Another Milestone Passed....
here.
But at least we're "safer" now, right? Errr, maybe not. (Cue the talking-point retort: "But there was terrorism before the war in Iraq!")
Those National Intelligence Estimates are specializing in pesky truths, aren't they?
But at least we're "safer" now, right? Errr, maybe not. (Cue the talking-point retort: "But there was terrorism before the war in Iraq!")
Those National Intelligence Estimates are specializing in pesky truths, aren't they?
posted by The Cunning Realist at Sunday, September 24, 2006
3 Comments:
yep that's exactly the talking point they are
trotting out...
my prediction...the republicans hold onto congress.
a month later, the Iraqi government falls.
You are a wise man....I wouldnt be surprised by that outcome.
If the GOP retains the next session of Congress, all indications point to further escalation with Iran. If this is the case, and cooler heads continue to capitulate, be assured that action on Iran will result in the price of oil doubling and likely tripling through a mix of market jitters and oil boycotts. This in addition to increased social and security volatility in the Middle East, Indonesia, Malaysia, South America, Mexico and Europe.
How many U.S. households and businesses can withstand $9/gallon gas and high 3-digit utility bills? The court economists may assert that these price shocks can be absorbed into the economy, yet an absorption theory must assume continued liquidity from the Fed and offshore bond investors.
The big winners will be placing marks on higher oil, but that horizon may be wildly unpredictable.
One likely outcome is world market destabilization.
Bond markets get the jitters.
Interest rates climb in a climate of volatility.
Meanwhile, household economies based on x% mortgage (and other debt service), y% fundamentals and z% energy costs find their budgets collapse because of spikes in x and z and upward pressure on y. Business responds with payroll cutbacks. Soon we're looking at a major spiral into recession and beyond.
Can the U.S. and world economy weather this?
Of this I can be fairly certain: a shift in Congress to Democratic majorities will put the chill on further escalation. A strong Democratic congress is going to reconstitute Constitutional powers of oversight. Perhaps even the Fed will arrange for a 'soft landing'.
I believe the Republic can withstand a Democratic congress with a much better outcome than the manifesting scenario.
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