Saudi Arabia

Someone wants to get the United States into a war with Syria very, very badly.  Cui bono is an old Latin phrase that is still commonly used, and it roughly means "to whose benefit?"  The key to figuring out who is really behind the push for war is to look at who will benefit from that war.  If a full-blown war erupts between the United States and Syria, it will not be good for the United States, it will not be good for Israel, it will not be good for Syria, it will not be good for Iran and it will not be good for Hezbollah.  The party that stands to benefit the most is Saudi Arabia, and they won't even be doing any of the fighting. 

The most likely path of collapse to take place within the U.S. includes economic destabilization caused by a loss of the dollar's world reserve status and petro-status.  This fiscal crisis event will likely not occur in the midst of a political vacuum.  The central banks and international financiers that created our ongoing and developing disaster are not going to allow the destruction of the American economy, the dollar, or global markets without a cover event designed to hide their culpability.  They need something big.  Something so big that the average citizen is overwhelmed with fear and confusion.  A smoke and mirrors magic trick so raw and soul shattering it leaves the very population of the Earth mesmerized and helpless to understand the root of the nightmare before them.  The elites need a fabricated Apocalypse. Enter Syria...

WWhile there may have been a verbal attempt by the Obama administration to diffuse Syrian tensions in the aftermath of Thursday's shocker out of the House of Commons, the action on the ground so far is hardly conciliatory. Or rather water, because a sixth US warship has now anchored in proximity to Syria, joining the recently arrived fifth destroyer USS Stout, which joined the warships already "breathing down Assad's neck." From AP: "Five U.S. Navy destroyers - the USS Gravely, USS Mahan, USS Barry, the USS Stout and USS Ramage - are in the eastern Mediterranean Sea waiting for the order to launch. And the USS San Antonio, an amphibious assault ship has now joined them. The USS San Antonio, which is carrying helicopters and can carry up to 800 Marines, has no cruise missiles, so it is not expected to participate in the attack. Instead, the ship's long-planned transit across the Mediterranean was interrupted so that it could remain in the area to help if needed." So in addition to a cruise missile based force, the US is now bringing in the marines? The justification that they are there "just in case" seems a little shallow in context.

If Barack Obama is going to attack Syria, he is going to do it without the support of the American people, without the approval of Congress, without the approval of the United Nations, and without the help of the British.  Now that the British Parliament has voted against a military strike, the Obama administration is saying that it may take "unilateral action" against Syria. Unfortunately for the Obama administration, the world is not buying it.  In fact, people are seeing right through this charade. The following are 25 quotes about the coming war with Syria that every American should see...

The present picture for the oil price looks increasingly bullish once more. Citi asks, is this a replay of the dynamics seen in the 1970’s? We hope not... but the feedback loop (from oil prices) to the economy and markets is undeniable...

As we showed mere days ago, it appears the truth of who the real puppet-master in the Middle-East is becoming plainer to see. The incredibly frank discussion between Saudi's spy-chief Prince Bandar and Russia's Putin exposed a much deeper plot is afoot and the following details from the actual people on the ground in the chemically-attacked region of Syria suggest Obama is playing right into the Saudi's plan. While Obama is 'certain' that the chemical attacks took place on al-Assad's orders, as MPN reports, "from numerous interviews with doctors, Ghouta residents, rebel fighters and their families, a different picture emerges. Many believe that certain rebels received chemical weapons via the Saudi intelligence chief, Prince Bandar bin Sultan, and were responsible for carrying out the dealing gas attack."

The UK may be out, but Saudi Arabia isn't taking any chances. Moments ago, Reuters reported that the regime which as we reported is behind the entire conflict in Syria (hint: nat gas) has raised its level of military alertness in anticipation of a possible Western strike in Syria, sources familiar with the matter said on Friday.  Saudi Arabia's defense readiness, their version of DefCon, has been raised to "two" from "five", a Saudi military source who declined to be named told Reuters. "One" is the highest level of alert. "It is a must, no one knows what will happen," he said. And so all those who thought there would be no war and sold off gold and crude, are suddenly caught short. More curious is why Saudi is leaking this information to the media: another provocation, and an attempt to accelerate a conflict which is rapidly fizzling? Remember: for Saudi Arabia "no war" is the worst possible outcome. If so, expect more mysterious "chemical attacks" in the coming hours and days to cement the Western resolve to blow up Assad.

Those curious if the Indian Rupee cratered once again in overnight trading will be disappointed: following the previously reported intervention by the RBI in which it would provide US dollars only to crude companies, the currency rose strongly at the open only to fade and trade rangebound before closing in the mid 67 range. In other words, much more will be needed by the central bank to stabilize the currency, the markets and the economy. The main overnight story, however, remains the Syrian conflict and market reactions to it. Stocks traded higher in Europe early today, with credit spreads tightening as market participants scaled back expectations of an imminent strike on Syria after US Defense Secretary Hagel said that the US will act on Syria only with international collaboration. Of note, the G-20 is set to take place next week where Syria is widely expected to be the hot topic for discussion among global world leaders. But while futures ramped in early trade following a spike in the USDJPY over 98, they have since retraced most of their upside, and crude is back to nearly unchanged.

