Collapse Day Approaches

Saudi Arabia is joining the litany of Middle Eastern countries with growing dissent.
As suggested on this blog back in February, the contagion is spreading and could affect the largest oil exporter (over 7 million barrels per day), Saudi Arabia.

If this country has a disruption in oil exports, the economic consequences could be devastating. I briefly touched on this topic in a recent post How Far Will The Virus Spread. A "day of rage" is scheduled for Friday March 11 in one of its northern, predominantly Shia provinces.
As tensions grow, we may see Saudi Arabia blaming Iran as an agitator. This could also see the potential for conflict between the two Middle Eastern heavy weights increase dramatically.
We remind readers that the current regime in predominantly Sunni Islam Saudi Arabia is a western ally. The predominantly Shia Islam state of Iran, is much more confrontational and antagonistic.
We are also aware that the pursuit of enriched uranium for "peaceful purposes" is well known to be a concern to neighboring Saudi Arabia. Further, we have two highly strategic straits that could come into play in a conflict: The gate of Tears (Bab el-Mandeb), and the Strait of Hormuz. Through the Strait of Hormuz passes 40 percent of all traded crude oil. Though the Gate of Tears, passes much of the crude oil destined for Europe.
Let us hope that calm will gradually return to the Middle East with enough change to satisfy the protestors.
If we do not see a cooling of tensions soon, it is possible that these protests could evolve into a regional conflict between Sunnis and Shias causing a super spike in crude prices.

High oil prices, as history from 2008 reminds us, can be very hard on the economy, and on equity prices.

My March 18, 2011 Collapse Day forecast and encouragement for readers to take precautions previously described remains unchanged.

Note that March 18 is a Friday, and many major protests in the Middle East occur on Fridays.

A recent quote from Richard Russell seems appropriate here:

“I've begged and implored my subscribers for a decade to enter the great bull market in gold. Even today, after a solid decade of higher prices, the great majority of Americans own not a single ounce of gold. And even today, after an amazing ten consecutive years of higher prices, we hear know-nothings denouncing real money, gold, as a barbaric and worthless relic of former times."