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Welcome to World War III

If there was ever a war that had to happen it is our new military engagement against Libya. Khadafy had made enemies with so many governments as the enfant terrible of the Middle East that putting together a coalition to depose him was a piece of cake. No arm twisting or fake intelligence about weapons of mass destructions needed here. Even Al Qaida hated Khadafi.

Call it “shock and awe” light. I love it. The leadership is Arab, the French provide close air support, Egyptians the ground troops, and the Italians the pasta and the Tuscan wine (praise the Lord and pass the Antinori?). We just sit back out of harm’s way and use up our inventory of outdated tomahawk missiles, while testing out the new models. Think of it as no more than a training exercise for the US. And we do all of this under the mantle of a UN approval. For us it really is a push button war. It is more like a video game that hand to hand combat.

You knew that things were going to play out differently this time when the Arab League voted to support the Libyan rebels and asked for UN assistance. For the past 60 years, this impotent international organization has done nothing but issue periodic rants against Israel and Zionism. This is the first time they have ever done anything useful.

Look at the line up in the coalition, and every national leader found it expedient from a domestic political point of view to take on Libya. The UK, France, Italy, Saudi Arabia, the UAE, Egypt, Jordan, and the US. Everyone needs a weak enemy they can defeat and claim credit for. Keep in mind that Libya’s only ally in this fight is Zimbabwe, and it is providing only moral support.

Even President Obama, whose strong words and decisive action will no doubt boost his chances in the 2012 election. All of a sudden, protecting the Libyan people has become a top national priority. Who knew? Did I hear the word “oil”? The word in Israeli intelligence is that the move was made not to save lives, but oil production facilities. After all, if you want to know what’s happening in Libya, you have to call Tel Aviv.

It is also important to note that yet another country has discovered that the weapons and the decades of training they paid the Russians hundreds of billions of dollars for are utterly useless. Targeting coordinates were programmed into cruise missiles while enemy bases were still under construction. The CIA has kept a satellite parked overhead for daily updates. All that was missing was the political will to pull the trigger. Khadafy’s supports can do little but fire their AK-47’s in the air in utter frustration.

If you gave the Joint Chiefs of Staff a map of the Middle East and asked them their favorite target, Libya would be at the top of the list, and Iraq and Afghanistan would be at the bottom. While Libya looks big on a map, it is really a thin strip of coast 20 miles deep and 1,000 miles long. Its military resources are concentrated if confined, easily targeted areas. Its army consists of only 10,000, many mercenaries earning $1,000 a day. Who said there weren’t well paid jobs around? The unemployed obviously aren’t trying hard enough.

I predict that they will dig Khadafy out of some wretched hole in a few months, put him on trial for war crimes and terrorism, and the world will say good riddance. Sorry, but that’s the Marine pilot in me coming out. That will leave the US with a pro-Western government in a major oil producing country whose massive offshore fields it was only just starting to develop.

The market reaction to our third Middle Eastern war in two decades was totally predictable. Traders hate uncertainty and love fact. This brings falling asset prices during the sabre rattling stage and soaring ones when the first shots are fired. If you don’t believe me look at the charts for stock market indices at the onset of the 1991 and 2002 Gulf wars.

It’s off to the races for oil again, as Libyan crude is now probably off the market for years to come. Macro Millionaire followers are thanking their lucky stars that, having sold oil at $107, they covered at $97. Here we are again at $106 for West Texas intermediate and $116 for Brent. It’s been that kind of year.

Semper Fi.