As things look of now,
CONFLICTS WILL ESCALATE
Let's look at the threats first....
then look at how the Free World will react.....
& what it means to the stock market
A. THREAT FROM THE COMMUNIST BLOCs
- The Communist bloc of countries have gotten a breather after 9/11. As the capitalist powers are engaged in fighting the War on Terror, China is becoming more & more stronger. There will come a time when Chinese expansionism will come in direct conflict with the interests of the Free World. I'm not talking of mere market squabbles. There is bound to be conflict.
- Some Chinese allies (N.Korea & others) will take the opportunity. Or rather, they are already flexing their muscles...Taepodong ICBM missiles & what not. But then, these are basically monor compared to Threat
- Russia. The capitalist countries should remember that a large part of their nuclear arsenal is still at large.
- The other rising Latin American communist blocs, like Cuba & Venezuela. Some other socialist countries are already opposing
B. THREAT FROM THE ISLAMIC FUNDAMENTALIST FORCES
- The Taliban is regrouping in Afghanistan Central Asia. The Western Baluchistan & NWFP areas of Pakistan are virtually run by them. As experts agree - another 9/11 scale attack is not a question of if, but when ?
- Iraq/Syria/Mid East Sunni powers have aligned with Islamic fundamentalist forces
- The Rise of the Shia Crescent. Iran, S. Iraq, Syria through to Lebanon. Not to speak of Iran going nuclear.
HOW THE FREE WORLD WILL REACT
Further terrorist attacks on Western & other capitalist powers will follow, FIRSTLY from the Islamic fundamentalist powers. This will definitely mean counter-attacks by USA & its allies. Nuclear confrontation cannot be ruled out, from either side.
Severe oil price hikes will follow
The Communist Bloc will act opportunistically. Their PRIMARY OBJECTIVE would be to cripple the capitalist market, through "dumping", "artificial price control" or othe means
? STOCK MARKETS :
Overall the indices will act see-saw. Not the trend you are familiar with today. But some stocks will rise after the initial see-saw.
Defence stocks. Their rise will be inevitable. Look into companies specializing in these sectors : companies associated with nuclear technology & missile components, suppliers of missile components & aero-defence, imaging & other surveillance companies
Oil stocks. After initial see-saws, they'll rise.
Steel & cement/infrastructure : Construction follows destruction, remember
AVOID : Fast Moving Consumer Goods Stocks, any stocks associated with spending.
REASON : Consumer spending/confidence will decrease
Next, I'll go into DETAILS of future conflicts, theatre by theatre. As well as how the markets will act.
I'll sometimes focus on the present geopolitical scenario, or what's a blog ;-) ?