Good articles, on an important issue that investors should be paying attention to.
There is the very real possibility that Bin Laden is going to get his "Clash of Civilizations", a worldwide war of Muslims vs. Christians and Jews. It would not be a WWII-type of war. It would be worse: a guerrila war fought with nuclear weapons, that will go on and on till the exhaustion or destruction of one or both sides. Not yet a probability of this horrible outcome, but every passing month with no resolution of basic problems, means the moderates on both sides lose influence. Obviously, this has implications for asset allocation. If this nightmare unfolds, cash and gold will be the only places to hide.
The leaders of the Israelis and Palestinians are old men who have hated each other for decades, and both are committed to a military solution. The U.S. is backing Israel. In spite of PR to the contrary, the U.S. is committed to giving Israel all the tools they need to pursue a military solution, and colonize the West Bank. Likewise, the Arab states are backing Hezbollah and Hamas. Hezbollah has the only army that has ever defeated the Israeli army, forcing an unconditional withdrawal from Lebanon. Hamas is using that successful model. Hamas does not want a compromise, a Bosnia-type division of disputed land. They see a Palestinian State in the West Bank as an interim step to the end of the Jewish State. The insistance on a "right of return" is in effect a call for winning the demographic war, not just in Judea and Samaria, but in Jerusalem and Galilee as well.
A rational U.S. plan to avoid the Clash of Civilizations:
1. Energy: a Manhattan Project-type program for energy independance. This would end the need to get involved in local turf wars, or prop up corrupt client states. If not for oil, we could be as uninterested in Kuwait, as we are when Uganda invades Congo.
2. Palestine: forcing Israel to withdraw from almost all their West Bank settlements, including East Jerusalem. We have the leverage to do this, and it has been U.S. policy for a long time. We need to get serious about it. As long as Israel continues to place settlements throughout the West Bank, inside and between all Palestinian populations, the Palestinians will believe Israelis are not serious about Land-For-Peace. The Wall is doing this; when built it will be the de facto border of Israel, and the settlements outside it will wither.
3. continuing to help Israel militarily defeat Hamas. There can be no compromise with them, they must be destroyed.
4. encourage an exchange of populations, so the demographic frontiers correspond to the military/political borders. Jews and Arabs will never get along under the same government. Arabs inside Israel will always be a hostile conquered people. That means, in addition to Israel withdrawing behind the border walls (creating a large ghetto), the Arab population inside Israel has to leave and give up the RightOfReturn. Whatever land Israel intends on keeping permanently, must have a near-100% Jewish population.
5. War On Terrorism: we need to use U.S. soldiers on the ground, in numbers as large as necessary, rather than using proxies, or we'll never find our enemies. This implies more U.S. casualties. It was a serious tactical error, to try to catch Bin Laden using Afghan proxies.
6. we need to get serious about addressing the underlying social/economic conditions in Islamic countries, that provides support for Bin Laden and Saddam Hussein and Hamas. If we prosecute the War, so that two new recruits join terrorist organizations for every terrorist we kill, then we'll lose the war. Mao said, "the guerrilla army with the People, is like a fish swimming in the ocean. The People feed us and hide us." The only successful model to defeat a guerrila army, is to dry up that ocean. |
