In a report released by the World Economic Forum (WEF), the threat of a US recession placed higher than terrorism as the biggest threat to the world for 2008. "Fears of a U.S. recession coupled with a sudden spike in oil prices replaced terrorism, pandemic disease outbreaks and short-term disasters resulting from climate change as the issues global business leaders are most worried about, said the "Global Risks 2008" report." Well at least they got it right vis-a-vis climate change, or lack thereof.
There is no question that US economic growth is slowing led by the decline in housing, and the impact that slowing growth will have on the global economy as well as thestock market is an important issue. It also will play a big role in the upcoming Presidential elections. But the most important issue?
The report added, " The third major risk - dwindling food supplies - has become an issue not just for developing nations but also for rich countries," the report said, citing steep price increases for staple foods over the past year.
"There is considerable uncertainty as to whether food insecurity in 2007 is the result of short-term conditions... or whether a more fundamental change is taking place."
Could it be the reason food prices are rising is because farmers have decided to take advantage of subsidies and changed over their crops to grow more and more corn? Not to harp on this, but the push to ethanol has largely contributed to rising food costs, not to mention done very little to actually help the environment.
My biggest problem with this report is the fact that people just aren't taking terrorism seriously. While society has become lax regarding the threat of terrorism, the terrorists themselves are certainly not resting on their laurels. They continue to train and plan on inflicting more pain throughout the free world. Remember the movie Rocky? Apollo Creed was at the top of the world as the reigning heavyweight champion, and instead of training hard he was relaxed in his preparation for his fight with the Italian Stallion. Rocky on the other hand, took his 'chance of a lifetime' seriously, and beat Apollo. The lesson? We can't become complacent as a society and forget that there are large segments of the world population out to get us and destroy the free and democratic society that we all benefit from.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no position long or short in any stock mentioned as of 1/9/08.
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