"In politics, nothing happens by accident. If it happens, you can bet it was planned that way."   -- Franklin Roosevelt

The United States has clearly shown the political will to retaliate against Islamic terrorists both in our ongoing War Against Terror and our military invasions of Afghanistan and Iraq. There is no doubt that our enemies now fear the overwhelming military technology and fighting superiority of the United States. But this fear and their recent defeats have only intensified their hatred for us. Now after the conventional military victory in "Operation Iraqi Freedom", America is one of the two most hated nations in the world by a majority of the one billion plus Moslems. It is not our objective to debate whether this hatred is due to our global foreign policy, the need for Arab politicians to find scapegoats for their leadership failures, religious fanaticism or a combination of the above. The bottom line is Moslem hatred of America is creating a fertile field of converts for militant Islam and, more importantly, for other terrorist groups. 

There has been much speculation and discussion concerning the future threat of terrorist attacks with weapons of mass destruction against Israel, Western Europe and the United States. If terrorist elements have weapons of mass destruction we must take an objective look at all the potential targets of opportunity for an attack and the availability of these weapons. 

"Terrorists have not only long memories, they have infinite patience. They certainly learn from their mistakes." 
--Edith E. Flynn, professor of criminal justice at Northeastern University.

The conventional news media and our political leadership have been less than forthcoming on this issue, either to avoid a public panic or at government direction, but this question still must be asked. The 9/11 terrorist attacks on Washington and New York was an operation that was years in the making and certainly not a one-time strike on America. Although Washington's massive response in Afghanistan and Iraq and against terrorist cells around the world does appear to have caught our enemies off guard. This temporary reprieve will not last forever. Eventually they may well react with a massive counter attack designed for maximum public effect, U.S. humiliation, and economic destruction.  

Report From Haaretz Israel News: Al-Qaida Has Obtained Tactical Nuclear Explosives

To determine the target, we must first explore the probable goals of the anti-Western players in this conflict. While they can't hope to destroy the United States as the world's only remaining superpower, they are obviously interested in replacing all the existing "moderate" Arab governments with fundamentalist, Islamic regimes. Their long-term objective is to topple the existing governments of Egypt, Saudi Arabia, Pakistan, the Arab Emirates, Kuwait and Turkey and replace them with fundamentalist Islamic governments that are anti-American and will cooperate in destroying the nation of Israel. 

Neither Israel Nor Europe Is A Probable Target

The Islamic fundamentalists goal is to unite the Moslem world therefore this rules out a nuclear, biological or chemical attack against Israel. There was some concern that Saddam would launch isolated attacks when invaded by the U.S., but this didn't happen. Still, I believe there is little danger of a mass, unilateral attack against Israel by either an Arab nation or by other Arab terrorists for the following reasons.

An weapons of mass destruction attack against Israel, if they obtain the capability, would by its very nature, kill many hundreds of thousands of Palestinians. This would hurt the support for their cause from other Arab nations and peoples. Not to mention that an attack here would probably destroy or render unusable the Moslem holy sites in Jerusalem and on the West Bank. Killing a large number of the Jews in Israel along with the Palestinians is too high of a price to be paid for the immediate destruction of Israel. Plus the fact that an attack against Israel would be counter productive due to Israel's nuclear arsenal and stated intentions. Every Arab terrorist leader knows that if weapons of mass destruction are used against Israel and they suffer massive loss of life, or likely defeat, then no nation in the Middle East will avoid a final Doomsday attack with total annihilation and ultimate destruction by nuclear weapons. 

The opportune target certainly isn't Western Europe, with the exception of London and the United Kingdom. Most of Europe is on the sidelines in the current conflict and due to oil or geo-political considerations often side with the Arab states regarding the U.S. Middle East policies. Therefore, with the exception of London, I do not feel Europe is at risk of a terrorist weapon of mass destruction attack.

Washington DC Is Not the Prime Target

The primary target of opportunity certainly isn't Washington D.C. Although home to many military installations and commands, national intelligence and hundreds of thousands of politicians, lobbyists and bureaucrats, America's military might and capabilities are far too widespread and decentralized around the world for an attack to cripple our military capacity to respond. If they had the means to hit two targets in the U.S. at the same time with weapons of mass destruction, Washington would be the shared target but this is unlikely.  

