War in Iraq and the Economy and CAEBefore I comment on this, I would first like to state that I am against a war in Iraq if there is any way to peacefully change the leadership. But as I don't think that is a possibility, with reluctance, I would support force even without the security counsel voting again on the issue. So, I guess that makes me a hawk!
So what will happen after the war? I expect it to be a short one, although some Iraqi forces (the Republican Guard) may fight harder to protect their territory than it did in Kuwait.
After the collapse, I can imagine that the U.S and Britton will face fierce competition from Russia, France, Germany and Japan who will try to win a piece of the restructuring in (I believe) the world's second largest oil exporting country.
The worldwide economic stimulus as a result will be considerable. There will be one less haven for terrorists. The aviation industry should recover very quickly as the billions pour into the rebuilding of Iraq's infrastructure. Opening Iraq's oil taps to help pay for some of those costs should drive oil prices down providing further stimulation to the economy.
Although CAE is a little further down the supply chain, I would expect the company to bounce back quite nicely 6 months or so after cessation of hostilities. For that reason, I'm comfortable with paying $5.22 and higher for my latest purchases. I believe we will be back at $10.00 before the year end which will have tripled my investment.
Does that make sense?