Summary A major cause of concern is the aggressiveness of the U.S. effort to seize petroleum assets, or control of petroleum-producing areas, combined with the jihadism in Saudi Arabia, where the per capita income of $20,000+ some twenty years ago has declined to less than $7,000 today. It must not be forgotten that much of the Saudi oil money of the 90's fed Islamic extremism through the Madrassas outside Peshawar, and gave money to the Taliban struggle against Russia in Afghanistan. The Russians are gone but the Taliban …? The jihadists' primary goal is to restore Islamic lands to a political state reflecting the early days of the Prophet. Saudia Arabia is vulnerable. Then there are Pakistan and India to worry about with nuclear ballistic missiles. We have not seen the last of Al Quaeda. It is a very risky time. One other source of worry is World Hunger. The Green Revolution http://www.foodfirst.org/media/opeds/2000/4-greenrev.htmlf domestic consumption and divesting themselves of the hummers. In other words, this is not the end of life, but a massive shift. However, while the discussion focused on individual behaviour, another area of concern in the face of rising oil prices is the heating of public buildings – what happens to hospitals, for instance? In Québec the availability of electricity offers a very viable alternative, but natural gas prices will inevitably follow oil prices upward. The Economy There is a slight, but perceptible slowing of the economy today, but it takes a prolonged period at a higher price for patterns to change significantly. As energy stocks climb, our technical analyst warns of the danger that the oil sector becomes too dominant in the TSX, but reminds us that retail salesmen are still stating that the public is not asking questions about oil stocks. We are probably two-thirds of the way through this bull market. There are only a few real opportunities, three of which he recommended on tonight's "Market Call Tonight with Howard Green". While oil constitutes an important "head wind", in the opinion of one economist, the profitability of an array of U.S. and Canadian companies is phenomenal. However, we have largely exhausted the benefits of the global housing boom and while this market can continue for a while, to a large extent because money is cheap, down the road there are a variety of risks that are not fully priced for – there's a lot of complacency, investors should be fairly cautious right now. Another expert comments that the reaction of the U.S. market to the disaster in the Gulf states is puzzling. The market went up and down, with many voices talking about the impact on the economy; for sure, there is a big short-term negative impact, but further down the road the reconstruction efforts will be very positive for the construction and housing industries. The loss of resources and production capability, along with the rise in oil prices will no doubt bring inflation, another negative for the economy. [Editor's note: we would add the following from the Independent Sep 2: General Motors, the world's largest car maker, saw its stock drop 3 per cent amid fears of the impact of rising fuel prices. Meanwhile shares in Aggreko, the UK company that is the world's largest supplier of portable power generators, rose as much as 7.5 per cent as traders bet it would benefit from the emergency. http://news.independent.co.uk/business/analysis_and_features/article309659.ece