No sane person wants war.
But, with the global economy in tatters, a serious war looms.
It’s difficult to know where it will start…
North Korea and the Middle East have become the main hotspots. If war truly breaks out, we could see the first major conflict of the 21st Century.
I don’t say this to scare you. And it’s not a topic that I enjoy talking about. But someone has to warn you about the real risks that we’re facing. The loss of life in a major conflict is likely to be devastating. But, unfortunately, with insane politicians running the world, there is nothing we can do to stop that.
What you can do is prepare yourself financially for the worst possible scenario. If this potential war escalates, at least your wealth won’t be erased. That may help your family cope emotionally (as much as possible) should the world turn upside down.
With that in mind, let’s turn to the Middle East. I’ll talk more about North Korea another day.
For the record, I reported the following analysis in September 2014. That date seems ancient today. But the analysis is more relevant than ever. The Middle Eastern conflict has grown around Syria since 2013.
The Middle East power play
In 2013, Western leaders accused Syrian President Bashar al-Assad of using chemical weapons against his own people. And while we dispute that claim for numerous reasons, one argument stands out above all others: Bashar al-Assad supports Iran — Saudi Arabia’s arch nemesis — in the pipeline war.
It comes down to religious beliefs.
The governments of Iran, Iraq and Syria are controlled by Shi’ite Muslims. Whereas the governments of Saudi Arabia, Qatar, the United Arab Emirates and Jordan are ruled by Sunni Muslims.
When it comes to controlling energy, these groups have historically backed their own circle. That’s important when you analyse the world’s largest natural gas and condensate field — South Pars and North Dome. It’s shared by both Iran (Shi’ite ruled) and Qatar (Sunni ruled).
Both the Shi’ites and Sunnis want to build their own gas pipeline network. You can see this on the map below:
[Click to enlarge]
The Shi’ites want to use the Iran-Iraq-Syria-Lebanon-Europe route to pipe their gas to Europe. That route is shown in red. The Sunnis want the Qatar-Saudi Arabia-Iraq-Syria-Turkey-Europe route. That route is shown in purple.
A lot of powerful outside parties also have chips on the table.
Russia and China are siding with the Shi’ites. They support Assad’s Syria. On the other hand, the US supports the Sunnis. It’s been a long-term friend of ‘Saudi America’ for decades.
Here’s where it gets interesting…
Since the Iran Nuclear Accord in late 2015, which allowed the country to resume oil exports and rebuild its economy, it has gained a tremendous amount of power in the Middle East. Qatar — the world’s richest nation per capita — even pivoted towards the country a few months back. That’s surprising given its religious beliefs.
The Telegraph reported on 24 August last year:
‘Qatar has defied Saudi Arabia by strengthening its diplomatic ties with Iran — rather than cutting them back as Saudi Arabia and its allies have demanded.
‘Saudi Arabia and three other Arab states have been blockading Qatar since early June and have demanded that Qatar curb its ties with Iran, as well as shut down its al-Jazeera television network and expel extremists from its territory.’
Qatar’s move puts the Sunni pipeline plan in doubt. That’s why Saudi Arabia nearly started a war with the country last year. But US President Donald Trump warned the Shi’ite leaders about taking military action. He said that removing the Qatari monarchy would set off a crisis across the Middle East, which would boost Iran’s aspirations in the region.
Trump is a strong critic of Iran. He believes it’s building nuclear weapons, and that it’s a breeding place for terrorists. The US president is aligned with Saudi Arabia. Last June, he sold nearly US$110 billion dollars’ worth of weapons to the country.
A war building
The Syrian pipeline story is a key part of the regional battle between Saudi Arabia and Iran. That’s why Saudi Arabia might ignore Trump and provoke a crisis. That is, if Qatar continues to pivot towards Iran.
In the meantime, the US establishment’s goal to isolate Russia continues. It’s pushing the country to the brink of war.
Everyone has a lot on the table in this game of political brinksmanship. And the region is extremely volatile.
I hope I’m wrong about the scale of the coming conflicts. If I’m not, you have to question whether your portfolio is prepared for a global war. Cryptocurrencies may be the flavour of the day at present. But would they survive war?
In my view, you might potentially be better off backing a few solid gold explorers.
Analyst, Gold Stock Trader