First Sign of World War III?
Posted by Frugal on July 17th, 2006
This week, the world events have taken a worse turn through the escalation of events in the Middle East. Israel & Hizbollah in Lebanon are almost at war. The fact that Bush didn’t restrain Israel simply make the matters worse. The culture of Israel is always two eyes for an eye. While Israel may claim that they are in great danger in the Arabic/Islamic world, I think it’s pretty clear who is the physically stronger party there. But the party with stronger force simply cannot restrain itself from using it carefully. Both parties that are involved are DIRECTLY responsible for the unnecessarily civilian deaths and property damages. Two wrongs cannot make it right. Violence only begets more violence.
I can’t begin to tell you how worried I am over the developments in the Middle East. In fact, ten out of ten times, I would prefer that my precious metal & energy investments dropped like a rock, but have the world stay in peace & economic prosperity, than the other way around. Warren Buffet recently said that he hates to bet against the value of US, which seems to be un-American, but he needs to do what needs to be done, properly allocating and betting the capital in Bershire Hathaway. I can’t be compared to Warren Buffet obviously. But my mentality in betting in gold & oil is similar. Emotionally, I would rather that they don’t work out. Objectively, I must do according to what my intellect concludes.
Why do I put the World War III in the title? I cannot elaborate all the potential causes in this short post because of length. There are many things, each requiring extended posts to explain (which will be posted later), such as Peak Oil, Root of the conflict between Israel & Palestine, US foreign policy and US/Israel relationship, and Huge US debt & deficit, Rise of China & India, all of which are pieces of puzzles that need to be put together for the partially complete picture. Waking up today, another happy sunny day given by God, it’s simply hard to believe anything remotely close to World War III. And yet, my reasoning on the all the potential ramifications on the current events and status around the world, paints a dark picture going forward. I even told my wife, “I fear that our sons will be joining army and going to war”.
Hopefully, in 20 to 30 years down the road, all of you can come back to this very article and comment, and ridicule me however way you want (assuming this site still exists). I truly hope that I will be ridiculed years later, because I will be stupidly ridiculed, but stupidly happy for the world. But right now, by writing this post, I just want to get you to think, and think independently. How everything happening around the globe is all inter-related, and how those events will dramatically re-shape all of our lives. And just maybe, you want to do something differently about where to put your money.
P.S. Please don’t waste your time in commenting on your or my political positions whether it’s pro-Israel or pro-Palestine, etc. on my site, because I will simply delete them. Other non-political or politically neutral comments are welcomed. This issue is far too controversial to be discussed here. Any opinions expressed here are solely mine only, and should simply be taken as personal opinions, and nothing else. I’m only expressing my opinions under the freedom of speech, and reserve all editorial rights for all comments on my personal site. I will delete all politically related comments, even if you side with me. I simply want to make my comment sections to be politically neutral. The readers are encouraged to think independently and read on the issues comprehensively from other sources.
One thing is for sure, I’m totally against all kinds of violence, and my sympathy goes towards all those people who die and suffer unnecessarily.
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I’ve closed the comment for this article. Just want to leave things there. But you can always email me for any personal comments.
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July 17th, 2006 at 7:42 am
This might seem like a really dumb question, but how can US investors “hedge” their investments in the US? All of my experience in investing has been with US investment vehicles (stocks, real estate, etc.). You mention investing in Gold and Oil as betting against the US. What other alternatives are there?
You’ve written several articles on investing in Gold, Silver and Master Limited Partnerships. Perhaps you can bring these (and other) ideas together in one article that explains how to bet against the US.
July 17th, 2006 at 7:58 am
I agree that oil is the place to be during this crisis. There are so many different geo-political forces pulling at the commodity that it’s tough to think oil is going anywhere but up.
Jason, one way to hedge your bet is to go against the market with ProShares double inverse ETF’s. They essentially short the market based on various indices, and you can trade them just like any other ETF. With the economy slowing, world political tensions rising… this might be a good hedge.
-Grant
TheCornerOfficeBlog.com
July 17th, 2006 at 8:47 am
Israle’s retaliation is too ferocious. It completely eliminate my sympathy to it.
How many lives have Israle killed?
July 17th, 2006 at 9:46 am
This is out of topic. But worth reading and reflecting on the insightful article by Marc Faber
http://www.moneyweek.com/file/15199/why-an-inflationary-bust-is-inevitable.html
July 17th, 2006 at 2:54 pm
Jason,
There is an article on investorgeek on betting against $US. Just click on the link above. I did comment on that article, and I don’t think that some of the solutions he proposed is good. Betting against $US can be a very tricky business. But the problem with fall of $US has far-reaching consequences, and even if you can hedge all of $US risk, you cannot hedge many other risks such as inflation and economic recession/depression that will derive directly the fall of $US.
And there is an eternal debate on whether things will unfold as deflation due to slow downs in economic activities or inflation due to the monetary printing by world central banks. The link that BlueDaze posted is by Marc Faber, the best known deflationist. The answer in my mind however is pretty clear. I will need to elaborate in details on arguing my case for inflation. The key question is really “inflation of what?” and “deflation of what?” Once you can answer that logically, then inflation/deflation debate can be cleared up.
July 18th, 2006 at 1:43 pm
“We are only waiting for the Supreme Leader’s green light to take action. If America wants to ignite World War Three … we welcome it,” he said.” Read more here…
Not good…I definitely think things are getting out of hand.
July 18th, 2006 at 5:24 pm
I disagree that Bush should attempt to restrain Israel. I also don’t think the situation there is that critical to the US. We are currently in our own war, which, IMO could be much further along should we have used our firepower more completely and not have been so concerned with the infrastructure of Iraq. The region surrounding Israel is intent on destroying it and the latest conflict (although more severe than many recent ones) is just another in a long line of regional,social,racial and religious conflict that will most likely dominate the region for the duration of our lives. The turmoil in the Middle East is nothing new. The latest events between Israel and Lebanon clearly show the volitility of the region. I think military action is the only way to a peaceful and stable future for the middle east. I plan on buying more Defense Contractor stock this week. Im looking into PPA.
July 18th, 2006 at 5:40 pm
Barrell, I meant restraining Israel verbally by Bush. Wars are the worst activities that human can engage in. If you or your families live in Iraq, Israel, or Lebanon, will you still say the same thing? Look at the bloods & tears in the pictures. Please be sympathetic and compassionate to every human being.
I would probably choose death than investing a single dollar targeting specifically for defense industry.
July 19th, 2006 at 8:57 pm
Frugal,
“I would probably choose death than investing a single dollar targeting specifically for defense industry.”
I think you mean you would “rather” choose death, so don’t buy any. I see good intermediate growth in the sector due to increased spending by the US on defense and with all the heavy use on the military equip and hardware going on right now, there will need to be many maint/repair and replacements in the near to intermediate future. You want to talk about suffering , how about the revolutionary war, the civil war, WW II, now thats some hardship and blood and tears. Thankfully for todays generation, those before us have secured our present status, now its up to us to secure a future for the next generation. And that includes the next generation of Iraqi’s etc.
July 19th, 2006 at 10:24 pm
Barrell,
Thanks for correcting my English. I don’t hide the fact that I’m far from perfect in English.
Money/capital has no eyes, and it only tries to find the highest return. But I try to invest ethically. I think there are things that are far more important than money.
I’m in the camp of pacifist. I believe that there are almost always a better way than wars. The world should not be about battling to secure status. We, humans, can talk over it and choose more peaceful means. We’re (or should be) an advanced CIVILization.