Friday, October 10, 2008

GOOD NEWS! (Please Pardon the Sarcasm and Hyperbole in this Post)

The war in Iraq has been a success and the stock exchange in Baghdad is booming! Lower violence, improving economic conditions, and "hopes of a reconstruction windfall" are driving stock prices higher. All of this for the low, low, price of the entire global economy (yes, I am aware of the overstatement in this sentence).


  1. Do you believe that the war in Iraq is a proximate cause of the current global economic conditions?

  2. I believe the war in Iraq is a strong contributor to present economic conditions in many ways, although, and I must stress this, I would not go so far as to say "proximate cause."

    What I do believe:

    * I believe the war in Iraq contributed massively to US debt (undeniable, the most conservative estimates say something akin to $1 trillion), thereby creating exaggerated and mis-priced lending / credit markets that fueled a significant portion of worldwide lending conditions.

    * I believe that the war in Iraq inflated the "fear premium" in commodities markets, especially in oil, significantly reducing the amount of time the lending bubble had to deflate without 'popping.'

    * I believe that the war in Iraq heightened global political tensions and reduced international communications, trust, and good will (not only towards the US, I want to be clear, but overall) which is now appearing to play a hand of significance during a time of crisis.

    * And, I believe that if the US has to borrow massive amounts of money from the international community, the money very well may come with strings attached, such as "withdraw from Iraq" which could be indicative of Iraq's involvement in the crisis, the war's cost, the antipathy the war has generated towards the US, or some combination thereof.


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