In keeping with the helicopter theme, another article has now appeared to weigh in on whether the recent helicopter shoot downs in Iraq constitute a new trend. According to the AP, the U.S. Army's vice chief of staff, reported today that there is no basis for believing that insurgents' recent success in shooting down U.S. helicopters in Iraq means they have developed new attack methods or discovered new U.S. vulnerabilities.
I agree that it's too early to tell whether this is actually a new trend or simply a statistical anomaly. But I think the losses highlight the determination and ability of the enemy that the U.S. forces face in Iraq. After all, the U.S. has the best trained and best equipped armed forces in the world and you have to be exceedingly tough and determined to engage them successfully. Whether or not this is a new trend, the recent losses point to the fact that the U.S. is not fighting a static enemy, but an enemy that is cunning and adaptive.
Looking ahead in time, what would be the effect on Gold if the U.S. would be forced to withdraw from Iraq? It's unclear, but obviously it would depend on the terms on which the U.S. withdrew and what would happen afterwards in Iraq. Obviously, two scenarios that would be fairly Gold bullish in the long term would be if Iraq fell under the sway of militant Islam or if it became a state closely aligned with Iran, allowing Iran to control both sides of the Hommuz Strait, which is a major oil shipping route. In the short term, this might be offset somewhat by the fact that the withdrawal would obviate the immense dollar dilutive expenditures that are required to keep the War going as well as putting a stop to the steady material and personnel losses.
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