This weekend, while we here in the US were focused on the upcoming election and President Trump’s visit to Asia, a powerful drama with vast geopolitical implications played out in Saudi Arabia.
Mohammad bin Salman, the king’s son, is the de facto ruler of the country and has been making increasingly aggressive moves in an attempt to shift Saudi Arabia from its status as an ultraconservative oil-producing nation to a 21st-century manufacturing superpower with social mores to match. In doing so he has greatly perturbed a broad swath of the Saudi elite – many of them his near and distant royal family brethren – as well as the fundamentalist Wahhabi clergy.
This in a country where, as my good friend George Friedman remarks in today’s Outside the Box, “[The] royal family has more in common with the Corleones than with a Norman Rockwell painting.”
Meanwhile Iran, sensing an opening, is upping the pressure on Saudi Arabia. The missile aimed at Riyadh last week was fired by Houthi tribesmen in Yemen who are allied with Iran; and Iran has openly entered into an alliance with Qatar, effectively breaking the embargo against Qatar that the Saudis had tried to impose.
These developments leave the US position in the region in a very unstable, vulnerable state. I might add that if you’re looking for a trigger event to upset the rather perilously balanced global equity markets, the Middle East is always a good place to look, and more so now than in a long time.
Full article: Saudi Arabia’s Saturday Night Massacre (Mauldin Economics)