Today’s attackson Moscow are a stark reminder that terrorism can strike anywhere, at any time. Despite the nearly nine years that have passed since 9/11, we are still living in a society largely molded by political events in Afghanistan, Iran, Iraq and Israel. We should only look at the failed Christmas bombing of a Detroit-boundairline to realize that we continue to live in a precarious world.
One of the more impending crises is a conflict between Iran and Israel over Irans nuclear capabilities. Israel has no qualms about launching preventative attacks, having bombed nuclear plants in Iraq and Syria previously. However, the stakes are much higher should Israel attack Iran. A recent simulationwas conducted to anticipate what would happen if Israel did bomb Irans nuclear development plants.
The results of this war simulation are quite messy. Apart from the destruction and loss of life, Saudi Arabias oil reserves are bombed, the U.S. is poised to enter another Middle East conflict and, in the end, Irans nuclear capabilities are only set back by a couple of years.
It begs the question, if political strategists are mounting disaster simulations, should investors prepare their own disaster plans?
The outcome of any conflict in the Middle East seems to have standard market reverberations; the price of oil rises, investors flock to safe havens such as gold and the American dollar. Shares of airlines soften as consumers decline to risk traveling. Would history repeat again? Or would the current weakness of the American dollar and the Euro drive investors to keep a more stable currency like the loonie?
With the oil reserves in the Middle East threatened, the world could also turn to Canadas energy resources as a haven for a world in conflict. Lets hope Canadas trade grows in a peaceful world; unfortunately, disaster planning dictates that we might be the beneficiaries of the worlds misery.