The Transatlantic Gulf

British MP Lord Rees-Mogg coolly appraises the unintended consequences of a hot war with Iraq.

Published: 20-Feb-2003

By William Rees-Mogg

This month is the decisive period for an American war against Iraq. According to my Washington sources, the build-up of American forces ready to enter conflict is almost (if not yet) complete. Unless there is substantial evidence of Iraq's disarmament, in accordance with the United Nations resolutions, the United States will enforce those resolutions by military action.

The whole of the world's economies will be affected by whether this war occurs, and if it does, by its outcome. If Saddam Hussein is removed from power, either by a deal with his Arab neighbours, by assassination (which has been a common event in Iraqi and Mesopotamian history) or by the US, that will be good news for stock prices. If there is no war or a drawn-out campaign, markets are likely to drift lower, though oil and gold may go higher. If Saddam Hussein is still in power in three months' time, it will mean a defeat for the United States, with serious consequences for market confidence.

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