The military power of the United States armed forces is such that terrorists can have little impact on our capability to wage war and retribution in the event of an attack. Yes, they could target Washington.  Yes they could destroy maybe an aircraft carrier task force.  And yes, they could conceivably deliver a short-term tactical defeat against us if we proceed to occupy more nations in the Middle East, but they cannot hope to defeat us as a military power. As the Japanese learned with their attack on Pearl Harbor and as bin Laden found out after 9/11, it is not a wise course of action to provoke the United States when we can target the enemy.  

The Dirty Secret: Wall Street and the US Markets Have Been Attacked Before

Terrorism’s effect on the economy and personal security has been of major concern since 9/11.  In a recent survey among affluent Americans, terrorism, the struggles of the next generation and the stock market downturn are their biggest worries.¹

Concern	Percentage Worried
Terrorism here and abroad will have a negative   effect on the economy and securities market	76%
The next generation will have a more difficult time financially than your generation has had	73%
Stock market gains will be lower than they’ve been in recent years	68%

It is time to discuss a very taboo subject in the establishment press.

What is the next probable target of Osama bin Laden or other Islamic militant terrorists here in the United States? We have heard over and over again how they targeted the World Trade Center because this building was the symbol of American strength, pride, and capitalism. My first question is why the World Trade Center in New York City and not the Empire State Building or the Statue of Liberty? What about the U.S. Capitol Building, Washington Monument, the White House, the Super Dome filled with spectators or San Francisco's Golden Gate Bridge? Also, why did they not wait for the Salt Lake City Olympics broadcast on world-wide television or bide their time until a national political convention where they could have taken out half the leading politicians of the Democrat or Republican Parties?

Why did Moslem terrorists twice target the World Trade Center? Surprisingly, with all the news articles, TV talking heads on the nightly programs and pronouncements from politicians, there has been little or no discussion on why this particular target was chosen above all others? Have you considered just maybe there is a reason for the code of silence and blackout on all target discussions?

What if our politicians, Wall Street and the media fear the real reason for the terrorist targeting of the World Trade Center Towers but our establishment has decided not to go public and disclose the risk for fear of public and financial panic?  Shouldn't we know the truth so the citizens of New York City, specifically those working in the financial district, can judge any future risk for themselves?  What about American investors? Is fear of a market panic or a wholesale withdrawal from the U.S. markets and the dollar by foreign investors another reason why there has been little press coverage of the threat? 

I fear the real target of both past attacks has been Wall Street and our financial system - not just some tall buildings. Could the terrorists have been trying both times to actually bring down the World Trade Center towers on the New York Stock Exchange and Wall Street? The answer could be yes. One thing is for sure, there is no doubt they were trying to disrupt the U.S. financial system and discover our counter measures to keep the investment markets open.

Those who don't want to explore or discuss this risk will say this is just scare talk and that there is no risk of terrorist attacks to the financial markets. They will claim that there is no future chance of this and that the situation is well in hand. They will assure you not to worry about the terrorist risk to your portfolio, liquidity and retirement funds. Well, the experts have been wrong before.

"Well, don't worry about it….It's nothing."      -- Lt. Kermit Tyler (Duty Officer of Shafter Information Center, Hawaii), upon being informed that Private Joseph Lockard had picked up a radar signal of what appeared to be at least 50 planes soaring toward Oahu at almost 180 miles per hour, December 7, 1941

Thanks to the repeated financial and news channel press reports during the 9/11 market closure, the location of the offsite back up and record systems for Wall Street were revealed. I fear that terrorist networks could be in a position with a weapon of mass destruction to destroy the back-up systems as well as targeting Wall Street. This could be catastrophic to your investment records, liquidity and market value in the event of an attack. 

Could the reason no one is talking about the threat be that our politicians and the financial establishment really are deathly afraid of what could happen to the American stock and bond markets, the NYSE, NASDAQ and the dollar should this hidden threat become public knowledge?

I feel the risk is certainly worth considering if you have the majority of your portfolio undiversified and only in the American dollar, stock and bond markets or mutual funds and variable annuity investments.

