Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16
The Implications of the Italian Banking Crisis Could Be Disastrous - 22nd Sept 16
TwinLakes Theme Park Summer Super 6 FREE Return Entry for Real? - 21st Sept 16
Has the Silver Bullet Run Out of Fire Power? - 21st Sept 16
Frack Sand: The Unsung Hero Of The OPEC Oil War - 21st Sept 16
What’s Happening With Gold? - 21st Sept 16
Gold vs. Stocks and Commodities, Pre-FOMC - 20th Sept 16
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 - 20th Sept 16
European banks may be more important than the Fed this week - 20th Sept 16
Gold, Silver, Stocks and Bonds Grand Ascension or Great Collapse? - 20th Sept 16
Mass Psychology in Action; Instead of Selling Gilead it is Time to Take a Closer Look - 20th Sept 16
Hillary - Finally Well Deserved Recognition for Deplorables - 20th Sept 16
Fascist Business Model: Reich Economics - 19th Sept 16
Multiweek Correction in Gold and Silver Markets Continues - 19th Sept 16
Stock Market May Turn Ugly This Week - 19th Sept 16
China Is Digging Itself into a Deeper Hole - 19th Sept 16
Yellen’s Footnote 8 Would Put Interest Rates on Autopilot - 19th Sept 16
Central Bank Digital Currencies: A Revolution in Banking? - 19th Sept 16
UK Government Surrenders to China / France to Build Nuclear Fukushima Plant At Hinkley Point C - 19th Sept 16
Stock Market Correction Already Over? - 18th Sept 16
American Economics - 18th Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

Pakistan Collapse Could Trigger Global Great Depression and World War III

Politics / Pakistan Jan 16, 2010 - 08:47 PM GMT

By: Nadeem_Walayat

Politics

Best Financial Markets Analysis ArticleDuring 2009 the 2600 terrorist attacks resulted in the number of deaths soaring to more than 12,000 casualties in Pakistan, compared to the number killed in Iraq falling to 2,800 from the 2008 total of 5,900. The U.S. War in Afghanistan pushed the Taliban and Al-Qeeda over the border into Pakistan that has sparked an escalating insurgency and Pakistan's own U.S. backed un-popular "War on Terror" which is going just as badly as that in Afghanistan, only without the deep financial pockets to embark up on an never ending war that is increasingly sapping what little strength the Pakistan Economy had out of it and now seriously risks the collapse of the state due to the stress of the conflict on the economy and society.


The world appears to be sleep walking towards a mega-crisis during 2010 and beyond resulting from that of continuing and escalating terrorist insurgency fed by U.S. policy, that is spreading like a cancer across Pakistan resulting in the disintegration of the Pakistani economy and by consequence the disintegration of many areas of the state into lawless areas despite the size of the Pakistani Army, this would result in fallout across the whole region and the wider world on a scale of several magnitudes greater than that which followed the collapse of Iraq following the 2003 invasion.

Pakistan populated by more than 170 million people could turn into a black hole that could swallow many more trillions of dollars in an escalating but ultimately unwinnable war on terror that would disrupt not only the economies of the west with hundreds of thousands more boots on the ground, but also the economies of the neighbouring states, especially India, Iran and China much as the war in Afghanistan had increasingly impacted on the Pakistani state and economy over the past few years.

Not only is Pakistan's vast military industrial complex and arms stock piles at risk, but far more deadly than the IED's or klashnikovs are Pakistan's nuclear and chemical weapons that could greatly increase the risks of a series of dirty bombs emerging from within a failed state even if the nuclear weapons themselves remained secure.

Therefore the Pakistan crisis has the potential for becoming a very significant factor when determining the direction of the global economy over the coming years due to both a mega refugee crisis that would emerge from a failed state and the conflagration of conflict across the region, unless action is taken to stabilise the situation in Pakistan towards which the following could form part of:

1. First world military technology such as drone air-craft and satellite surveillance made available to the Pakistan army to enable it to fight a more precise war against the Taliban Leadership without unpopular blanket warfare across regions of the country that only results in the conflict spreading and new recruits for the insurgency.

Therefore Pakistan's War Against Terror needs to be greatly de-escalated rather than escalated, basically a strategy of containment of the Taliban in the Pushtoon areas rather invite more Pushtoon's to join the Taliban as a consequence of Pakistani Army actions. This would allow the rest of a more ethnically and culturally diverse Pakistan to stabilise rather than become sucked into an ever widening conflict.

2. To financially support and reform the Pakistan Government and economy into a self sustaining secular growth machine and as a far less corrupt entity than at present, much as the United States succeeded in turning the collapsed economies of Germany and Japan around following the second world war that would seek to pull Pakistan's people out of poverty and illiteracy, especially aimed at the impoverished youth that are increasingly falling pray to the Taliban ideology of holy war.

The alternative of remaining on the present path risks the already debt saddled western worlds economies sowing the seeds of a Pakistan Collapse triggered Great Depression, much as many aspects of today's economic and financial crisis have their roots in both Afghanistan and Iraq and with even far worse consequences for the neighbouring states of Iran, India, China and perhaps Russia as the conflict falls out of Pakistan's borders.

However at present U.S. and Western focus is primarily focused on bombing the Taliban and Al-Qeeda from the air and enticing the Pakistani army to embark on huge military expeditions against large regions of Pakistan, therefore not learning a single lesson from either Iraq or Afghanistan that the real solution is to win hearts and minds which cannot be done through carpet bombing of towns and cities but rather through building civil society and infrastructure.

Unless action is taken now to change course then we may look back at the present in a few years time and say why did we not do something when we had the chance to prevent the Great Hyper-Inflationary Depression and resulting Global War much as the 1930's Great Deflationary Depression ultimately resulted in the Second World War.

Source: http://www.marketoracle.co.uk/Article16543.html

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market . Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

David
25 Jan 10, 04:19
Who has the money

American Economy set for the second leg down is in no shape to turn any other country around. In fact it will be hard pressed to prop itself up let alone fix Pakistan up.

I see USA in a gambit to run Oil pipelines through Pakistan and Afghanistan that will be blown up on a daily level.

While they are keeping China from getting access to oil at the moment this won't hold much longer .If the second leg down in the US economy comes this year Americans will be out in the streets rioting at the least .

Should the second leg down come in the US economy Desperation will begin in America in earnest.

the wars will be condemned as they should already have been,by the American people.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife