouts for industries involved. Next new homeland security spending. Next and military response. Overall we are looking at over $200 billion if recent events are any indication. With our deficit looming at perhaps $1,000,000,000,000 next year, we may be in for a lot of trouble.
7. Iran will likely get the bomb in the next two years, tying American hands further. Looks like it's time to learn Farsi.

Hopefully I'm wrong. However, things are the way they are.

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