There could be a financial panic and a substantial market meltdown if the threat of another attack against Wall Street and our back up and operational systems should take place. See the Case Study: A Nightmare on Wall Street & the URL is
But like the earlier tech stocks collapse, that may be finally over, no one in authority is willing to warn the citizens of New York City or investors to be aware of the risk to their stock and dollar denominated investment holdings. Remember in the conventional investment business, no one ever says sell or cries fire even if the theatre is filled with smoke! 

Enough questions. Now is the time for some straight answers for the citizens of New York City who have already suffered so much. What is the chance of a third attack on Manhattan with a weapon of mass destruction and how many hundreds of thousands could die in this attack? What about the investors who have had their portfolios already cut in half by the tech bubble collapse and bear market? Every investor deserves a realistic appraisal of the terrorist risk to his or her portfolio values but it will be up to you to do the job as you'll hear nothing from Wall Street or your financial professional.  

These are the tough questions to which our politicians, Wall Street and the media should be asking and demanding answers. This is their responsibility and if they fail to do their duty, then they should be held accountable when the attack comes. Their delay and hesitance to confront these risks are reason enough for Americans to consider some additional diversification of their portfolios into non-U.S. dollar and quality foreign equity investments. Still, rest assured most Americans will trust "the experts" until it is far too late. Maybe George Santayana had the vast majority of American investors in mind when he said, "People never believe in volcanoes until the lava actually overtakes them."

The Opportune Target: Wall Street and America's Financial Infrastructure

The terrorists understand America's Achilles heel is the vulnerability of our financial markets. The 9/11 attack costing approximately $250,000 to organize destroyed up to $30 billion in property damage in New York City and caused a market panic destroying over $1 trillion in stock market valuations.  It has pushed many airlines in the U.S. and Europe to bankruptcy. When compared to a weapons of mass destruction attack, 9/11 which would be considered minor strike has created a serious global recession. Just as the last two attacks were on the World Trade Center, I believe a future WMD attack will also be directed against New York City. This center of our American stock and bond markets has already proven vulnerable to attack and impossible to defend against attacks of terrorism.
 
An attack with weapons of mass destruction on New York City would, by its nature and scope, also take out our back-up financial systems that would be crucial for surviving this type of attack. Now, thanks to the news coverage and short-sighted attempt to generate confidence in our financial system after the World Trade Center attack, the world knows that most of the back-up operational centers, crisis re-location and records storage for the major U.S. banks and Wall Street investment firms are by necessity located within close proximity to Manhattan. These crisis centers are worthless without the trained personnel to run them and keep the firms operational so they must be near enough to their headquarters for the workers to get to the alternative locations. A successful attack with weapons of mass destruction would probably take out these sites thus destroying the stock markets, firms and records for some indefinite period. While this is the real threat to the U.S. financial markets, there are other even more vengeful reasons for Islamic terrorists to strike New York City. 

The high-density population in Manhattan and the surrounding boroughs means this type of weapon would generate the highest population kill ratio in addition to taking out the guts of the U.S. financial infrastructure. They would consider most of the population deaths surrounding New York City as acceptable collateral damage due to demographic and political reasons relating to their goal of destroying the state of Israel. 

We must also address the extreme hatred for Israel that is constantly expressed by many of the Islamic fundamentalists desiring the destruction of the State of Israel. However as stated earlier, it would be counterproductive for these terrorists to target the nation of Israel for attack due to the existing Moslem holy sights, massive Palestinian deaths and the likely nuclear retribution by the Israeli armed forces. Remember the demographic breakdown in the area is around 5 million Jews in Israel and its occupied territories and close to 4 million Arabs.

Where is the next largest concentration of Jews in the world after Israel? New York City. With a population of almost 2 million Jews, this accounts for over 1/3 of the entire Jewish population in the United States. Therefore, Moslem extremists view the prospect of wiping out much of New York City as a positive development because not only would it decimate the U.S. financial markets but also the substantial American based Jewish financial and political support for Israel.

Simply and crudely put, from the terrorist point of view, taking out Israel gets the Moslem extremists and the nations they want to take over, possibly nuked and destroyed forever. However, taking out New York City, on the other hand, destroys the U.S. investment markets, our financial infrastructure, a substantial percentage of the Jewish population and also much of the American based financial and political support for Israel.  

We all understand, the government of Israel would have little to lose in nuking their Arab adversaries if the continuity of their tiny nation state ended due to extremist attack by deadly weapons of mass destruction. While an outraged United States would go after the guilty parties and nations with nuclear weapons if New York City were destroyed but they probably would not attack the other Arab states not involved in the conflict. This might be an acceptable cost to the Islamic extremists. 

The question is: do terrorists have weapons of mass destruction at the present time? I hope and pray the answer is no. The Jewish people and others have already suffered one holocaust in Europe from fanatics who believed in their evil cause. The Nazi's believed the end justified the means and this is the same mindset of the Moslem terrorists in the world today. We must avoid and defend against the possibility of a terrorist attack using biological, nuclear or chemical weapons of mass destruction on New York City.

Terrorist Threat Defense Options

What can we do to protect ourselves individually, our investment portfolios, the financial markets and New York City from the risk and destruction of an attack?  First, do not count on our intelligence services to warn us. It is apparent from the 9/11 attack on the World Trade Center, the attack on the Cole, the '93 World Trade Center bombing, the cruise missile attacks on the Aspirin factory in the Sudan as well as against empty huts in Afghanistan, that U.S. intelligence has failed miserably in dealing with anti-Washington terrorist forces. Why should we have any confidence in them now? 

Do not trust the federal government to warn you. No one really knows the amount of risk here and politicians will always do what they must to prevent panic in the streets, in the investment markets or risk their chances for re-election. The public reaction to this threat could paralyze the already weak economy of New York City and shatter the dollar, stock and bond markets. They would never come out and warn of this possible threat to Wall Street and New York City anymore than a major investment brokerage firm would ever tell its clients to get out of the market because a bear market or crash was coming. A notice such as this could cause the market to crash or a panic in the city so you must assume that no timely warning will ever be issued.

Remember, investment firms and financial professionals almost never give full sell signals. Many investment clients and readers of my books and articles have asked me over and over again: "why didn't my broker tell me to sell my stocks at the top of the bull market?  Why didn't my investment advisor liquidate my stock portfolio near the top of the market and then go to cash? Why did the Wall Street establishment financial publications or the TV and financial news remain overly optimistic about a market turnaround on the NASD, which fell from 5,000 to under 1,500?"  The simple answer is they will never tell you when to totally sell or get out of the market and nether will the same vested interests warn the citizens of NYC or stock market participants about the potential terrorist risks to their remaining savings and investment portfolios. 

What is important to the political, financial or media establishment is always the survival of the system, the markets and their own best interests, then we come in last. Any politician that warns of this risk would forever be out of politics if they had the personal integrity and courage to give this warning and nothing happened. Any investment firm that recommended all their investment clients to sell stocks and go to cash would be out of business if the crash did not occur or forced out of business by the regulators for helping cause the crash  if they were right. They would be damned if they did and damned if they didn't and thus in a no-win situation. 

So as the markets move up or down, the financial establishment and media constantly remain overly optimistic during the bull market phase. Then during the pullback or bear market they continually promise an upturn is just around the corner. Thus they prevent panic that might destroy the brokerage firm or do even more damage to the investment markets. All investors lose money in a major crash (except for the insiders) and misery loves company. We have an orderly down market and everyone loses but the financial firms and inside players. An outcome certainly better for the industry than the alternative no-win situation of getting out of the market. 

What Must Be Done To Protect the American Investment Markets?

1. The U.S. Financial Industry Must Immediately Create Back Up Facilities Outside the New York City Area. All of the banks and investment firms based in and around New York City must make immediate contingency plans to establish back-up operational and management facilities in locations away from New York City. If our enemies know that they can't knock out our financial markets and back-up systems, they may not attack. 

 

2. The Press and Media Should Address the Real Terrorist Risk of Weapons of Mass Destruction. The press and government must begin to honestly discuss the risk and educate the public as to how they are building a defense and a level of protection against this type of attack. We must not allow the real terrorism risk to be clouded by other timely political and natural resource wars in the Middle East. The news blackout on this serious risk to the citizens of New York City and the entire U.S. financial markets is unfortunate and counter productive.  Frankly, the more we talk about this risk and our efforts to defend this nation, the less likely they are to follow through with another attack. 

 

3. The U.S. Must Publicly Guarantee An Immediate Response If Attacked. The United States must go on record stating that any use of weapons of mass destruction against the United States homeland would result in an immediate overwhelming response against all terrorist groups and existing nations that have supported, harbored or provided WMD to these groups now or in the recent past.

4. Israel Must Also Make A Public Guarantee.  They too must publicly state that this type of attack against the 2 million Jewish/Americans in New York City will would be considered the same as an attack by weapons of mass destruction on the state of Israel. 

 

5. We Must Get the Real Terrorists Now Before It's Too Late!  Our military must pull out all stops in their determination to quickly kill bin Laden and destroy his and other terrorist networks around the world. This action must never be allowed to degenerate into a land war or the long-term occupation of an Islamic nation. We must act quick as New York and the future of the U.S. financial markets may well be at risk.  

 

6. Protect Your Personal Savings and Investment Portfolios.  If you are worried about the risk of another devastating attack on NYC and our financial markets, it would be prudent to consider the benefits of global diversification. Diversify out of the dollar and American investment markets into the Euro and Swiss Franc and non-targeted European stock markets that would not be so negatively impacted from a major terrorist attack.  

 

7. Diversify and Transfer Your Portfolio To a Custodian and Advisor In a Jurisdiction Not At Risk of Terrorist Attack.  No terrorist organizations are threatening Austria, Switzerland, France, Germany, Italy, Canada or the Isle of Man. I believe these locations are immune from likely terrorist attack due to their unbiased foreign policy, therefore, each of these jurisdictions are appropriate safe havens for the domicile, investment management and day to day administration of your funds invested outside of the U.S. financial markets and infrastructure. 

 

8. Consider Moving the Major Portion of Your American Portfolio & Retirement Funds Out of New York City Financial Firms Now!  If you are dealing with an American bank, insurance company or investment firm headquartered on Wall Street consider switching your relationship to a more regional firm not headquartered in New York City. Also, review your monthly brokerage, mutual fund, annuity or investment advisor statement and make sure the custodian of your assets isn't based in New York City as this is often the case for regional firms. Note, many of the custodians are headquartered in Boston and we do not feel Boston is a major target for terrorism.

 

Legally and following all reporting requirements, diversify out of the jurisdiction of U.S. markets and regulators to protect yourself should a future attack force a much longer closure of our markets and banking system. Remember liquidity is always king in a financial crisis and there might be no liquidity with either your bank or brokerage firm in the event of this type of attack. Finally, keep copies of your statements and consider brokerage firms, mutual funds and investment advisors not based in the New York area.

Our nation's foreign policy of intervention around the world has undoubtedly helped cause the hatred leading up to the current conflict. But now is not the time to discuss our past mistakes or to cast blame. Do not allow pressure by the Washington politicians and financial elites to keep this important topic and threat blacklisted from the American public, or out of your mind as a potential threat to your wealth. I believe this threat to your portfolio and financial well being could well be the greatest risk to American investors since the Crash of 1929 and the Great Depression.

Our political leaders have failed to follow the wise counsel of George Washington with regard to a balanced policy in foreign  affairs and minimal military intervention around the world. We are now suffering the consequences with this terrorist war on America. I fear, if we don't begin today as a nation, a people and as investors to follow another sound bit of advice from George Washington, that we will pay a price far higher in death, destruction and economic disruption.  

 "If we are wise, let us prepare for the worst."      - George Washington

Prepare for the worst in your financial affairs, investment diversification and asset protection structures and pray the worst never happens!

Ronald Holland - For more information go to http://www.ronaldholland.com

For Additional Reading and Research:

Case Study: Nightmare on Wall Street

Al Qaeda's nuclear option

Disaster Waiting To Happen

Report From Haaretz Israel News: Al-Qaida Has Obtained Tactical Nuclear Explosives

The Next Terrorist Attack May Be More Severe

 

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1 The U.S. Trust Survey of Affluent Americans XXI: June 2002, page 3

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