Iraq, Afghanistan violence spikes, effects on markets

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Subprime JD's picture
Subprime JD
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Joined: Feb 17 2009
Posts: 562
Iraq, Afghanistan violence spikes, effects on markets

 

Looks as the US will continue to maintain a large presence in Iraq
while growing the military force in Afghanistan. Pakistan is in
trouble so there is a possibility that we will enter that hellhole as
well.
 

Government funding for the wars will increase as more money will be
needed. I project Iraq will again disintegrate into chaos as the sunni
militia have increased their bombing attacks against shia communities.
Just today 7 bombings, 4 of them in Sadr City which is a Shia hornets
nest (Al Mahdi Army base). Rising instability will cause oil prices to
rise. Wild card is Iran, depending on whether Israel attacks their
Natanz nuclear facility, which i believe is a matter of WHEN and not
IF. The question is how will Iran respond to such a attack. 3 possible
scenarios. (1) Iran does nothing out of fear, (2) Iran launches
thousands of missles against Israel and places mines in the persian
gulf, (3) covertly funds insurgent groups in Iraq/Lebanon/US/. I think
(3) is the most likely scenario.
 

So, expect DOD expenditures to substantially rise in the coming 18
months. We are NOT getting out of Iraq anytime soon. If anything, the
depression has increased enlistment in the armed forces. With
supplementals, 2010 military spending should be somewhere in the range
of 900b-1 trillion, causing rates to rise which will hurt the econony even more.



 

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