Before we start on this topic, you must read the full article by Stratfor (a leading geopolitical economic, political intelligence agency).
The article hints that there may be another conflict or “war” on the horizon between Israel and Palestinians (Hamas). The trigger could possibly be the vote on the Palestinian statehood which is due to take place in September. Also the fact that the neighbouring countries, such as Syria and Egypt are going through internal strife, which is creating great political and economic instability in the region.
The main trigger in Palestine would be the divide between the Palestinian people, the two political groups; Fatah and Hamas. Fatah is favoured by the western governments due to its secular ideas, whereas Hamas uses religion (Islam) to lure people into its agendas, and has become the dominant political force in the recent years. It will be in the interest of both of the political parties to force their agendas and form the government if the Palestinian statehood formalizes. “Whoever controls the state, defines what Palestinians are” sums it up very well.
Historically, Egypt has played an active role in the politics of the Middle East, and it was one of the first nations to announce truce with Israel. If the radical movements begin in the region, it will be difficult for Egypt to not intervene in the region, given that majority of the Egyptians do not see Egypt’s relations with Israel favourably. And we may have another major conflict in the region that will spread from intra-country to inter country.
Now this is where the twist happens. The global political situation is not looking any rosy either. China came out last month to scold the U.S as “addicted to debt”, and Russia called U.S as a “parasite”, and the ongoing Euro debt crisis, with Germany the lone soldier trying to calm everything down. We are seeing governments playing the blame game, consequently increasing tensions between the already stiff relations.
Per the analysis by Todd Harrison (Marketwatch), the “% decline in the S&P before the September 11 attack is precisely is the same as what we have witnessed in the last three months”. And I could not agree more. The concern for a terrorist attack is more tangible than ever before and if that were to happen, we would see the global economies “tank”, and with that we will see a worsening recession, even depression. This may force another war.
I have come to similar conclusions myself over the last six months. The financial and social situation right now much resembles the pre-world war I and world war II scenarios (minus the trigger points). The economy was battered before World War II. I remember reading about the wars during my high school years and looking at the pictures of people, battered and exhausted, waiting in line to get food and water, since they did not have enough money to survive. The situation is similar in the U.S, however the idea is not main stream yet. (It took the market almost 6 months to figure out that there was a possibility for the U.S to default on its sovereign debt, it will take even longer for the market to realize the increasing social problems in the U.S). There are 45.7 million people in the U.S that currently (May 2011) rely on food stamps. For comparison purposes, the numbers increased by a whopping 4.9 million from compared with May 2010, and increase of 1.105 million people from April 2011. This represents almost 14.5% of the total population succumbing to equivalent of soup kitchens of pre-world war times.
Do you see a trend?
Israeli-Arab Crisis Approaching (Startfor)
Is the market forecasting war? (Marketwatch)
Food research and action centre (FRAC)