Egypt Is Just A Harbinger Of What Is Coming
For months I have been warning that the Mideast is about to explode and there will be ramifications to US real estate. Now we are there. While it is highly likely that the Egyptian army will prevail, and the Muslim Brotherhood will be crushed, the turmoil will not suddenly stop. They will likely go back to and underground battle for many years, terrorist tactics and continued threats to other governments in the area. What we are seeing in Egypt, Syria, Jordan, Lebanon and the whole of North Africa, is nothing less than the ultimate war of Sunni vs Shiia, and Iran vs the monarchies and Israel. This is the final stage of the Islamists vs the secularists and the Sunni. Unfortunately Obama and Hilary have never understood what is really occurring and chose to sit it out and lead from behind. We did not have boots on the ground in Libya so now we have terrorists throughout the region obtaining advanced weapons from the Libyan stockpiles we should have seized. They did not protect the CIA base in Benghazi, so the agents who were trying to scoop up many of these weapons had to flee.
What does all this have to do with you and real estate. Oil prices. Terrorism in Europe and maybe here. This is an existential battle for the Islamists and the Muslim Brotherhood and Iran. The final battle with Iran is nearing, and Israel knows it cannot count on Obama so there is a real wildcard of an Israeli attack on Iran in the next 6 to 12 months using very advanced weapons and then the ultimate battle in the Mideast will be fought. There is no way to know how this may spread, how long oil will be shut down, and no way to know what other impacts on capital markets it will have. Investors here have continued to just ignore the region as though it makes no difference. It matters to you. Pay attention.
Even if the Egyptian army gains full control, as is likely, the turmoil goes on. Syria continues to magnet for terrorists from around the world. There are chemical and advanced weapons which will fall into the hands of the terrorists. Chemical weapons can make a dirty bomb to be smuggled into Europe or even the US. Anti aircraft missiles in the wrong hands can wreak havoc in Europe. If the Muslim Brotherhood is crushed, then Hamas becomes desperate as they will be squeezed by Israel and Egypt working together to crush them. They will react.
The point is that the situation in Egypt and Syria is seemingly isolated right now and having no impact on you or the rising values for your asset. So far. But it is rapidly approaching the point where this is potentially going to spread and become much messier for the whole world. Obama is sitting it out and that leaves things leaderless and conducive for even more chaos. This is going to get a lot worse, and will impact capital markets, terror threats, the price of oil and other energy costs, and potentially a much greater involvement of US military assets in an all out battle between Israel and the monarchies on the one side, and Iran and its surrogates like Hezbollah. You need to be prepared for these disruptions, and possibly another terror attack somewhere in the world, and maybe here. The US lack of action and the cover up on Benghazi just encouraged the terrorists that they have an open field, so now anything can happen as we just saw with all the embassy evacuations. Standby, there is more coming and it is ugly.
For MORE insights on finance trends, check out Ackman Ziff's "Capital, Fueled by Innovation" home page, which provides Thought Leadership positions on a variety of commercial real estate trends, transactions and movement.