Sunday, May 01, 2011

After Osama

Osama bin Laden, according to CNN, has been killed in a firefight with US forces in Pakistan and his body has been recovered.

Almost a decade ago, bin Laden, in hopes of, according to some reports, inspiring a jihad and bleeding US financial strength, inter alia, directed the attacks on the Twin Towers and Washington D.C.

Now, only his ghost remains.  The jihad he hoped to inspire has thus far been thankfully quashed, but the US has been bleeding financially for that decade.

What next?

Aside from a substantial increase in Prez. Obama's political capital, which might deflect the right wing's attempts to dismantle the welfare state, inter alia, (and thus indirectly shift market sentiment, to wit, increase negative sentiment on US bonds) direct effects on market psychology and prices (and eventually the underlying fundamentals), at first blush, include:

1) A temporary (duration dependent on, inter alia, announced US policy changes in the next few days) resurgence in $ assets, and consequent decline in Gold and Silver. A rise in US debt market prices. A decline in oil prices.

2) Increased speculation on oversea troop levels in Afghanistan- will they be brought home, will they be redeployed, will they remain the same?

3) Will the Islamic world, in the event troops remain in Afghanistan or are redeployed either in Iraq or Libya, come to the view that US peacemaking after Osama is colonialism in disguise?

4) Medium term, a status quo military presence in the Islamic world, with a significant cause célèbre removed, will not only continue to negatively impact the US budget, it may also increase Islamic resistance (thus further increasing the price of military action), and reduce foreign willingness to finance what may seem more like colonialism than peacekeeping.

The ball is in the Obama administration's court.  Like 9/11, this is a key pivot point.

Much has changed in the US over the past 10 years.  Will this opportunity to change course be grasped, as a similar opportunity was grasped in the aftermath of 9/11?  Will the story simply fade from media consciousness in a few days- signaling an opportunity squandered (or deftly avoided depending on perspective)? What, if any, will the new course be?

From a financial perspective, this seems to me a wonderful opportunity to begin to significantly reduce military expenditure without losing face at home.   US military adventures abroad since 9/11 brought forward the US budget's "day of reckoning" by many years.  Either the US buys some time by reducing such expenditure or the financial day of reckoning will continue to creep forward. 

Without the goal of bin Laden's capture as cloak of respectability, assuming military deployments continue unchanged, the financial day of reckoning might leap instead of creep forward as foreign demand for US debt and willingness to sell oil "cheaply" dries up further.

Ten years ago the world went to war.

What next?

Full Disclosure: Long Gold


FreeGoldAdvocate said...

See for more info.

Osama said long before his death that the US can not kill the idea that he represents. Even if we killed him, thousands of his followers are ready to stand in his footsteps. The idea Osama tried to bring to the world was that the US Government is a corrupt institution. He stated he had no quarrel with the american people; it was our government he was dedicated to destroying. What have we learned in the last ten years about his views? That the US Government controlled by the big banks which own the Fed, are indeed corrupt and to a great degree caused the financial meltdown we experienced in 2008, and still suffer from today. From massive multi-trillion dollar bailouts on the backs of the taxpayers future. To mortgage fraud to heaven forbid, nano-thermite charges placed in the twin towers? And much much more...
Osama was right. We do need to replace this corrupt (captured) government. Like Thomas Jefferson and the US Constitution say, when our government no longer serves the people of the USA, we have not only a right, but an obligation to abolish and replace it with one that serves our objectives. Of course if you are rich banker the US Governmet is serving you very well. However, if you are a common working citizen trying to save for the future, this government is stealing your savings through dollar devaluation. And is stealing your rights by means of laws like the Patriot Act. And much more. Do the research. Learn how you are being lied to and stolen from by the government that pretends to protect you.

g.b.a. said...

As it will be a day for Osama-Obama histrionics, why not consider listening to the building construction experts - and the clarion call of remedial physics?

Benjamin Garrett Architect