Geopolitical risk and the terror in your pocket

One thing you will hear more about this year is ‘geo-political risk’ and it spans many sectors and countries. One example that instantly jumps to mind is Nigeria and the Niger Delta. Oil hit $100 a barrell and this was blamed on ‘geo-political risk’ because of the likes of MEND who are the ‘movement for the emancipation of the niger delta’ (mentioned in a previous post), anyways, they go around bombing pipelines etc. and this causes panic in the market.

What… me worry? (famous line by Alfred E. Newman of MAD Magazine) something that really bothers me is things like oil at a hundred dollars a barrell because of a ‘supposed fear’ in the market, for every time something happens that threatens oil has there ever been an actual hold put on supply? (other than in the 70’s and we can’t really compare the new millenium to the way it was back then)

So basically the oil industry has a permanent choke hold on prices because all they have to do is prepetually cry wolf!

watch a film called ‘who killed the electric car’ and then decide if oil – which is coming from below the ground and into our atmosphere and giving us global warming etc. – is even worth all this news hype and hassle.
Consider another option, imagine if terrorists stopped actually doing things like blowing themselves up and went for true terror tactics, like poisoning water supplies? or blowing up ports (on islands like here and the U.K. that would cause some serious hassle), telecommunications buildings etc. what happens economically from those actions? The 9/11 market shake up could have halted an upswing, would another such attack halt a downswing or aid it even further?

The fact is that geo-political risk isn’t even about terrorists any more, maybe I have watched Fox News too often… Its about democracy gone wrong, how many countries are currently contesting elections or have elections at risk? Georgia, Pakistan, Kenya to name a few. Funny enough even the USA doesn’t have a democratically elected president and they went to war to impose democracy on Iraqii’s who I don’t believe really wanted democracy any more than we in the west would like dictatorship.

Another disturbing fact is that if you were to make a map of some of the richest places in the world in terms of natural resources and then make a map of all wars at present you would see that you are looking at nearly the same map.

The DRC (Democratic Republic of Congo) – former Zaire – has diamonds and war. Zimbabwe has starvation, a dictator who is a joke because he can’t even do a decent job when there is nobody to stand in his way, and gold. Sudan…. well… the fact is that Sudan doesn’t really have much of anything hence the world community has allowed hundreds of thousands to die before taking any action. Nigeria has MEND and Oil. Iraq has war and Oil, Iran might get a chance to follow suit, especially if they keep making ‘threatening actions’ towards the US Navy (todays ‘breaking’ news). On that last note, shouldn’t the Iranians be welcoming US military with open arms? Oh darn it! I almost forgot, the US backed their former enemy Hussein in order to fight them and then there was the whole Reagan Iran/Contra scandal… well, maybe relations there have been soiled after all.

Then there is the likes of Kim Jong Il who has gotten away relatively lightly even though he is a lunatic who’s daily leadership activities consist of watching martial arts movies and spreading propoganda, like the time he finished 18 holes of golf in 19 shots… and the funny bit is that I’m telling the truth about that. He is actually within range to blow up California with a few nuclear bombs, remember, the only time before 9/11 that the US got seriously attacked was in Pearl Harbour, Asia is a much more realistic threat than Saddam Hussein ever was. Thats why all the Japanese were put into prison camps in California during the second world war, a fact that doesn’t seem to make it into history books. Until recently California was the 4th largest economy in the world, the state of California all on its own, so imagine what that might mean if it got nuked? We’ll be too busy establishing democracy elsewhere to save the folks back home!

My final note on Geo-political risk is comparative. If you had a non-democratically elected ruler who killed 183 people 20 years ago should he die for that? If you say ‘yes’ then you are talking about Saddam Hussein. If you have a non-democratically elected ruler who is responsible for the deaths of 700,000 people in the last four years should he die for it? If you answered ‘yes’ then you have a bone to pick with George Bush

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