The one investment that might be hit hard by the war in Syria

Anti-war protests © Getty images
Assad is a bad man, but war is not the answer

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Over the weekend, the US, Britain and France joined forces to bomb Syria.

The air strikes were in response to the latest chemical weapons attack by Syrian president Bashar al-Assad.

It’s the kind of event that generates an awful lot of noise in the news.

But what, if anything, does it all mean for markets?

A bluffer’s guide to the Syrian civil war

It can be useful to cut through the noise when events like this happen. It’s very easy to go down one rabbit hole or another, particularly when everyone is out there pontificating, hoping to use the situation to advance their own political views.

There’s a whole bunch of people only too willing to promote the whole “false flag” nonsense – either because they’re credulous, or they’re genuine fifth columnists. Other people just want to promote their own political agendas.

Corbynistas want to use it to attack the government. Neocons want to push the idea of further intervention. Some people are angry that we’ve stepped in at all. Other people are angry that we’ve not done more.

Let’s take a quick step back from it all. The situation in Syria itself is complicated. That’s the Middle East for you. But if you avoid all the conspiracy theory nonsense, then the basic story is pretty simple.

Assad is a bad person. He is a dictator who wants to remain in charge. As a result he has declared war on his own people, because if you’re a dictator, then your own people are the enemies you have to worry about. One way to stay in charge is to terrorise them.

You demonstrate utter ruthlessness and make them too afraid and disorientated to resist you. Stalin arguably provided the textbook, and lots of other dictators – including Saddam Hussein – have followed this model. Hence the chemical weapons.

Russia, meanwhile, has thrown its lot in with Assad. Syria contains the Russian navy’s only overseas base: Tartus. You can argue over whether that’s a good enough reason, but given Russian insecurity over its place in the world and its desire to “project influence”, I think it’s perfectly plausible that Russia sees Syria as a useful toehold in the Mediterranean and is willing to act reasonably aggressively to maintain that. The threat of rival gas pipelines to Europe is another good reason to stir up trouble in the region.  

Iran and Israel’s spheres of influence are in the mix too (both of them basically regard Syria as a buffer zone of sorts). And various other groups – including Isis – have taken advantage of the chaos to cause more chaos and advance their own interests.

But overall, that’s the story. An evil man is gassing his own people to cement his position, and Russia is helping him out because it’s in their geopolitical interest to do so.

The question, of course, is: what can we do about it? And that’s where it gets really tricky.

Acting with good intentions does not excuse bad consequences

The world is full of bad people in power. In many parts of the world, it is not hard to make a purely moral case for intervention. In fact, once you start looking, it’s hard to know where you’d stop. The problem is, how do you intervene in such a way as to make things better, rather than worse?

Saddam Hussein was a bad man, no doubt about it. He deserved what he got in the end, and more. But it’s hard to argue that the invasion of Iraq was a success.

Tony Blair and George W Bush both acted out of a sense of moral righteousness (in other words, they were both on massive ego trips). Militarised virtue signalling was no substitute for a reality-based plan, unfortunately, which is how we ended up with the disaster that was Iraq.

That war cost the West its moral authority, which was a major victory for the bad guys. Then the 2008 financial crisis battered the West’s reputation for competence and good governance. No wonder we’re in a state of such political upheaval now.  

So I hate to say it, but people campaigning for “boots on the ground” or whatever the euphemism is now, either have an inflated understanding of what our military can achieve, or simply want to be seen to “do something” to offset the understandable feelings of anger, guilt and helplessness engendered by seeing a monster bomb hospitals with virtual impunity.

On the other hand, those arguing that the West are warmongers are full of it, too. Syria used chemical weapons. For want of a better word, as a “community” of civilised nations, we’ve decided that those are beyond the pale. If you just let it go – like we did last time – then we’re basically giving the go-ahead to anyone else who wants to push the boundaries to try their luck.

