Zbigniew Piekarski observes that the world is turning on itself in light of declining economies and other global uncertainties.

"I want to protest against war, yesterday by lying down and today by standing up."

- Shinya Yukawa, a 22-year-old student who visited Iraq from late February to early March and took part in a "die-in" protest in Hiroshima and a rally in Osaka (Japan Today).

Have you heard about the "Nelson Technique?" Admiral Horatio Nelson (1758-1805) was one of the founding members of the British Empire, who repeatedly defeated the navies of Holland, Spain and France (both separately and together) and paved the way for Britain's domination of the oceans of the world.

In the Battle of Copenhagen against the Dutch in 1801, he was ordered by his superior, Sir Hyde Parker (who led from the rear) to cease action and withdraw. Nelson placed the telescope to his blind eye and stated, "I really do not see the signal" (which has been mistranslated as "I see no ships"). He continued the battle and snatched victory from the jaws of defeat.

That was the first and last time this technique worked. When Mohammed Saeed al-Sahaf, the Iraqi information minister, stood on the roof of Baghdad's Palestine Hotel, he tried to use the Nelson Technique (and failed) when he declared: "Baghdad is safe. The battle is still going on. Their infidels are committing suicide by the hundreds on the gates of Baghdad."

His failure, however, will not stop others from trying. Although this war could prolong the contraction and deepen it as well, official voices talk as though we have not been going through the longest recession in the post-war period. Instead, we have been through a "slow recovery" or a "sagging economy with sound fundamentals" or an economy facing "formidable barriers to vigorous expansion." (This last statement reminds me of the influence of my ex-mother-in-law).

Let us pause for a moment. This war has demonstrated once again that we as a species excel at dominating our external environment. In World War II, 9,000 bombs had to be dropped in order to guarantee that a target was hit. Now it takes one or two. In this war, more than 17,000 bombs and missiles were used, and the number of reported civilian casualties stands at a maximum of almost 1,400 (see www.iraqbodycount.net for the latest number). More than 45% of military casualties on the side of the coalition were due to human error - either outright accidents or "friendly fire" kills. Not one "human shield" was injured.

We can improve our technology at an exponential rate, but we are unable to change ourselves. Human psychology is the same now as it was when Alexander the Great and then Emperor Trajan subdued the Parthians, Medes, Seleucians and other tribes of Mesopotamia.

And after the war, what now?

Increasing unemployment, the stress of record amounts of debt, rising numbers of bankruptcies and now SARS (Severe Acute Respiratory Syndrome) are the new "uncertainties." So far, SARS has killed only about 130 people mostly in Asia and China and sickened only about 3,500. But it is the fear of it sprea-ding that seems to be having the biggest impact.

In historical terms, SARS is pretty mild. The Spanish Influenza of 1918-1919 killed between 20 million-40 million worldwide, more than the number of those who died in World War I. AIDS has claimed upwards of 20 million worldwide. So at this stage, it is important to keep things in perspective.

Another phenomena of mass psychology are the antiwar demonstrations. The last major market top was the rolling top of 1966-1968. The Vietnam War and the opposition to it by the antiwar movement highlighted this period.

Today we are once again past a market top, and the war was greeted by huge antiwar demonstrations that have gone worldwide. The protestors are determined to continue by fin-ding new grievances. Our world is turning on itself, coupled with declining economies and growing internal and external divisions. Just as latter portions of major bull markets are always times of optimism and relative peace, major retrenchments in social mood and major bear markets produce discord. We are at the earliest stages of the Kondratieff Winter, and protectionist policies, economic self-interest, social unrest and war will continue.

Of immediate interest is the proposal by Japanese finance minister Masajuro Shio-kawa that the G-7 countries and others forgive all of Iraq's debt as a way to help it get started again. Not to postpone or renegotiate it, but to forgive it.

France, Germany and Russia (christened the "Axis of Weasels" by the New York Post), to whom much of the debt is owed, will not be happy. I propose that those nations take as much of the wealth of Saddam Hussein and his henchmen as they can find in their own banks as repayment.

Hussein stole from the people of Iraq, with the direct complicity of the weasels, much of it in contravention of the United Nations' rules they so piously espouse. They have already gotten billions from Iraq, much of it illegally through Syria. And now French foreign minister Dominique de Ville-pin (nicknamed Zorro by his staff) is trying to collude with Syria and protect his rear. The Axis of Weasels should donate to the cause if it truly cares about the Iraqi people as it proclaims.

On the WSE: Since the end of January, the stock market has followed the example of Shinya Yukawa, standing up or sitting down. It jumped up early on April 7 and levitated a bit. Now, as the 10-, 20- and 40-week cycles are all projected lower from here, downward cyclical pressure will continue until the final week of May. Śmigus-Dyngus one and all.

Zbigniew Piekarski is a portfolio manager based in Warsaw. He can be e-mailed at zbigp@bipnet.pl.