The Bottom Line answer is, "yes, start worrying." Investors are not rushing for the exits, but have taken profits after more than two years of strong performance in markets from Egypt, Israel, and Turkey to Pakistan and Iraq.
It is now more than three years since the United States and allies invaded Afghanistan, more than two since the brilliantly conceived invasion of Iraq. It took most of that time to organize a single, one-shot election in each country.
When elections were held, just as "Bottom Line" predicted (January 2003-January 2005), a vast sigh of relief was heard, in the Middle East and the U.S. Since then? Our allies in both countries, abetted by the United States, have gone back to business as usual.
Elections for an actual parliament in Afghanistan were put back once again last month, matching the chronic delays of 2002-2004 before they were allowed to cast one, lonely vote for one, single office.
Iraqis have formed a government, much to their credit. But it will now be spending much of its effort not governing, but debating a constitution, leading up to another vote in... December?
As well intended as these little driblets of democracy are, they may not be enough. New voters need lots of opportunity and practice. In particular, in order to respect and participate in real sovereignty, they must commit the acts of sovereignty.
The ultimate question of sovereignty for both Iraq and Afghanistan today is, are the people in charge? Or their elites? Or the U.S. and its allies?
Recent polling in Iraq suggests a large degree of satisfaction, especially considering the recent violence, with the state of things -- and even more optimism about the future.
But there is a large cloud over the entire enterprise, in both Iraq and Afghanistan, given the fact that the sovereign -- if it is indeed the people as the U.S. claims -- has not blessed, or even been consulted on, the central question of life in those societies today.
Does the U.S. belong in either country? That is a question that must be put to the people of those countries, and sooner rather than later.
If the people no longer want American troops around, then the enterprise is not tenable for much longer.
If they want us to stay, then both Western critics and local terrorists will at least have to continue their agitation in the face of a direct, popular mandate.
The advocates of democracy for all the world have had few more consistent friends in the Western press, and since the 1980s, than me. But it is, simply, time to let the people exercise their will.
If the Iraqis and Afghanis won't do it, and the U.S. State Department won't push it, maybe it is time for the 100 sheep of the U.S. Senate (which recently cast a unanimous vote on U.S. funding for the war) to get involved. Senators Clinton and McCain, Hegel and Schumer -- call your office.
Since this does not appear to be in prospect,investors must consider the possibility for an ongoing agony -- a paradox in which democratic forces are popping up all over in the region's unfree countries, but still having trouble defending missions seemingly accomplished in Afghanistan and Iraq.
There is vast momentum for Mr. Bush's Wilsonian visit in the Middle East. For all the pressure on U.S. forces, there is equal pressure on the region's remaining tyrants, from Syria to Iran. It's hardly a good long-term investment, then, to short local stocks.
But time to lighten up, lock in some profits? Yes, particularly after the recent dip in oil prices comes to an end and crude surges back into the mid-$50s.
Indeed, given that the forces of revolution are marching throughout the region, a major disruption of supply would seem, if not certain, highly likely.
The bottom line? Buy oil, young man. Purchase today in the high $40s, sell when it hits the high $80s or $90s arond 2006-2007.
(Gregory Fossedal, email@example.com, is an advisor toinvestors on global development trends andideopolitical risk, and a research fellow at the Alexis de Tocqueville Institution, www.adti.net. Hisclients may hold long and short positions in many of the investment securities and opportunities mentionedin his reports. Investors should perform their own due diligence and consult their own professional advisor before buying or selling any securities. Mr. Fossedal's opinions are entirely his own, and are not necessarily those of his clients or AdTI. Furthermore, they are subject to change without notice.)