And beyond that – perhaps more importantly – the West can’t allow Russia to continue doing whatever it likes while hiding behind various manufactured stories and sputtering indignant denials.

So overall, I guess you can see these missile strikes as a justifiable warning shot across the bow. But I very much doubt that there’s sufficient political support for any more aggressive action than this, and I’d be surprised if Assad isn’t still in charge for some time to come – assuming he avoids using more chemical weapons.

What does any of this mean for your investments?

All of that said, how relevant is this to your investment plans? The honest truth is that for most people, the answer is – not very.

Whether or not you agree with my simplistic analysis of the situation (and I don’t claim to be an expert), it doesn’t matter. You can think that this is all an attempt by the West to frame Russia for something it hasn’t done, or whatever. Even if you think that, it makes no odds for where you put your money.

The war in Syria is a horrendous waste of human life. It’s tragic. It’s a source of potential political instability. But on a day-to-day basis, the impact on how you should manage your portfolio is minimal to non-existent.  

There’s one minor exception. If you are invested in Russia, then you are likely to see your investments fall in value still further, and it might be a while before the turn comes.

The US is said to be imposing more sanctions on Russia. The ones already in place threaten to lock various companies out of the market, and increasingly, there’s a danger that Russia will eventually seem un-investable for most developed-world investors because of the potential consequences from the US authorities. So if you do invest in Russia, you need to think about liquidity, and you need to think about how much you need that money.

Meanwhile, if you’re looking for insurance against escalation or any more unexpected events, then you should own some gold. Although if you’ve been reading Money Morning for any length of time, you probably own some gold anyway.

Other than that, it should be business as usual for your portfolio. And just thank your lucky stars that you live here, and not there.

  • quark

    Strangely enough, the gold price is lower than before the Syrian air strikes. It only moved marginally on the day of the strikes,well within the recent price range. Crypto currencies however rose in price.

    • befair openyoureyesandmind

      because it was a show. T. informed Putin and Assad was T. strike against the Neocons. Read BB news each single reader understands that.

  • Tom Bayley

    I think it’s even more complicated than you make out. Very few seem to have any kind of nuanced view – it’s either the evil dictator trope or else it’s a massive western conspiracy i.e. a classic polarisation of ignorance. The New York Times had an eye-opening piece which I think is rare for us to see in the traditional western media. It’s from a journalist with some experience in the region:

  • Damian

    If OPCW confirm that the gas used was chlorine then it could easily have been a false flag. I know our media talk about ‘chemical weapons’ but that is a deliberately highly misleading term – albeit a subtle one. What they want us to think when they say ‘chemical weapons’ is ‘chemical warfare agents’. But chlorine is an industrial chemical, not a CWA. Technically, by the same standards the recent acid attacks in London are an example of ‘chemical weapons’ being used on our streets. The moment they say that Asad used ‘industrial chemicals’ on his own people it leads to the obvious conclusion that industrial chemicals are easy to get, and most groups in Syria can get hold of them. Well Russia stated 3 weeks ago that there would be a chlorine gas false flag during the battle. So either Putin was in on it along with Asad, or the opposition did it as a way of involving western intervention. I’m an ex-Army Officer and even I’m amazed at how we decided to risk so much based on a video, and did it prior to a scientific investigation. Normally in the UK we go from: Crime – investigation – trial/due process – penalty. Here we seem to have gone from: Crime straight to Penalty. This will cost us.

    • Dr Walter Schwager

      So what about the UK accusing Russia in the recent nerve gas attack on British soil?

      • Damian
        • Tom Bayley

          Good article. But they surprisingly overlooked a paper published by an Iranian Lab, which contains some details on ingredients and synthesis of Novichoks, as well as analysis of them and their fragmentation products. Their stated aim was to provide a much needed reference to allow the world to recognize these compounds.

          By the way, I don’t see a fume enclosure as exactly specialist equipment. And I don’t see why any actor with moderate resources (state or non-state), in pursuit of highly valuable propaganda, would find themselves limited to a backyard or a shed.

