I am leaving on holiday to Switzerland and northern Italy this week but leave you with some global thoughts as we close out August.

Mubarak is not my favourite guy but he is going to be proven right – Iraq is becoming a hotbed for jihadists and the regional strategic situation might turn out to be less stable than it was under Saddam unless the Americans figure out how to get on top. The Americans are trying – they are using the Iraqi situation to put pressure on Iran and their threats in the nuclear arena is their way of trying to get attention and search for forms of leverage. Sistani has been conveniently having heart trouble in London and has left the field open for the Americans to finish off Sadr. Sadr is the last remaining hope for the Iranians in Iraq in the present constellation.

Keep an eye on the Big Picture here: The Sunnis are afraid of losing their monopoly on power, not only in Iraq but all over Arabia, and remember that in a number of countries such as Bahrain and Saudi, they are a minority. They all hate Shiites tremendously and Iraq is viewed as the first domino for the region. Remember last August’s conversation with Emad in Montreal as to the vitriol involved. Therefore, even the Arab regimes in the area have reason to want the Sunni rebels in Iraq to keep making trouble.

Israel builds its wall not to create peace but to last out a perpetual state of war they think will always exist with Palestinians who are not reconciled to its existence. They no longer care about who will lead Palestine. The EEC is ready to lead an apartheid-like fight and set Israel up as a  pariah and will do so in the political arena, but trade and scientific and technological cooperation is strong with EEC and many other countries and these ties are not in jeopardy. The Americans will in 2005 join this harsher tone, but the Israelis are willing to take the talk as long as their trading partners don’t take the walk. You might notice that the Economist this last week wrote in an editorial that the world should change its mind about Sharon and start to support him.

Jews will vote almost 80% for Kerry. Israel is listed as #6 on their list of priorities. The only Jews who really are for Bush are the Orthodox and they are about 10% of American Jewry. Bush is courting Israel not so much for the Jewish popular vote but for the fact that a significant amount of money comes from those Jews that support him and they many more Christian evangelicals that are militant on this issue. Remember that they want the Messiah and they expect Sharon and Co. to help bring it along to them.

Clarification on the Saudi Arabia comments from last month. It is true that I ridiculed the crown prince for blaming Al-Quaida on Zionists. It is also true that I realize that the word Zionists is a code word for domestic political opponents because their political system requires the use of such code words (because people can’t criticize domestic opponents since they are afraid to do so). However, it is a political system that exists to the pleasure of the crown prince. He doesn’t have to continue this kind of BS. Jews don’t have to suffer from the likes of these people referring to baddies as Zionists any more than blacks don’t need to hear heads of state blame the niggers for their problems because it is convenient for them to do so.

Stock market in America is down significantly; oil price will stay up partly because of Russia and because Saudi overstated oil production capability. Russia needs to stop fiddling around with Yukos (every day another court motion and threat) and show it has some rule of law and not just a vendetta against a political opponent of Putin – it is jeopardizing not only foreign investment but is having a destabilizing impact on the world oil market.

Home mortgage rates stayed down during the summer even as federal reserve rates went up. This is soon to catch up, but meanwhile the lag reflected uncertainty and lack of demand in middle-class America. Second quarter 2004 tech sales did not close and retailers did not do very well. There were ridiculous sales over the July 4th weekend. Middle Class America isn’t doing so well and the Democrats have a case. Kerry’s convention speech wasn’t a great speech but it was as good as it needed to be to get people with open minds to give him some consideration. The Economist said that Kerry could put a hummingbird into a coma; I saw hummingbirds in the Costa Rica rainforest; they are quite active creatures. I watched a Gore speech 4 years ago on cable and fell asleep; I was pretty pleasantly surprised by Kerry’s convention speech.

FYI, Global Thoughts said this past February that Edwards should be Kerry’s pick for VP.