re Islamic revolutions:
Unfortunately, that's likely to be true. The driving force for social unrest everywhere, is not a demand for democracy. Americans might wish that were true, but it's just wishful thinking.
The driving force is economic. Specifically, it's high food and fuel costs, which push marginalized people to desperate solutions. And high food and fuel costs aren't going to get better, anytime soon. Absent a global recession, oil will stay at or above $100/b.
Further, throughout the Muslim world, radical Islam has positioned itself as the leading alternative to the status quo, and the champion of Muslim nationalism. The other alternatives are disorganized and/or have little popular support. I wish this weren't true, but it is.
So, most likely, we will see more governments overthrown. All the new regimes will be more Islamic than existing governments. Some of them will be in oil-producing nations, and some of them will be rabidly anti-American. We will see more nations fragmenting along ethnic/religious/tribal lines, like Somalia and Libya have. Given our track record in Afghanistan and Iraq, U.S. military intervention just speeds up this process of national disintegration. Again, I wish this weren't true, but I don't see anything likely to stop this trend.
For investors, it means there are major risks out there, not yet in stock prices. Wait for them to be on the front pages, before taking any new long positions.
disclosure: as I've been since April, I am mostly cash, with a modest short position (in semi-equips and solar). |