          On whether this stuff has been made at Porton Down, I’m not sure of the procedures but it seems likely control samples would be produced if possible for blind-testing alongside the actual samples. Assuming the independent labs are told nothing about the samples, this would act as an integrity check on their analyses. Some of the controls might contain Novichok (which would have to come from stock or be freshly manufactured), or another compound, or a mixture. Which would explain the news involving the Spiez lab, with one sample apparently containing unfeasibly pure Novichok alongside a trace of BZ.

    • befair openyoureyesandmind

      Assad won the war. He never used chemical weapons..NO NEED HE WON!! they THE US UK EMPIRE and F. Macron the Rothschild made man, bombed now before the check, to destroy all evidence. The video was SYRIA Hollywood movie like the ones in the past White Helmet is Al Nussra PR fakes. The UK poising was done by CIA and UK CIA before Putin won the elections…each RU knows that. too foolish really.

  • Gary

    Firstly, the war in Syria like Libya was and is about money. Ghadaffi was killed to stop the launch of his new African Dinar backed with gold and oil. Syria ( is about oil and gas pipelines into Europe. Qatar wants a pipeline through Turkey and Syria and Iran wants its pipeline through Iraq and Syria. Syria has suffered decades of US sanctions and coupled with a regional draught people started complaining. Well-funded Wahhabi Islamic rebels appear on the scene killing police, government officials, Alawites etc with the weapons they got from Libya, UK France and the US and when the Syrian army reacts we in the US, France and the UK debate bombing the Syrian army. Syria is a secular country, and if you ask any genuine Syrians, not the ones the BBC seems to find, about the war, they will say they don’t have a choice, they don’t like Assad but even more they don’t want to be ruled by rebels of the Muslim Brotherhood funded by Saudi Arabia. I am waiting for the scandal surrounding the UK foreign aid budget. We know some goes to fund the White helmets which provides first aid to rebel forces but I am quite sure more is getting into the hands of rebel forces directly via military consultants like the white helmets.

    • Damian

      So am I. I met Vanessa Beeley last year who has spent two years researching the white helmets. They get about $135m per year in funding. I price and run similar projects around Africa and the middle east (landmine clearance), and did a quick calculation of what I think their running costs should be, based on the number of staff they have. I’d say $30-$35m per year. So there is about $100m/year going somewhere.

    • befair openyoureyesandmind

      100m Mio USD the white Helmets get. paid by UK USA propaganda.

      any kid knows this since 2013!! unless you only watch British Bullshixx Corp. BBC

  • Timothy Stroud

    There will be a power struggle before long in the Kremlin. The Russians have
    gone too far in antagonising the West, and now they face diplomatic isolation,
    a falling rouble, and heavyweight US sanctions. It is no good Putin and Lavrov
    carrying on with their usual sarcasm and lies. The Russians have kept the
    monster Assad in power, but they will have a heavy price to pay.

  • befair openyoureyesandmind

    Jesus Christ!!! did a 3 year old write this article???
    anyone with a tiny bit of political knowledge understands the real reasons behind the proxy war in Syria. and this since at least 5 yrs

    and before he even writes such an article did this guy ever visit Syria before the war? or talk to real Syrians, Christians?
    this article reads like a BBC MSM BS. Unbelievable. Even 50.000 Breitbart news readers check the comments 50T, when T. bombed Syria, understood the Assad, Putin stance. The Golan oil digged by Murdoch, Chenney etc.. I am startled that such a piece was even published here. Insane. AND DO NOT ERASE MY COMMENTS. You always do when I post fact to counter your ideology. We are not here in Orwellian 1984 aren’t we, you censor and always erase my post. MW stick to the stuff you published and accept a counter facts.

  • befair openyoureyesandmind

    even Roger Waters sees clear facts. NOW

    and years ago we all knew…just MW believes the white flour is some chemical