Terrorism!

By: Ian Campbell | Fri, Jul 8, 2011
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Yesterday evening it was all over both the American and Canadian news that Al Qaeda was thought to have developed a way to place explosives in the stomach cavities of suicide bombers. This in circumstances where the news reports said that most current 'security screening devices' would be unable to detect those explosives. One report went so far as to say it was thought that if someone with explosives embedded in their stomach cavity 'blew themselves up' while sitting in an airplane, there likely would not be enough explosives involved to cause the airplane to crash. How anyone could reach such a conclusion based on a rumour and generalities is beyond me, but several American Homeland Security officials were interviewed who said they were taking such a threat seriously, and were looking into it carefully.

On the same 'terrorism note', Business Insider is carried an article this morning by Gerald Celente titled 'Gerald Celente On Why The Next Major Terrorist Attack Will Cause Economic Meltdown' - reading time 2 minutes. Celente is, according to Wikipedia, an American trend forecaster, publisher of the Trends Journal, business consultant, and author who makes predictions about the global financial markets and other events of historical importance. Celente warns of what he refers to as the Orwellian effects (recall Orwell's 'war of the worlds' spoof radio broadcast in the 1930's) of a major terrorist attack on a major NATO nation. He thinks that if such a thing occurs:

While I think Celente is somewhat extreme, I do believe we will see not just one terrorism attack going forward, but many of them over time. I am actually more of a mind in the developed countries we will experience a 'death by 1,000 cuts' form of terrorism attacks, where small individual acts of terrorism wreak havoc on the cost structure of developed economies by causing them to spend significant amounts they don't now have available to spend on 'terrorism protection' (e.g. U.S. Homeland Security). See the commentary titled 'The End of Al Qaeda - Hardly!' I wrote shortly after Osama bin Laden was killed where I discussed his 'terrorism strategy' of spending little to cause his targets to spend large amounts. Going forward we may experience one or more major acts of terrorism (i.e. 'twin towers', or worse), but I think this is less likely.

I think terrorism has been, and continues to be, a 'big deal' and on-going potential 'game-changer' in the context of being a reason to own physical gold and, to a lesser degree, physical silver. This to me is because of the psychological havoc terrorism can wreak, and the potential developed countries economic havoc that possibly could arise from it.

I don't think of Celente as one who touts physical gold or physical silver. Accordingly, I find his comments on physical gold and physical silver interesting in and of themselves. Finally, I have little doubt terrorism can and will periodically affect both the price of precious metals and the equity markets, even if it does nothing more than increase their volatility even further as we go forward.

You might want to visit, and perhaps bookmark Celente's Trends Journal website. Consider visiting that website and watching what I think is a 'neat' 6 minute video created in mid-2008 where Celente gives his forecasts he was making in both 2006 and 2008. I found it very interesting to watch this video. You may also.

 


Disclosure: I currently indirectly own, and control ownership of, both physical gold and physical silver.

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
* Canadian Institute of Chartered Business Valuators
** through The Ian R. Campbell Research Initiative

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