About Us

Contact Us





First Chapters
September Issue
October Issue
November Issue
December Issue

'Next year will be a war year as well..' President GW Bush
... Of course predicting the President will nearly choke to death on a pretzel is more difficult

The Prince of Peace has spoken, 2002 will be one of relentless military expansionism. The 'War against terror' will go on... 'we are going to continue to hunt down these al -Qaeda people in this particular theatre, as well as other places.'
100 days of bombing and the B-52s pound Afghanistan. When will it stop?

It's the other places that sounds worrying. Just where will the war go? When will the USA face up to the fact that most of the terror is actually coming out of Brixton Mosque and other choice places in the UK? Can we expect B52s over London and Birmingham in the near future? When will Mr. Blunkett and Blair face up to the fact that extremism is harboured and nutured in their England. Are they reading the hate emails?

It is worth recalling that England nurtured and harboured Karl Marx in its bosom. You cannot escape the fact that his ideas, so adopted in the Soviet and Union and China, resulted in the greatest human catastrophes of the 20th century. This is not to say that Marx was responsible, simply that he lit the fuse that would eventually become the crushing death masks of Stalinism and Maoism. Marx was calling for social justice for the working man, perhaps unaware that his words and ideas could be interpreted to oppress and defile the working man. Not so those who now preach hatred and extreme jihad against the west, in particular the USA and England, converting the vulnerable, the needy and ex-cons to their cause, selling glory and martyrdom in exchange. These extremists know full well what they are doing, they know how many could die. Like Russians spies in the 20th century, their recruits lay sleeping until called to action. They are our neighbours in places like Finsbury, Lambeth, Camden, Brixton and many nothern UK cities. The shoe bomber Richard Reid is a prime example. An ex-con and convert to Islam, he was a worshiper at the Brixton Mosque where Zacaria Moussaoui (the suspected 20th hijacker on 11.11.01) worshipped. They are on a holy mission to destroy the western way of life and one or twenty such people armed with only small amounts of explosives or even a knife and fork can cause the deaths of thousands. They can and have thrown thousands out of work in the airline and tourism industries.

Ironically, the tragic events of 2001 and the war in Afghanistan have had quite the opposite effect to what they may have intended. Bin laden may have hoped to extinguish hope and faith in capitalism, instead he has shaken the engine of capitalism out of its torpor and through effective, decisive action, the west has found resolve and intellectual arguments for the renewal and maintenance of our way of life. The Wall street and Pentagon deaths may have been terrible, but they have awakened us to the dangers within and without. They have not produced despair in the young, but given them a shock. Conscious consumption is all very welll, but there is more to see and understand in this world than the local Mall. May the young realise that there are others out there belonging to a different tribe with different ideas and aspirations, quite alien to their own. An awareness of world geography would be no bad thing either.

So 2002 - will it be a year in which President Bush conducts his war of revenge against 'terror' or will it be a year of unintended results? What kind of year will it be?
The Developing Scenario:

I: INDIA v PAKISTAN: Is nuclear war possible between these two belligerents?
At the moment there is great tension following the attack on the India parliament by 'alleged' Pakistani extremists. (14 people were shot dead) Pakistan for it's part is hoping for a reward from the USA for its pliant part in the Afghanistan war. Nevertheless, as evidence now shows, the Taliban could not have survived without Pakistani help these past years and if it is discovered Osama Bin Laden is hiding there, do not expect much sympathy for that country. A war is extremely possible between India and Pakistan, but the nuclear option seems too extreme at this time. Indeed Pakistan has 'ruled it out' which means that they were at least thinking about it.
Since the December 27th Bin Laden broadcast on TV it is more likely that Bin Laden is hiding in Pakistan. Expect this to be increasingly dominant in the news for early 2002. (For background reading as to the outcome of this proposed war read the novel LAST JET ENGINE LAUGH by RUCHIR JOSHE which looks at Pakistan in a post-war situation).
*As of Jan 15th there is still much posturing but at least the Premier and the General have shaken hands. In the end India and Pakistan must ask themselves what will they gain and what could they lose from war and from here it looks as though both could lose a great deal. Glory is a messy ugly thing and very overrated. Ask the Afghan Taliban.

Will the default by Argentina matter? $155 Billion dollars is lot of money not to be able to repay. As of Jan 15th with the Peso now floating fleely and downwards the peso has already devalued by 50 percent and could fall further.
Right now the fifth President (Eduardo Duhalde) in two weeks is enacting a rash of emergency measures to help them get through this period of uncertainties. There is daily rioting and one suspects it will all get very ugly. The election in March 2002 may go his way, but expect Argentina to default anyway and another change of government by the summer, with more rioting and a much worse situation. As of January 2002 Pesos was no longer swopped for US Dollars. The continued impoverishment of the poor and the destruction of the middle-classes will follow and with it, the ability to restore and rebuild thier economy. Argentina is a one-way bet in 2002. Right now factories and farming are at a virtual standstill, The factories contain old machinery, exports are at a minimum and the more they delay devaluation, the bigger the pain later. Only slowly will we find out many banks in Europe and America are affected and by how much. This story will run all year and could spill over into our economies in the west.
Previous articles on Argentina here. Argentina the Beautiful, Argentina Implodes


