It Won't Go Away

Most observers have yet to come to understand the dynamics of the situation in the Mid East.

Bernanke was a cheerleader for the economy today, saying the recent surge in oil prices is unlikely to have a major effect on growth or inflation as long as higher prices do not become sustained. Well ya but the clear risk is that they will be sustained for goodness sake, not indefinitely, but over the intermediate term.

We are witnessing nothing less than the birth of a new Mid East. We don’t know just how tumultuous that adjustment may be but we know the course-of-least resistance is for more turmoil, for more violence, for more interruptions in the flow of crude.

This is the risk as we highlighted earlier. Investors would be well advised to work this into the equation while heeding the words of Fouad Ajami, fellow at the Hoover Institution, “In the tyrant’s shadow, unknown to him and to the killers and cronies around him, a moral clarity had come to ordinary men and women.”

It won’t go away, not this time.


Robert Craven