Why the US is Really Chasing War With Syria

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Apparently, global markets rallied overnight on hopes that a conflict may be avoided if Syria gives up its chemical weapons. If that’s the case, it’s a rally that will fade later in the week.

That’s because, as we pointed out yesterday, the ongoing Syrian conflict has nothing to do with chemical weapons. It’s all about regime change, which is all about natural gas and pipelines.

But this is not just ‘another’ Middle Eastern conflict. It’s much deeper, subtler, and potentially far more dangerous than preceding conflicts. As we’ll attempt to explain in today’s Daily Reckoning, the situation in Syria is a direct result of the relative decline of US imperial power.

There’s little doubt that the US want to see regime change in Syria. So it was a bit of a masterstroke that yesterday the Russians tried to diffuse the conflict by calling the US’ bluff and playing the chemical weapons card. As reported by the Financial Times:

‘Russia launched an unexpected diplomatic initiative to defuse the Syrian crisis on Monday when it called on the Assad regime to place its chemical weapons stockpile under international supervision, suggesting the move could head off a US military strike.

‘In a move that took western diplomats by surprise, Sergei Lavrov, Russia’s foreign minister, announced that Moscow has proposed to the Assad regime that it should “not only put its chemical weapons storages under international control, but also have them destroyed subsequently”.’

Russia doesn’t want regime change, so it doesn’t want war. And if Russia plays for peace, then it makes it that much harder for the West to justify its belligerent actions.

But just this morning the US hit back, calling Russia’s bluff that called the US’s bluff. That is, President Obama said that he’d call off any attack if Syria relinquished control of its chemical weapons. Or in Obama’s words, ‘If in fact that happens.’

This is getting almost laughable. So all Syria has to do to avoid a carpet bombing is relinquish control of its chemical weapons. And all the US has to do to effect regime change is to say that Syria won’t give up all its weapons (it’s still hiding some, and we’ve got ‘proof’).

So let’s see how this diplomatic dance plays out. But in the meantime, all you have to do is understand that Russia wants peace because it doesn’t want its energy interests threatened and the US wants Assad out because it (and Saudi Arabia) wants to keep its foot on the throat of Iran.

Here’s the basic rundown:
On 25 July, Iraq, Iran and Syria signed a memorandum of understanding to build a pipeline running from the largest natural gas reservoir in the world (controlled by Iran and Qatar) through Iraq into Syria and Lebanon. The plan is to eventually extend the pipeline to Europe. The Wall Street Journal reported at the time:

‘The oil ministers of Iraq, Iran and Syria Monday signed a preliminary agreement for a $10 billion natural-gas-pipeline deal, the official Iranian News Agency IRNA and other Iranian media reported.
‘The document was inked in the Assalouyeh industrial region located in the southern province of Bushehr by Iranian oil minister Mohammad Aliabadi, Iraq’s oil minister Abdul Kareem Luaiby, and Syrian counterpart Sufian Alow, the agency said.’

Although bringing Middle Eastern gas into Europe is not in Russia’s best interests, the next best thing for Russia would be to have its hands all over the distribution of the gas. We’d guess that Gazprom, Russia’s state energy giant, would have a fair economic interest in any pipeline built through the region.

But monetising Iran’s gas reserves and having euros flow in the billions to Iran doesn’t sit well with Saudi Arabia or the US. Neither wants a strengthening Persian force to reckon with in the future. Nor are they happy with Russia retaining dominance over the flow of gas into Europe.

In addition to the US and Saudi Arabia having their noses out of joint, Turkey isn’t impressed with the pipeline proposal either. It wants to play the role as the transit nation for Middle Eastern gas to flow to Europe and thus cement its strategic importance in the region.

And as we mentioned yesterday, China is on the Russian side. It wants stability in the region (to ensure its own energy supplies) and sees Assad as a much more stable force than the unknown alternative. Right now, the anti-Assad forces are a hodge-podge of extremists/terrorists/medieval psychos with perhaps a few genuine freedom fighters thrown in.

Any new ruling force to assemble from such a group would make Assad look like the Dalai Lama. So bringing down the regime without sending in ground troops would ensure carnage for the poor Syrian people, who are innocently caught up in this global geopolitical chess game.

Not that ground troops would really achieve anything. The massive US military presence in Iraq seems to have bought the US little influence. If we’re interpreting events correctly (and really, who knows when it comes to the Middle East) then it seems strange that the US couldn’t prevent the Iraqis from agreeing to the pipeline before it even got to Syria. Although the pipeline is apparently running through the Shiite (and thus Iran friendly) part of Iraq, it just goes to show the lack of overall US influence there.

So much for 10 years of occupation and hundreds of billions of dollars spent. At least the oil boys and contractors got a few concessions out of it.

So where does this leave us?

Well, no war and no regime change would signal that the long held Saudi/US balance of power in the region is waning. It would also reflect a relative step up in power for Russia and Iran.

The other question you have to ask is why is the US so keen to risk another deeply unpopular war in the region? The answer is, that’s what ‘top dogs’ do. When you’re the global superpower, you don’t let anyone threaten that position.

And this is where economics, the stock market and your wealth comes into it.

The US as global superpower is made possible by the US dollar being the world’s reserve currency. And supporting the dollars’ role as world’s reserve currency is the fact that global energy transactions take place through the dollar. Energy is what gives the US dollar, and the US, its power.

