Watch Syria – Not Libya

Map of Syria

Image via Wikipedia

This is my read of geopolitical stirrings across the Middle East and how it may be a catalyst for weakness in the equity markets.

Tunisian, Egyptian and Libyan uprisings are a sideshow to the main event. Investors should watch the developments in Syria.

The violence in Syria seems to be on a grander scale, yet America is more vocal about Libya’s Ghaddafi. Why?

The answer and concerns lie with Iran.

Iranian influence through political arms such as Hezbollah in Lebanon, Hamas in Palestine and the Muslim Brotherhood in Eqypt is putting the literal geographic squeeze on Israel which is overseen by the Iranian Revolutionary Guard.

Iran’s friendship with Syria sees them funding projects that range from military infrastructure and weaponry, gas pipelines and establishing banks. This possibly makes Tehran the most politically stable and powerful government in the Middle East, today.

Turkey’s political instability of late isn’t helping either.

The catalyst for real global geopolitical turmoil depends on what happens in Syria.

If the Syrian situation escalates, the U.S. will be placed amongst difficult circumstances involving Iran, Israel, nuclear & chemical weapons, Oil and Gas.

A rise in the oil price (Iran is the world’s fourth largest oil producer, OPEC’s second largest producer behind Saudi Arabia and has four times the reserves of Libya) could be the catalyst that sends equity markets into a funk that lasts more than a meagre 10% correction.

The timing of such an event could also see various Western political figures lose re-election as military spending continues higher due to new deployments and energy and food inflation rises.

If you haven’t watched Middle East developments over the years, the near term could, unfortunately, be the most explosive, condensed episode.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: