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iraq forecast (bet) no2

  1. I think its pretty well agreed that the markets seem to have suspended fundamentals for the moment and are being driven by War rumours and prospects.

    Therefore a successful forecast of the immediate future outcomes in Iraq would successfully determine short to medium term prospects on the overall market.

    My Bet No 1 (made during the UN/US Iraq WMD weapons standoff) was that the US would ultimately hit Baghdad with Cruise Missiles. Seems obvious now but back then plenty were willing to disagree.

    Currently we have our patriotic short war stockmarket rally going on. In fact, given that the market was generally in downward trend for some time before the Iraq pot really got on the boil and the fundamentals of the US economy have only stayed the same or got worse, then it reasonable to say that there is a fair amount of Iraq War Best Case Scenario built into current market prices.

    So here is my Forecast (Bet No2 if anyone wants to take it..)

    Despite the propoganda view, the War becomes recognised by all as a War of Occupation by the US rather than a War of Liberation. Slowly it will dawn on everyone that whilst Saddam might be widely disliked - even hated by some - the humiliation of the Iraq nation by the US will have created a general uniting of hostility at all levels of the Iraqi nation towards the Coalition forces.

    As the sheer magnitude of the resistance fighting becomes apparent to the US their military response will become more and more aggressive with a rapid escalation in civilian deaths in the major population centres of Basra, Baghdad and other key centres. In fact the US will find it has almost no choice as Iraq uses any means possible to repell the invasion - rather than sticking with the gentlemens Geneva Convention ones in which the Iraqis are grossly outgunned and technologically non-starters with the US killing their conventional and outdated conventional forces by remote control and aerial blitzkrieg.

    People have forgotten when compering this War with the US action in Kuwait in Gulf War MkI that the US truly was liberating a welcoming nation (Kumwait) from an invading force (Iraq).

    In Gulf War MkII the US is the invading force, the Iraqi population are now the victims and the hate will only grow as a whole generation of young Iraq men and women are massacred by the US's superior weaponry systems.

    The Best Case scenario that the US will shortly face is that surrounding Arab nations governments do not collapse under popular uprisings.

    The most likely case is that the US eventually captures a hostile and aggressive country in which a heavily armed and aggressive guerilla force goes underground and continues to fight on with or without Hussein.

    This force begins an endless series of attacks against the occupying military forces in hit and run raids against which US technology is useless and the US targets are numerous and impossible to protect.

    Because of the ongoing resistance the US finds itself;

    a/ unable to hand over control of the country to the UN and

    b/ suffering enormous loss of personnel in guerrilla raids against which it is almost powerless to react. I suspect that this is when most of the US military casualties will occur. ie after the set piece conventional warfare has finished and the US is publically proclaiming victory.

    Of course the worst case scenario would be another Arab country melting down and the US finding itself with multiple challenges to its troops and oil supplies in several countries.

    Now the purpose of this post is to get some thoughts going. Like most people I wish the War had never started but now that it has I can only wish for a speedy and successful outcome for the Coalition.

    Unfortunately history says life rarely works out that way and as investors the profit lies in being able to predict the future.

    this is my prediction.

    What do you think?

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