Russia and Iran have no real intention of maintaining the status quo. Longer term, neither does China. Saudi Arabia long ago decided to support the dollar by selling its oil for depreciating greenbacks, which is why the two are such strong allies.

So what you’re seeing in Syria is not another regional conflict. It’s a fight by the US to maintain its top dog status. But when dogs get in trouble they’ll do anything to survive. They’ll even gnaw off their leg if they get it trapped.

So our guess is that the US will continue to pick a fight and go for regime change. It will end up as a three legged dog as a result, but fight it will. If it doesn’t, perhaps it’s already lame.

Regards,

Greg Canavan+
for The Daily Reckoning Australia

Greg Canavan
Greg Canavan is the Managing Editor of The Daily Reckoning and is the foremost authority for retail investors on value investing in Australia. He is a former head of Australasian Research for an Australian asset-management group and has been a regular guest on CNBC, Sky Business’s The Perrett Report and Lateline Business. Greg is also the editor of Crisis & Opportunity, an investment publication designed to help investors profit from companies and stocks that are undervalued on the market. To follow Greg's financial world view more closely you can subscribe to The Daily Reckoning for free here. If you’re already a Daily Reckoning subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Daily Reckoning emails. For more on Greg go here.
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11 Comments on "Why the US is Really Chasing War With Syria"

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Ross
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Obaumma’s consciousness might only light up to a one book condensed into a powerpoint sort of idea. The perfect book for him was Richard H.Shultz’s The Secret War Against Hanoi published in 1999. Shultz has engineered the primacy of the powerpoint version by writing the most excruciating book ever written. Its an advocacy work. It lionises the Kennedy vision for Special Operations Group (SOG) led warfare. You can’t read this thing without reading this book on the Secret War in Laos. The reason for this is that Shultz would have you believe that what happened in that compartment never happened… Read more »
Guy
Guest

Pretty gutsy stuff for an open publication such as the DR. Best to keep such insights only for subscribers who care about you. Would hate to hear that the US were asking for you … Julian could tell you what to expect from the lap dogs in the ACT.

Ross
Guest

Forgot to mention, want to know why state has adopted a genre of diplomat in the mould of Ford and Stevens?

There ain’t going to be no obstacles in them there integrated operations.

Lachlan
Guest

a new weapon…a weapon of mass distraction. No seriously. I just searched youtube for syria and miley circus was on there. Call me cynical then.

slewie the pi-rat
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prez0 seemed to have forgotten about the regime change for a few daze. Billary’s Sunni agenda regarding same has now been officially renewed. Kerry seemed to have inadvertently popped off w/ an “unauthorized diplomatic solution” and, while he was covering his fanny that the suggestion was “rhetorical”, the “other side” ACCEPTED! L0L!!! can’t have THAT! i started with the Chantays & “Pipeline” and am now toonin’ in w/the Stones’ “Jumpin Jack Flash” [it’s a gas, Gas, GAS!]. however, i feel that the overall gestalt calls for the R.A.M.O.N.E.S., doncha think? their “Commando” is appropriately inappropriate: First rule is: The laws… Read more »
Hoss
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The US has learned a lesson, no more direct wars – proxy wars are the go. It has been fighting these ever since WWII with the Korean war being the only one which gave any kind of benefit.

You either go in balls and all or you don’t. No in-between wishy-washy rubbish. The west can no longer do the former so we should also avoid the latter.

Dictators of the world rejoice, you can now slaughter in relative peace and comfort, just no chemical weapons m’kay?

Ross
Guest

@Slewie, that’s a certain salafi brand of Sunni agenda. Those we would like to engage with down here, including the Sunni Indonesians were diplomatically opposed to the US led conspiracy against Syria.

And what, immediately after the above did that mummy’s boy cum Hollywood scout do to express the empire’s displeasure?

http://www.smh.com.au/lifestyle/celebrity/harrison-ford-upsets-indonesian-minister-with-rude-interview-20130911-2tiwc.html

They send the big guns these out days, no more Robert Kennedy types on grovelling diplomatic missions, as they did when they begged for Allen Lawrence Pope’s release. The masters of the universe are on the case.

Ross
Guest
@Hoss, dictators have been so good for the US… why would the regular forces want to go after them? Even Gaddafi allowed the CIA to milk his LIFG’ers and ship them over to Iraq for Betrayus’ enterprise. That didn’t do much for the security of the average US army sapper on the ground there. Poor old Gaddafi, still crying out how the US didn’t know their friends from their enemies as they started shooting him up. And your point about the switch from covert to regulars? Is there a point of difference? When the regulars did it General Smedley Butler… Read more »
slewie the pi-rat
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prez0 has spoken: ~it is a Civil War [not about religion per se (officially for US)]. he gave the statistics which are: 100K+ dead, millions have fled the country. he left out a BUNCH of IDPs [‘displaced persons’]still IN the country. ~”time out” for the UN SC P5 [and others] to operate. ~regime change seems no longer required, at least publicly, while this “diplomacy” progresses. so, he made a “military attack case” against Assad for using sarin gas and then exhaled, backing off. and, he also re-affirmed that, under current US law, he does NOT need to go to Congress… Read more »
Lachlan
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Hey fellas. Putin is saving the world.
http://www.zerohedge.com/news/2013-09-11/vladimir-putin-addresses-america-nyt-op-ed-calls-caution-syria?page=3

His words ring true. But, but.. ya know? I won’t put him on a pedestal. Putin plus UN look like Jesus now.

Lachlan
Guest
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