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There has been a lot written lately about the growing problem of pirates hijacking merchant ships off the coast of Somali. I'm sure a question you've asked yourself lately is how can it be that these million dollar vessels carrying valuable cargo can be so easily commandeered by rouge pirates in small tiny boats. On the surface it sounds crazy, doesn't it. Almost as crazy as causing the entire banking industry to fall on 30-1 leverage.
And it is. Just like the mortgage meltdown and the subprime crisis, the escalating problem of ships being hijacked by somali pirates is being caused by policies put in place by the insurers of these vessels. It's very simple. The insurance companies don't want the crews to be armed. With todays sophisticated weaponry including night vision goggles, high powered rifles, and I'm sure plenty of other goodies that are currently in use by our military, it wouldn't take much to stop these hijackings. But to the insurance companies, it would be too risky for them- forget about the crews and their safety. They simply pay the million dollar ransom, consider it a cost of doing business, and then pass this added cost on to the shipping companies in the form of higher insurance premiums. And of course these costs are then finally passed on to the end consumer- you, in higher prices for the goods you buy at your local store or supermarket. The loss of an entire vessel, not to mention a potential lawsuit if someone accidently killed the wrong guy is just to risky.
And that's why every time a ship is hijacked, it's really the American consumer being pirated, because now he has to pay more for what was being shipped. This is what happens when insurance companies create policies geared more to protecting their profits rather than consider the added costs that are going to be passed on by this type corporate thinking. So even though putting armed guards on these merchant ships would most likely put an end to these hijackings and reduce the cost of goods being shipped to the benefit of the average American, this is not what the insurance companies are choosing to do. I say this is something they should do. It's time that we tell the insurance companies, YOU WILL STOP PAYING RANSOM and put armed security on these vessels because it is hurting Americans in the form of high prices for shipped goods. It makes you wonder. Who are the real pirates after all. The Somalis or the insurance companies? Think about it.
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