Russia, Syria and Markets

By www.ProfitableInvestingTips.com
Russia, Syria and Markets

http://profitableinvestingtips.com/profitable-investing-tips/russia-syria-and-markets
Russia is jumping into the civil war in
Syria with both feet.

We would like to look at what this
means to the region and what the
Russia-Syria connection means to
markets.

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First let us look at an update on
Russian involvement in the Syrian civil
war.

The New York Times reports that
Russia is supporting Syrian
troops with cruise missile attacks
launched from the Caspian Sea inside
the Russian Federation.

Russian warships in the Caspian Sea
fired cruise missiles as Syrian
government troops launched a ground
offensive Wednesday in central Syria,
in the first major combined air-and-
ground assault since Moscow began
its military campaign in the country
last week.

The missiles, launched from a
Russian flotilla in the Caspian Sea,
travelled 1,400 kilometers (900 miles)
over “unpopulated areas” to target
militants, according to a Russian
officer.

The latest developments – exactly a
week after Russia began launching
airstrikes in Syria – add a new layer to
the fray in the complex war that has
torn this Mideast country apart since
2011.

Moscow has mainly targeted central
and northwestern Syria, strategic
regions that are the gateway to
President Bashar Assad’s strongholds
in Damascus, and along the
Mediterranean coast.

But the strikes appear to have given
Assad new confidence to try to retake
some lost ground.

The Assad family has ruled Syria by
way of the Baath Party for decades.

When Syrian citizens in the city of
Homs peacefully demonstrated in
2011 the demonstrations were put
done forcefully and thereafter the
demonstrators took up arms and thus
began a 4 year long civil war.

More than 4 million people have fled
the country and a quarter million
people have died.

The Assad government only controls
about a tenth of Syrian territory but
most of the population.

Kurdish forces have staked out
territory in the north and east of the
country and a terrorist state, the
Islamic Republic of Iraq and Syria has
sprung up and controls most of
northern and eastern Syria as well as
large parts of Iraq.

Russia has always backed the Assad
dynasty and Russian president Putin
contends that the Assad government
is the only thing left before total chaos
in the region.

Thus Russian bombers and missiles
are used in supporting a new ground
offensive in Syria with the goal of
saving the Assad regime. What does
all this have to do with markets?

A Powder Keg on Top of a
Pool of Oil

The risk to governments in the Middle
East is not the Assad regime but
various terrorist organizations with the
Islamic State as the foremost.

Half of the recoverable crude oil in the
world is in the Middle East.

If unstable governments fall and
chaos reigns, oil supplies will fall,
prices will rise and economies will
suffer.

On the other hand countries like
Venezuela, Colombia, Mexico, Brazil,
Nigeria and Angola will prosper
because they will not be subject to
social and political chaos and they
have oil to sell.

In addition, as developing economies
based on oil fall into chaos those who
do business with them suffer as well.

Germany Feels the Effects
of Reduced Developing
Market Demand

Bloomberg Business reports
that German industrial output fell by
1.2% last month.

German industrial production
unexpectedly declined in August,
signaling that Europe’s largest
economy is vulnerable to risks
including weaker growth in emerging
markets.

This is happening simply due to
slower global growth, especially in
China.

If the Middle East truly descends into
chaos the effects on industrial
production and services will be felt
globally with stock and commodity
markets affects across the globe.

Hoping Russia and Syria Win

An accurate consensus is that the
Assad regime is a brutal dictatorship.

The USA and EU as well as
neighboring Turkey and other regional
powers want him to be gone.

The problem is that there is not viable
alternative.

Russia is engaging in realpolitik, the
German word for a realistic and
practical approach to solving
regardless of moral concerns.

Newsweek writes about how Putin
wins in Syria.

At a moment when the United States
appears to be washing its hands of
the increasingly bloody and chaotic
region

It gives Russia an expanding military
presence in the Mediterranean on the
doorstep of a NATO ally (its newly
established airfield at Latakia in
eastern Syria sits just 75 miles from
the border with Turkey)

And the gambit may yet serve as
leverage with the West as Putin seeks
to get out from under economic
sanctions imposed as a result of
Moscow’s annexation of Crimea in
Ukraine.

The only hope for the Assad regime is
that a combination of Russia, Iran and
Hezbollah will help reestablish control.

This will probably calm the markets for
the time being despite being a morally
repugnant solution.

Russia, Syria and Markets

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