Through the fog, some clarity...
LAST weekend, the US, Britain and France joined forces to bomb Syria, writes John Stepek at MoneyWeek magazine.
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?
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.
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? The honest truth is that for most people, the answer is – not very much.
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.