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Greetings,

POC — what’s your take on this? It always stumps me how the terrorists don’t go after their wealthy neighbors who are becoming so westernized, but instead target US.

Politics would be too damn boring if we could always figure it out. The oil-exporting countries are gathering billions in US dollars because of high prices. Even though most of the Gulf States peg their currencies to the dollar, none of the countries welcome a weak dollar. It's like exporting inflation to these countries. Dubai (UAE), Qatar and even Saudi Arabia are experiencing inflation because of the accumulating petro-dollars (Kuwait, incidentally gave up on the dollar and now pegs its currency to some hybrid formula of dollars, euros and yen), especially in real estate and housing---just look at the prices for Dubai rentals. These countries are seeking HARD assets as a hedge to the inflating dollar. Look for more and more Western asset investments. Remember when Japan ruled the economic world in the 1980s and US politicians went into panic-mode over their USA real estate purchases? (How quickly we forget the flip-side of the great Japanese managed economy.) Regardless, I think the pattern is repeating here. Let's see if the Gulf States handle their Western investments better than the Japenese did. In short, collecting US dollars through export surplus and not spending them seems like a poor strategy. Much better to buy something real like global companies, than simply collect interest from US government securities. I think we survived being a debtor nation for the first hundred years or so of this country's existence, we can probably survive comfortably as a debtor nation for another hundred years---or at least until the worm turns.

As for your question, the terrorists will never change the mind of any people who are creating wealth---and Dubai and the UAE are wealthy countries with wealthy citizens. Al-Qaeda-types would be exposed immediately by the locals if they tried their militant tactics in the Arab Disneyland. Rarely to people involved in wealth-creation have time for ideology. We will beat Al-Qaeda by exporting capitalism, not democracy per se.

PoC