Iran

“Sooner or later, everyone sits down to a banquet of consequences..." – Robert Louis Stephenson

So if you really want to make “refugees” the election issue “du jour”, one can waste a lot of time watching the mainstream incumbent parties bicker over the “right” number of refugees to allow into Canada or how much taxpayer money to throw at aid, or even whether more Canadian “boots on the ground” should be headed over there on various “peace keeping” escapades... or, you could ask the really hard hitting questions...

Now that Europe's migrant crisis is making international headlines on a nightly basis, France and Britain are set to use the influx of aslylum seekers as a pretext for airstrikes in Syria. The timing could not be more convenient as new "intelligence" suggests that Russia is expanding its presence in the Assad stronghold around Latakia. For its part, Germany is out warning the Kremlin against "military engagement."

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The prosecution of a Swedish national accused of terrorist activities in Syria has collapsed at the Old Bailey after it became clear Britain’s security and intelligence agencies would have been deeply embarrassed had a trial gone ahead, the Guardian reported.  "The prosecution abandoned the case, apparently to avoid embarrassing the intelligence services. The defence argued that going ahead with the trial would have been an “affront to justice” when there was plenty of evidence the British state was itself providing “extensive support” to the armed Syrian opposition. That didn’t only include the “non-lethal assistance” boasted of by the government (including body armour and military vehicles), but training, logistical support and the secret supply of “arms on a massive scale”."

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In hot spot after hot spot in the Middle East, U.S. and Saudi objectives and priorities diverge, even if in some loose sense they are considered to be on the same side. It ought to be astounding that a place this far removed from the liberal democratic values with which the United States likes to be associated, even without considering the aforementioned divergence of objectives elsewhere in the region, still is considered a close partner of the United States. The usual, and to a large degree valid, explanation is that, as Friedman puts it, “we’re addicted to their oil and addicts never tell the truth to their pushers.”

"We’re exhausted by your antics and empty promises. If we so much as sniff continued nuclear development, we are going to covertly and overtly stop you, even if that means military action and pre-emptive strikes on your nuclear facilities."

Today the US made a dramatic diplomatic escalation ahead of what is now assured to be the second major showdown between the US and Russia in Syria, over a Qatari gas pipeline no less, when according to Reuters, it asked Greece to deny Russia the use of its airspace for supply flights to Syria, a Greek official said on Monday, after Washington told Moscow it was deeply concerned by reports of a Russian military build up in Syria.

The violence in two of the world's conflict hot spots escalated materially over the weekend after a Houthi rocket attack in Marib killed 45 UAE soldiers, prompting the delpoyment of an additional 1,000 Qatari troops and triggering stepped up Saudi airstrikes. Meanwhile, in Turkey, roadside bombings blamed on the PKK mean Ankara will look to plunge the country deeper into civil war ahead of elections in November. 

As an investor, you have enough to be concerned about just taking into account factors like inflation, deflation, Fed policy and the overall state of the economy. Now you have another major threat looming – financial warfare, enabled by cyberattacks and force multipliers. What can you do to preserve wealth when these cyberfinancial wars break out? The key is to have some portion of your total assets invested in nondigital assets that cannot be hacked, wiped out or disrupted by financial warfare. The time to take defensive action by acquiring some non-digital assets is now.

To summarize: in order to get the Saudis to "agree" to the Iran deal, all the US had to do is remind King Salman, that as long as oil is where it is to a big extent as a result of Saudi's own record oil production, crushing countless US oil corporations and leading to the biggest layoffs in Texas since the financial crisis, the country will urgently need access to yield-starved US debt investors. If in the process, US corporations can invest in Saudi Arabia (and use the resulting assets as further collateral against which to take out even more debt), while US military corporations sell billions in weapons and ammo to the Saudi army, so much the better.

China’s islanding building on the four-mile-long and two-mile-wide Subi Reef in the South China Sea has put The US in a tight spot. To protect its ally from China’s aggression, The US will be left with little choice but to constrain China by military means. However, the US won't directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force and the only way for China to level the playing field is to apply nuclear weapons. The nuclear nature of Sino-American warfare will make both the world no.1 and no.2 economy the fallen giants.  So there is a possibility that The US might use its oil weapon instead to strike at the core of China’s weakness - it’s huge dependence on oil import.

The EIA released a report this week that showed that there would be little effect on gasoline prices if the U.S. government lifted the ban on crude oil exports. In fact, gasoline prices could even fall because refined product prices are linked to Brent much more than WTI, so more supplies on the international market would push down Brent prices. The report lends credence to the legislative campaign on Capitol Hill to scrap the ban, a movement that is picking up steam. On the other hand, although few noticed, the EIA report also said that the refining industry could lose $22 billion per year if the ban is removed. So far, many members of Congress have been reluctant to weigh in on this issue for exactly that reason: it pits drillers against refiners, both of which are powerful political players.

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