If SocGen is right in its just released oil price forecast in a "Syrian war world", then the global economy is about to undergo an apoplectic shock the likes of which have not been seen since the summer of 2008, when Lehman brothers had to be taken under to generate the deflationary shock sending crude from $130 to $30 in the matter of days. The French bank's forecast in a nutshell: "Base case scenario: $125 for Brent. We believe that in the coming days, Brent could gain another $5-10, surging to $120-$125, either in anticipation of the attack or in reaction to the headlines that an attack had started. In our base case, we assume an attack begins in the next week. Upside scenario: $150 for Brent If the regional spill over results in a significant supply disruption in Iraq or elsewhere (from 0.5 – 2.0 Mb/d), Brent could spike briefly to $150." And if indeed 2008 is coming back with a vengeance, the next question is who will be this year's unlucky Lehman Brothers?

The increasing likelihood of some form of limited US led military action in Syria is compounding concerns about the stability of the world’s key oil producing region and Barclays warns that it will likely exert upward pressure on prices until the nature of the possible military intervention becomes apparent. But the bigger risk for the oil market is the potential for the Syrian conflict to spread to neighboring producing countries and imperil regional output, as the Syrian conflict is fueling broader sectarian tensions across the entire Middle East and has become something of a proxy war. The problem for global oil prices is that all of this Middle East volatility is taking place against the backdrop of a recent rise in unplanned outages in the oil market outside Syria. In sum, Barclays is concerned that with geopolitical tension and physical outages on the rise, crude oil markets are at an inflection point.

Yesterday the Telegraph's Evans-Pritchard dug up a note that we had posted almost a month ago, relating to the "secret" meeting between Saudi Arabia and Russia, in which Saudi's influential intelligence chief Prince Bandar bin Sultan met with Putin and regaled him with gifts, including a multi-billion arms deal and a promise that Saudi is "ready to help Moscow play a bigger role in the Middle East at a time when the United States is disengaging from the region", if only Putin would agree to give up his alliance with Syria's al-Assad and let Syria take over, ostensibly including control of the country's all important natgas transit infrastructure. What was not emphasized by the Telegraph is that Putin laughed at the proposal and brushed aside the Saudi desperation by simply saying "nyet." However, what neither the Telegraph, nor we three weeks ago, picked up on, is what happened after Putin put Syria in its place. We now know, and it's a doozy.

President Bashar al-Assad stressed that "Syria is a sovereign country that will fight terrorism and will freely build relationships with countries in a way that best serves the interests of the Syrian people." As Syrian TV reports, in an interview with the Russian newspaper of Izvestia, President al-Assad stressed that "the majority of those we are fighting are Takfiris, who adopt the al-Qaeda doctrine, in addition to a small number of outlaws." On the alleged use of chemical weapons, President al-Assad said that the statements by the US administration, the West and other countries were made with disdain and blatant disrespect of their own public opinion, adding that "there isn’t a body in the world, let alone a superpower, that makes an accusation and then goes about collecting evidence to prove its point." Al-Assad stressed that these accusations are completely politicised and come on the back of the advances made by the Syrian Army against the terrorists.

Overnight the emerging market rout continued, with the India Sensex down another 3.18%, the Philippines tumbling 4%, Jakarta down 3.7% and Dubai crashing 7%. A driving factor continues to be the fear over an imminent air campaign launched at Syria, leading both WTI and Brent higher by 1%, and gold finally breaking out above the $1400 tractor beam, and printing at $1412 at last check, a hair away from a 20% bull market from the lows. In other news, the market is once again "surprised" to learn that Summers, who as we have been showing for over three weeks is the frontrunner for the Fed chair, is the frontrunner for the Fed chair according to CNBC. Of course, there is nothing preventing this from being the latest trial balloon (and nothing that suggest Summers will actually be hawkish as conventional wisdom seems to think: the guy basically works for the financial sector) but futures aren't waiting to find out, and US traders are walking in this morning to a red screen with ES down just over 10 point and sliding. Any minute now the great unrotation from stocks into bonds (10 Year was 2.77% at last check) is about to be unleashed. And if Obama actually goes to war (without talking to Congress of course), watch the bottom fall from the market.

Following John Kerry's press briefing, it appears the Obama administration seems absolutely determined to help radical Islamic jihadists that have beheaded Christians, that have massacred entire Christian villages, and that have pledged loyalty to al-Qaeda topple the Assad regime and take over Syria.  Yes, the Assad regime is horrible, but if these jihadist lunatics take control it will destabilize the entire region, make the prospect of a major regional war much more probable, and plunge the entire nation of Syria into a complete and utter nightmare.  This is setting up to become a colossal foreign policy disaster for the United States.

Now that the US has made up its mind once more and "knows" that Wednesday's chemical attack in Syria was conducted by the government and targeting the "rebels", even as the "developed" west calls for a UN investigation to determine just that, and as the US (including the CIA), Israel and Jordan have already sent an advance military force into Syria to conduct more false flag provocations and blame it on the regime, the only next step is to soften and prepare popular opinion for what comes next. And what comes next is on the front page of the WSJ this morning: "The U.S. began refining its military options for possible strikes in Syria, officials said... Officers at the Pentagon on Thursday were updating target lists for possible airstrikes on a range of Syrian government and military installations." Then again we have seen all this before. Surely, one of these times the administration will actually go ahead and push the button instead of just talking about it.