Mark Twain famously said that “history doesn’t repeat itself, but it does rhyme”. As investors consider the ramifications of turmoil in the Middle East and north Africa, I can’t help but reflect on the political revolutions that swept through eastern Europe and the Soviet Union in the early 1990s.

During that period, the winds of change that brought the collapse of communist regimes also precipitated turmoil in the financial markets and severe recessions. Along these lines, I believe the events in the MENA region today will perpetuate an economic domino effect that may result in dramatic shifts across the investment landscape over the course of the next year.

As we have already begun to see, the mere threat of a disruption to the world’s oil supply has caused the price of crude oil to jump. Short of a threat to Iran or Saudi Arabia, oil at $200 per barrel is unlikely. Nonetheless, as the democracy movement spreads across the Middle East, there is a real prospect that perceived pressures may push prices to $125 or higher. If energy prices linger at such elevated levels, the next domino will be heightened inflationary pressures around the world, particularly in emerging markets. Before the events in the Middle East, the Bric countries – Brazil, Russia, India, and China – needed to take dramatic policy actions to cool overheating markets and fight inflation. If energy prices surge, there will be even greater pressure for meaningful monetary policy tightening across all emerging market economies in 2011.