They’re gearing up for another trillion-dollar payday in Washington. And the establishment is gunning for profits. I’m talking about the real moneymen who run DC – the politicians, the lobbyists and the defense contractors.
The next target: Syria. But it may not stop there. As Congress debates whether or not to strike, and it looks like the consensus is to strike, companies like Raytheon (RTN) which makes the Tomahawk Cruise Missile are licking their chops. It’s not the money they’ll make from a few missiles that will strike Syrian airfields or radar installations – no, that’s the small potatoes…
What the defense establishment (also referred to as the military-industrial complex) is really shooting for is a massive conflict in the Middle East that drags all the interested and vested parties into the fray.
Before I present you with the opportunity this gives you, a little background that backs up the case…
Syria is the lynchpin in the war between Sunni and Shia Muslims. The minority Shia faction controls Syria and is backed by Iran. The Sunni are backed by Saudi Arabia and Qatar. The Saudi’s aren’t hurting for cash and neither are the Israelis who will be caught in the middle. Syria is controlled by the Alawite Muslims who make up barely 10% of the population. They are supported by the Christians (another 10%) and the Druze and a couple of other minorities. That totals around 30% of the population. They hate each other, but not as much as they hate the Sunnis who are around 70% of the population but hold no power. The Sunnis are the ones who make up the rebel forces and they are being funded and driven by Saudi Arabia and elements of Al Qaeda. If they take over there’ll be a regional bloodbath which is why the US is not trying to get Assad, Syria’s President, out of power. Assad and his regime are being protected by Iran and Hezbollah, based out of neighboring Lebanon. All the parties have something at stake here – and they are willing to fight to the death if need be. The Russians are on Assad’s side as well, supplying technical support and arms. The web gets more and more tangled the deeper you dig.
The money shot is if Iran is dragged in. How big?
Well, the war in Iraq cost some six trillion dollars and counting. This one may not be as big – but we’re talking hundreds of billions if not a trillion when all is said and done. It would be even more, but the US is close to bankruptcy as it is, so counting billions of pennies is important. The Defense Complex needs a cash cow and they certainly don’t want to kill it…just bleed it slowly to death.
Lockheed Martin (LMT) and Boeing (BA) will be huge beneficiaries if this becomes an all out air assault and while that remains to be seen, there’s plenty of future business to go around as countries like Saudi Arabia may need to beef up it’s defenses in the event Iran begins to threaten nuclear retaliation. Adam Woods made a great commentary on LMT earlier this week on The Midas Legacy.
The situation in Syria may seem like a minor operation to begin with…at least that is how the administration is portraying it. But once the Pandora’s Box is opened what comes out will most definitely be unpredictable and costly just like every other war in the past.
The Insiders in Washington are already positioning themselves – you can bet on it. Congressmen may not make a lot of money serving the country, but they certainly know how to rake in the cash with the inside scoop well before the general public gets a whiff of anything. If you think the response to Syria is just being considered, you’re wrong. It’s been on the table for months – it was just a question of when and how strong the response would be.
Next time we’ll look at the oil and energy complex – there’s been some interesting trading going on.
To your wealth,
Banker X.