January 1st 2002. Good-bye to the Franc, the Mark, the Escudo, the Peseta and many others.
This is something of a grand return to the greater Europe of Pax Romana, where Caesar's coin could be spent in any part of the Empire and in theory it is a 'good thing'. Right now the UK and Denmark are set against it, but for how long? Finland has embraced it and Norway has not. The Euro has a flaw, the common interest rate that will not suit each country all the time and there are suspicions that the rate will be set to suit Germany most of all, but the Euro is a logical and binding step in the European Community and will be a success, eventually.

There can be few people who do not know that most of Europe is changing to the Euro currency on January 1st 2002. Good-bye to the Franc, the Mark, the Escudo, the Peso and many others.
This is something of a grand return to the greater Europe of Pax Romana, where Caesar's coin could be spent in any part of the Empire and in theory it is a 'good thing'. Right now the UK and Denmark are set against it, but for how long? Finland has embraced it and Norway has not. The Euro has a flaw, the common interest rate that will not suit each country all the time and there are suspicions that the rate will be set to suit Germany most of all, but the Euro is a logical and binding step in the European Community and will be a success, eventually. Although the currency is rising as I write this, I expect some shock will cause it to fall in the Spring (especially as there are elections in German, France, Holland and Ireland this year) and many reforms will be put on hold including the enlargement process currently held back by Ireland. My recommendation is to buy into each fall and by the early summer the inevitable swing back in value will catch many off guard. The UK may well be smug in the winter months as fraud and chaos take place, but when the Euro strengthens and the pound begins to creak as the world wakes up to the fact of of our decimated manufacturing industry and faltering banking, media and property empires, the race to get into the Euro will begin in the Autumn of 2002. Right now the Government is encouraging retail operators to take the Euro at all outlets (but providing none of the financial or legal backing to enable smaller retailers to compete). Thus the back door is open. Prediciton? The result of the referendum, anti-euro newspaper Barons nothwithstanding, will be a yes. We have no other choice.
For reactions to the first week of the Euro read GoodbyePeseta , Euroadventure and The Third Week

Sometimes you just have to admit that you are wrong. Well I have miscalled the homeowning market for so long, I figure that this year I will finally be right. London is the key. Not only has 'expensive' property stopped rising (the lack of Christmas bonuses a key here) but those who took out mortgages at five times their income or more, are having to sell now and what has become as a trickle, will be a rout in March/ April. Just as the provinces have taken years to catch up with the London effect and are still rising in many areas, the London squeeze of property will ripple out over the year and gather pace as unemployment rises. Many people have made the fatal mistake of increasing their mortgages - cashing in on the rising value of their homes. They have spent this money of holidays, new cars, face lifts, or in a few cases improving their homes. But as jobs become more scare and prices falter, at some point the banks and mortgage lenders will grow nervous. It will take another year because mortgage loans are cheap at the present, but in the end market forces will apply. What goes up will go down and in particular many speculative buys in dodgy areas will reveal to be hard to shift.
I am not saying that houses will go back to 1997 prices or anything like, but the froth will disappear and as more people have to sell, the marginal houses and cramped studio apartments will suffer most. Value for money will come back in to vogue.

*Sometime around 1986 friends of mine bought a run down house in Mottingham, a London suburb for £65,000 . Today it is valued at £660,000. The temptation form many ordinary London housholders is to cut and run. Take the profit, buy the little place in the sun and bank the rest. The snag? Interest rates. Buy for £150,000, invest the rest at a real return of around 3 percent or less, after tax it produces around £13,500 per annum. Not much for a life in the sun. Now have the same thing happen in Toyko and invest at zero interest rate.

How hard is it to survive in Japan with no income from savings. Especially if you don't have a job and house prices are falling along with everything else as they are in a deflationary spiral. High property prices are no guarantee of a good life. You have to stay in the game. Taking a profit means you are out of the game forever. Many people percieve themselves as rich because of the value of their home. In the UK investment in industry has been diverted to home buying. It crashed about our ears in 1988, why wouldn't it do so again?

* Right now on Jan 7th car sales in the UK have reached record highs (though sadly not of British made Rover's) all this is fuelled by credit and the signals coming out of the Bank of England are interest rates are going to have to rise. This is turn will raise Sterling and further damage our manufacturing in the UK. Of course if we were in the Euro we could arbitarily raise our interest rates. Is it the right thing to do? Will it choke of consumer demand? I am predicting a shock for the consumer and interest rates of 6 percent by the autumn, we shall see. A slow burn.

