Will France Screw America in Syria? $GAZ $OIL $XOM $COP $BP $TOT

Politics makes strange bed fellows. A left wing government in France wants to back an Obama Whitehouse in a punishment action against Syria. France with a militant Muslim population sees thing differently.

Before the USA welcomes the French with open arms it is time to open eyes. France with it’s colonial past has long been involved in Syria. This dates back to when France and Britain were carving up the middle east for their own colonial purposes.

The French to counter the influence of other Arabic factions helped support the Alawites and brought them into the military. Eventually this seeded Alawite control of the military and led to their ability to establish a military dictatorship.

So much for the moralization. The Middle East from the Western point of view is about Oil. Economic engines run on Oil. Most of Iraq’s oil flow through the Straights of Hormuz and are subject to the vagaries of Iran’s intentions.

Syria provides a strategic land bridge for pipelines to the Mediterranean which by pass Iranian threats and cut down on shipping times through the Suez Canal. The pipelines will be enormously profitable and provide for energy security for their owners.

France will engage in Realpolitik locally to achieve national objectives. The US still hasn’t figured out what’s its interests are. France will help only to the extent their neo-colonial interests are served. America will be blind sided and probably will not see it coming.

George Gutowski writes from a caveat emptor perspective.  Follow him on Twitter @financialskepti

War with Syria-China Damages $VXX $VIX $DJX $SPX $FXI $EWH $OIL $GLD

War with Syria is almost a safe bet. Syria’s sponsor and pay master will not stand by idly and watch the Alawite’s lose control. They cannot go to other clients and ignore losses in Syria without putting up a fight.

While Iran will be nasty it will not ultimately destroy the US. Iran’s best bet will be a shadowy terrorist war trying to hurt America. But how to bring Iran to its knees. It takes money to be a terrorist. That means oil sales. Much Iranian crude goes to China. By boat through the Straits of Singapore.

The sudden disruption of oil supplies will disrupt the Chinese economy. Plants will shut or reduce. Public energy consumption will be curtailed. Brownouts and long line ups at the gas pumps. It will pay to be a member of the communist party just for the gas privileges.

Reduce China exposure or if you are brave enough short. In the meantime China will be throwing around its huge reserves of western currency especially the US Dollar buying up whatever oil it can get its hands on.

Watch for selective destruction of Iran’s oil infrastructure. Opportunistic. Much of the infrastructure is old and crumbling. Destroy enough to cripple the Mullahs and spark an overthrow. Then bring in Western Oil Technology and bring everything up to date. About a year for the round trip.

In the meantime China takes it on the nose so sorry. Globalism is a double-edged sword.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti