Thursday 30 March 2017

Conflict between God and Mammon would unleash mother of all crises

An Iraqi man holds a portrait of prominent Shiite Muslim cleric Nimr al-Nimr during a demonstration against his execution by Saudi authorities. AFP PHOTO / AHMAD AL-RUBAYEAHMAD AL-RUBAYE/AFP/Getty Images
An Iraqi man holds a portrait of prominent Shiite Muslim cleric Nimr al-Nimr during a demonstration against his execution by Saudi authorities. AFP PHOTO / AHMAD AL-RUBAYEAHMAD AL-RUBAYE/AFP/Getty Images
David McWilliams

David McWilliams

In this first article of the new year, I'd like to discuss the reasons why the global financial markets began the year in turmoil. The Chinese market fell 7pc on Monday, as did several major stock markets, while the dollar rose against a prevailing backdrop of chaos and uncertainty.

What happened over the weekend to send the moneymen into such a panic? There are specific reasons in China which I won't discuss here, but why the panic elsewhere?

The key to all this is the Middle East. On Monday morning, the moneymen realised that the status quo in the Middle East is not only changing but could be shattering before their very eyes. On Sunday night, Saudi Arabia cut off diplomatic ties with its sworn enemy Iran. This was in reaction to the sacking of the Saudi embassy in Tehran, itself a reaction to the Saudi's execution of 47 prisoners, including senior Shia Muslim cleric Nimr al-Nimr.

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