America will probably be leading us out of recession in mid - 2002 but Europe is lagging behind and all of 2002 will be coping with the effects of the 2001 downturn. The combined effects of the turndown in civil aircraft, jet engine orders, shipping, the EU fishing quotas, the EURO confusion, will mean Europe has a mixed and sometimes difficult year. Germany has 4 million unemployed and difficult elections to get through. America has cut away the fat and is lean, hungry and with incredibly low interest rates, ready to climb back out of the hole, led by the rearmament industries.
*On the negative side. Ford, one of America's largest companies is having major sales problems with its domestic vehicles. Sales of Jaguars and Range Rovers are good but they will not sustain the company alone. The key compenent manufacturer for LandRover has gone under, so expect production to grind to a halt. *Since I wrote this on Jan Ist Ford have announced 35,000 jobs to go in the USA. (Jan 11th) Marconi in the UK are laying off another 4000 people and selling off core assets to stay in business. Some key 'old economy' companies are having problems and this may yet drag down the overall optimism. Already Alan Greenspan in the US is saying that he thinks the recovery will take a lot longer than oriiginally thought. Walt Disney has yet to recover from the effects of 9/11. How many other companies are also feeling the pain. Expect a rash of major companies getting out a lot of bad news and write-downs this first quarter. (especially dot-com investments).
The interesting element is almost zero inflation in the UK. (0.7% Jan 15th figures). Some may celebrate this but are we going the way of Japan? Assets will start to fall in value year on year and deflation takes hold? We have become so used to our homes and antiques going up by around ten percent a year , how will we react if this goes into reverse?

But what of Japan and China?The key to Japan is to watch the first figures on the Tokyo stock market after New Year's day. If it rises (the saying goes) then the economy will revive. If not, then expect another year of stagnation and pain. Japan is dealing with its banking credibility problem and it is tempting to think that Japan is suffering, but the reality is that it still exports a fantastic surplus every year and it is still an incredibly rich country. This could be the year Japan gets moving again. The Nikkei has risen every day since the first of january and now stands at 10942. A long way off the heady 26,000 or higher of years ago, but confidence building and an excellent sign. We shall see if it continues and the saying is correct. As I ammend this the stock markets worldwide are down. So is the Nikkei. So perhaps it is a sign tha the old sayings no longer ring true. Expect this year to turn 'tough'.

China is growing year after year, the low inflation scenario in the world can only help. Now in the WTO, China is well placed to grow stronger and richer this year. It may also raise its voice a little and annoy America. Growth this year is running at around seven percent. Can this continue without overheating the economy?


This is not likely. Expect Israel to continue to have major problems. At any time it could spill over to other countries. Especially if Bush goes after Saddam Hussein. Is there a chance for peace betweeen Palestine and Israel? Probably not with Sharon in change of Israel. The suffering will continue.
Indonesia will continue to suffer too but it would be good to think that this is the year that Burma returns to sanity and its rightful elected ruler is allowed to take over from the oppressive Generals.

South Africa will suffer greatly from the recent involuntarily devaluation of its currency by 40 percent. Imported oil and machinery will raise inflation but fortunately it can always increase the exports for BMWs and Volkswagens from the East London and Wolfsburg factories in the Eastern Cape. South Africa's greatest hope is an export surge and they do make and sell quality goods and fruit. If they could also face up to the challenge of Aids (80 percent of the forty million sufferers of this disease live and die in Africa as a whole 4.8 million in SA alone)) and other mismanaged areas, such as a failure to privatise state industries and telecoms. It could yet 'come right', but don't bet on it. The Zimbabwe effect is going to increase and destabilise the region and South Africa is awfully loathe to condemn Mugabe. The fear is by foreign investors is that its silence means that it agrees with Mugabe and the land grabs and murders of South African farmers will increase from the high number that has already occurred in 2001.

Yes the weather will have unpredictable effects. Every two to ten years the El Nino affect appears in the Pacific and alters rainfall, gulf streams, and causes floods, quakes, typhoons. Already this january we have seen El Nino activity increase by 15% in the southern hemisphere. Expect this sotry to be big around September /October 2002.

Jan 7th
Current price of Oil $21.07 (Brent Crude)
Curent price of Gold $277.75
Nikkei 10942
DOW 10259
FTSE 5301
Oil: $19.16 (Brent)
Gold: $283
Nikkei : 10208
DOW: 9969
FTSE: 5166
Dec 02?
Oil: $18.50?
Gold: $290?
Nikkei: 12,000?
DOW: 11,000?
FTSE: 5100?

What price oil and gold one year from now? If cheap oil is helping us recover will OPEC with Russia's help choke off the recovery with high oil prices or will a weak market keep the price low. Fortunes are won on lost on such decisions. If you have read the above and have an opinion about inflation/deflation and things to come. Send them to

Our first reaction to Sam's predictions is from Lionel Darmendrail in Bayonne, France
'His analysis at this point sounds (pro) American ...' Click here and read on


© Sam North 2002

< Back to Index
< Reply to this Article

© Hackwriters 2002