June 20, 2017
Every day brings another scary headline from the Middle East — which
makes it easy to treat them as background noise rather than a clear and
present danger. But the latest batch is reminiscent of the Balkans circa
1914, which means it may be time to tune back in. Some examples:
A US Navy jet shot down a Syrian warplane. Syria is a Russian client state, so this puts the US and Russia on opposite sides in a shooting war.
Russia warned the US that it takes the destruction of its client’s military assets seriously.
It suspended the hot line Washington and Moscow have used to avoid
collisions in Syrian airspace and threatened to target US aircraft.
Iran has begun launching missiles into Syria targeting ISIS. This
is new in at least two ways: 1) Iran hasn’t used those particular
missiles in decades, and 2) it was not previously active in Syria. This
escalation from advising the Assad regime to actually killing people and
blowing things up adds another player on Russia’s side against the US.
Iran and the US trade threats.
US Secretary of State Rex Tillerson accused Iran of destabilizing the
region and promised that the United States would support “those elements
inside the Islamic Republic which would bring about peaceful government
transition.” Iran called those remarks “unwise and clear meddling in
Iran’s internal affairs.”
Saudi Arabia claimed to arrest members of Iran’s Revolutionary Guard
who were attacking a Saudi offshore oil facility, and said that three
of the attackers were being interrogated. One day later Iran accused
Saudi Arabian border guards of opening fire on Iranian fishermen in the
area, killing one of them.
The Saudis and Iranians are leaders of Islam’s two main factions, the
Shiites and Sunnis. This makes them natural rivals, but until now
they’ve mostly sparred through proxies rather than directly. Here again,
the conflict is going from cold to hot.
And that’s in just the past few days. The old stuff that caused most
Americans to tune out hasn’t gone away: The Syrian war continues to
rage, the Saudis and their allies continue to bomb Yemen even further
back into the Middle Ages, Israel continues to build new settlements in
Palestine and threaten to take out Iran’s nuclear facilities, ISIS is
still burning and beheading its victims on YouTube, and Turkey keeps
slipping further into dictatorship.
The difference is that the major players are now bumping up against
one another. All it will take is for one fighter pilot or destroyer
captain to miscalculate and kill another major powers’ soldiers, and –
as in World War I – these interlocking alliances might pull in everyone
else. And there’s not a thing the average person can do about it.
The resulting chaos will have at least one predictable result: All
pretense of fiscal and monetary discipline will go out the window in the
rush to move people and machines into the theater. If you think we’re
over-indebted and due for a currency crisis now, just wait.
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Source: Sprott Money