n
times of political instability financial capital leaves first; hard assets
in the form of hard currency, gold, silver, platinum, and diamonds, leave
second; and human capital leaves last, often with personal property strapped
to its back or stuffed into suitcases. Land, meanwhile, never leaves.
This has always been true, but it has become even more true in the electronic
age and the emergence of “quick-silver capital.” In other words, the most
sensitive leading indicators of political instability are a region’s financial
markets. By those standards, widespread predictions that a second Gulf
war would cause “instability in the region” turn out to have been greatly
exaggerated.
Let’s
say you’re a dove who happens to be managing his own portfolio, and like
most doves you have been dutifully reading the New York Times and
concluded, based on their reporting and analysis, that Operation Iraqi
Freedom would cause a terrible destabilization in the states near to or
adjoining Iraq. In fact, you placed so much confidence in the “newspaper
of record” that you decided to pull all of your capital out of the Middle
East. Here’s what you missed:
In the month following
March 17 (the day of Bush’s final ultimatum to Saddam Hussein), Egypt’s
stock market, the CMA, rose by 5.8%; Israel’s TA-100 gained 15% gain;
Turkey’s ISE National-100 rose 17.8%; and Iran’s TEPIX climbed 6%. BuzzCharts
would like to point out that this represents only one month’s gain. Good
thing you didn’t short these markets.
Buzzchart’s conclusion:
Operation Iraqi Freedom not only created higher asset values in American
and European markets, but it created wealth in the Middle East as well.
Does anyone know the name of a good stockbroker on the Korean Peninsula?
—
Jerry Bowyer is a talk show host on WPTT radio in Pittsburgh, Pennsylvania.
He can be reached through www.BowyerMedia.com.
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n
times of political instability financial capital leaves first; hard assets
in the form of hard currency, gold, silver, platinum, and diamonds, leave
second; and human capital leaves last, often with personal property strapped
to its back or stuffed into suitcases. Land, meanwhile, never leaves.
This has always been true, but it has become even more true in the electronic
age and the emergence of “quick-silver capital.” In other words, the most
sensitive leading indicators of political instability are a region’s financial
markets. By those standards, widespread predictions that a second Gulf
war would cause “instability in the region” turn out to have been greatly
exaggerated. 