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JohnRgt

Divesting Terror

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Mr. Salsman,

Several investment funds have been pressuring companies to stop doing business in countries whose governments support terrorism. (From what I can tell, most of these companies are in the energy sector.)

Can this practice force the regimes that control the world’s energy reserves to cut back the support they offer to terrorist organizations?

Thank you for your consideration.

Johnrgt

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This is Richard Salsman's reply to the question posed by JohnRgt.

No, it can't. While admirable morally, such "pressuring" is useless, especially while the U.S. government officially "deals with" (i.e., sanctions) such criminal regimes. Mr. Bush, for example, recently said he'd consider selling U.S. aircraft and parts to Iran and allow it to participate in global trade treaties. This is how Mr. Born-Again-Christian treats a member of the Axis-of-Evil, which is building nuclear bombs to be used as blackmail and a threat to us: he turns his other cheek (and ladles-out taxpayer wealth). We must all recognize that the regimes sponsoring terrorism - primarily Iran, Syria, Saudi Arabia and North Korea - are motivated by irrational ideologies, not by some a fear of being dented financially. As in the past, they can always expropriate any funds they need - or count on Mr. Born-Again-Christian to sanction and subsidize them - all the while counting on the anti-nuclear-power environmentalists in the West to keep us dependent on their oil exports.

By the way, those energy companies (Exxon-Mobil? Shell? British Petroleum?) which allegedly are being "pressured" to disinvest from Middle East regimes have ALREADY divested; they did so when they (and Western governments) stood by passively (and shamefully) in recent decades as their assets (oil rigs, wells and pipelines) were being expropriated - as in 1980, when the Saudi government nationalized (stole) ARAMCO. A proper U.S. government would have attacked and vanquished such criminal regimes; after isolating them, it would then punish any firm which was basically dealing with an enemy. Today, instead, we see government punishing the likes of Martha Stewart for selling her stock holdings - or Hank Greenberg (AIG) for negotiating insurance contracts that NY Attorney General Herr Spitzer just happens not to like.

Richard M. Salsman, CFA

President & Chief Market Strategist

InterMarket Forecasting, Inc.

1777 Fordham Boulevard - Suite 202-4

Chapel Hill, North Carolina  27514

EMAIL: RMSalsman@intermarketforecasting.com

WEB: intermarketforecasting.com

IFI is an investment research and forecasting firm that quantifies market-price indicators to guide the asset allocation decisions and trading strategies of pension plans, asset managers, financial institutions and hedge funds.

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