Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Tuesday, November 7, 2017

Why the Saudi Purge, and Why Now?

Make no mistake, the ongoing purge in Saudi Arabia is not about corruption. If you believe that, well, leave your tooth under a pillow for the tooth fairy.The purge is about one thing, and one thing only - power. Specifically, for the power of Mohammed bin Salman. The only questions to be answered is why the power grab, and why now?

The reason why: Saudi Arabia is about to go to war with Iran. There is no doubt that Salman, or MBS as he is known, has been conducting an aggressive covert war against Iran for years now. And, when I say Iran, I mean the Shiite. It's a blood feud going back thousands of years, and both sides take it very seriously. However, until now, Saudi Arabia and Iran have been able to avoid direct war with each other by sponsoring mini-wars with client states - like Lebanon, Syria, and the like. Why is that changing now? The Saudis are losing.

Saudi Arabia's military intervention in tiny Yemen, along with its (and MBS's) staunch ally the United Arab Emirates (U.A.E.) has become a disaster. Not only have the Saudis failed to defeat the Houthis (Shia), but they have lost immense prestige and influence in the Arab world and elsewhere for the failure. What they have achieved is the starvation of hundreds of thousands in Yemen, vast swaps of destruction in Yemen cities, and a massive cholera epidemic affecting hundreds of thousands of Yemen's people. What they have not achieved is any decisive, or otherwise, defeat of the Houthis. Rather than withdraw from this situation, Saudi Arabia just implemented a land, air, sea blockade of the tiny country. By any standard, Saudi Arabia's action in Yemen have been not just a war crime, but a crime against humanity. Yet, you would never hear a peep about it in the western press, or in western houses of parliament.

In addition to the massive failure in Yemen, Saudi Arabia's covert war in Syria has literally blown up in its face. Depending on which organization you believe, hundreds of thousands have been killed and maimed in Syria during the last four or so years, but the result has been abstract failure. While much of Syria lays in ruins, particularly the larger cities outside Damascus, the Syrian government itself was saved by direct Russian military intervention. Saudi Arabia attempted to bribe the Russian government into staying out of Syria by promising to hold terrorists back from attacking the Sochi Olympics - at least that is what was presented in the Russian media. Having failed to convince Russia that way, the Saudis decided to conduct an oil war against Russia. Specifically, they flooded the oil market with product and then refused to freeze or cut back production bringing the price down as low as $30 US a barrel in an all-out effort to destroy Russia's resource based economy. It failed. Instead of crippling Russia financially, the Saudis blew their own legs off, consolidated the Russia-China oil relationship, and severely discredited themselves among oil producing nations.

The common theme to all of MBS's covert and overt actions has been failure. It has become quite obvious that the US and Israel, both the powers behind MBS's moves, have lost patience with the Saudi's attempts to reverse Iranian influence in the Middle East. I say "reverse" because Iran has been present in Hezbollah (Lebanon), Syria, and Yemen for years. Therefore, it's quite obvious that MBS is not responding to any "new" Iranian aggression or threat, but rather simply taking on Iran as a regional actor. In other words, MBS is the aggressor. And by relation so is the US  and Israel. There is no better evidence of that relationship than the recent meeting Jared Kushner, son-in-law of  US President Trump and well connected member of the Jewish establishment in the US, with MBS just prior to the current purge within Saudi Arabia. In case that doesn't satisfy you, then please refer to Trump's own Twitter remarks where he states MBS "knows what he's doing".

In the nutshell, MBS, with the overt backing of the US and covert backing of Israel, took almost complete reigns over the Saudi state for the purpose of going to war with Iran. MBS's statement most recent statement that Saudi Arabia was in a "state of war" with Lebanon is  just the first step. It also jives perfectly with Israel's recent bombings of Lebanon and Syria, and matches the Israeli government's position on Hezbollah to a tee. Unfortunately it smells of desperation. With the war all but lost in Syria, and quagmire in Yemen, MBS is left with one option only - go after Iran itself. There are likely a few ways such a war can play out.

Before the US invaded Iraq, a Sunni-controlled buffer existed between Saudi Arabia and Iran. As I've often said, the only real result of the US invasion of Iraq was the ability of the Iraqi people to elect their own Ayatolla. Now Iraq is dominated by Shia, and thus Iranian, influence. So, bottom-line is this, if Saudi Arabia wants to get at Iran they'll have to do it through Iraq. Iraq and Iran are now strong allies - they're fought together to liberate Iraq from ISIS, and they'll keep fighting together to do the same in Syria - namely against the Kurds. Not to put too fine a point on it, but within the last month or so MBS has made it clear a war with Iran won't be fought on Saudi soil - so there's a process of elimination there.

So if you want to know why MBS has managed to clear the decks of all distractions in Saudi, the answer is that he is going to war with Iran directly and wants complete control of the apparatus of state to do so. If you wonder why now, the answer is he intends to go to war very soon. He has the complete backing of the US, and has given his own green light to Israel taking on Hezbollah in Lebanon - likely simultaneously. No question all of this smells like "Plan B", but we can all see what has happened to "Plan A".

What is key in all of this to remember is what aims all this serves. The world-wide economy is in a state of stagnation - essentially. Central banks have failed to create any real inflationary pressures that might allow them to raise interest rates. Oil is similarly stuck in the post-Saudi oil warfare blues. My feeling is there is a perception among those up high that a massive war in the Middle East will cause inflation to skyrocket world-wide. Saudi would theoretically benefit from a huge price increase in oil - as would the US. Russia's southern border, visa-via an Iranian defeat, would be massively exposed which of course is a major win for the US. Which brings me to a final point-Saudi's partial privatization of its huge state owned oil firm. Does MBS really want to stir Saudi Arabia on a post-oil course and diversify its economy? Or, is he raising a war chest to fight a to-the-death war with Iran? My bet is the latter. A full on war with Iran will likely triple the price of oil, so the Saudis will still get their much loved money, but they need cash to fight a big war, and their failed oil war has left them near a recession. Is it any wonder Trump encouraged Saudi Arabia via Twitter to conduct that initial offering on the New York Stock Exchange - hours before the purges started?

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