Me? I love to travel. I would much rather create amazing memories, explore new cities and countries, eat adventurous food and try new experiences than accumulate excessive material possessions. As a matter of fact, I actually find it challenging and enjoyable to figure out a new city’s public transportation system — and do my best to take subways, trams and trains rather than taxis around town and to and from the airport.
I got to thinking about this in the past couple of days after the French terrorist attacks. As you may recall, I just gave a presentation to our German Safe Money Report readers in Hamburg. I spent some time sightseeing there, and in Amsterdam, before heading home. I last made it to Paris in early 2010 on a weekend trip via the Eurostar high-speed train from London.
|The immediate reaction to the terror attacks could bring a decline in travel and tourism.|
While we haven’t seen any significant attacks in two out of four of those cities, Germany is at the forefront of the European migrant crisis debate. It has also been an active participant in anti-terror investigations. Raids were reportedly conducted in the country today in conjunction with the French attacks. The high-speed train attacked by a gunman this summer was also traveling from Amsterdam to Paris, though fortunately, U.S. off-duty servicemen overpowered him. Then today, a soccer match between Germany and the Netherlands was scrubbed in Hannover due to a “concrete” security threat.
Bur frankly, I didn’t think twice about making the recent trip or my other one a half-decade ago. I wouldn’t even if I was traveling now in the wake of the Paris strike. And once we get through a wave of knee-jerk, short-term cancellations, I don’t think ISIS will succeed in scaring people away from traveling — in Europe or elsewhere — either.
Just look at what happened after 9/11. The terrible attacks here on our own soil led to a few weeks of empty flights, hotels and cruise cabins. But Americans got back to living their lives before long, and refused to be cowed into hunkering down in their homes.
Sure, you’ll see longer lines at security if you fly to Europe now. The Continent’s train stations will feature beefed-up security as well, with spot checks and other measures. I would expect to see heavily armed soldiers and police at key tourist sites, too.
|World travel: exploring new cities and cultures|
But Parisian officials have already reopened the Eiffel Tower and the Louvre, likely as a symbolic gesture to signal to the world that the city will power through this. That kind of resilience in the face of terrorism should be expected.
The bigger issue is really the underlying, fundamental weakness of the global and European economies. That’s what will determine how many tourists flock to the Continent in the months ahead.
Just as I didn’t recommend selling travel stocks as soon as the Paris news struck, I wouldn’t recommend buying them now until we get more clarity on the outlook there. But I also wouldn’t recommend hunkering down and avoiding all that this world has to offer just because cowardly, backward-thinking extremists want to scare us.
That’s my take anyway. What about you? Have you traveled to Europe recently, or are you doing so soon? Are you rethinking the decision in the wake of this latest attack? What do you think about the prospects for the travel industry overall? Will the Parisian attacks hurt these companies, or will they bounce back quickly? Let me hear your thoughts at in the comment section below when you have a chance.
Several of you weighed in on the broader fight against ISIS, the potential long-term impacts of the Paris attacks and what might ultimately happen here on American territory. So I’d like to cover those comments now.
Reader Howard said more conflict in Europe is inevitable due to religious and cultural differences. His take: “Clearly on the surface, the terrorists are spoiling for a fight, or are they just trying to spread Islam around the free world. Consider the massive problems in cultural terms alone for Germany. The Germans will not change and neither will the refugees. Doesn’t make for a peaceful outcome.”
Reader N.S.F. said that it won’t be long before we face domestic threats, offering this view: “Paris and the other attacks are what happen when you don’t control your borders. It’s coming here. It’s just a matter of time.”
Reader James J. had a suggestion about what we should do in response: “It’s time for the American people to be armed. We should be able to protect ourselves. No one else can against this kind of attacks.”
As for the battle against ISIS/ISIL on its home turf, Reader Joe said: “We and our allies are dismantling ISIL daily. Of course we take out fuel convoys. It is reaching the point where if they poke their heads up, they will be met by a Warthog as we take out their command structures daily.
“We are conducting a wise war, one that spares our troops. I’ll take that over bombastic swagger from any chicken hawks and those who support perpetual wars for the benefit of profiteers.”
But Reader Caduceus said we need to take the fight to ISIS as aggressively as possible. His take: “It’s really a bit late to start telling us what we should or shouldn’t have done in the Middle East. What must be considered now is whether we wipe them out or let them wipe us out.
“I don’t think being nice to people who consider that a weakness will do anything for us. We must remember Britain Prime Minister Neville Chamberlain’s statement after his appeasement policy, signing the Munich Agreement in 1938: ‘Peace in our time.’ Like hell.”
Thank you for weighing in. If you didn’t get a chance to express your views, make sure you go to the comment section below. Meanwhile, I’ll continue to monitor the latest news and developments in the Middle East and Europe — and keep you up to date with my analysis of their impact on the markets and broad economy.
Russia confirmed what the rest of the world already suspected: The charter plane that crashed in Egypt a couple of weeks ago was brought down by a bomb planted onboard. The Metrojet attack killed all 224 people on board, and the Russians followed their announcement up with fresh air and cruise missile strikes in Syria.
The Consumer Price Index rose 0.2% in October, as did the “core” index that excludes food and energy. Large increases in rents and health care costs helped drive the gains.
While many retailers have been struggling lately, Home Depot (HD) has managed to put up more impressive numbers. The home improvement retailer reported a 5.1% gain in same-store sales, topping expectations. Per-share earnings also beat forecasts, and the company sounded an upbeat note for the full year.
Interesting story from the Financial Times here on how trillions of QE dollars found their way into emerging markets. The easy money prompted massive borrowing in China, Russia, Brazil, and other nations – roughly $9 trillion in bonds and loans according to the Bank for International Settlements.
But the rising dollar, falling commodity prices and slowing global growth are causing those loans to sour at a rapid rate. That’s intensifying global deflationary pressures.
Is that the kind of negative spiral that will drag U.S. stocks down too? What do you think the latest inflation figures suggest about the economy? And how will Russia’s aggressive bombing efforts impact the fight against ISIS? Share your thoughts below.
Until next time,
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