by Bill O’Grady
In Part I of this report, we identified the need to stabilize three areas of the world prone to war in order to maintain global peace. We focused on the Middle East and discussed the development of the Carter Doctrine, examining how the doctrine has been enforced since its inception. In this week’s report, we will discuss the reasons for the breakdown of the order prior to President Trump and follow this discussion with the impact of the current president. We will project the likely actions of the nations in the region and, as always, conclude with market ramifications.
The Breakdown of the Order
The key element of the Carter Doctrine was the explicit threat to use military force to prevent outside powers from gaining influence in the Middle East. The tacit element of it was that the U.S. would enforce stability in the region which included honoring existing borders regardless of the internal social problems that the colonial frontiers created. Since the turn of the century, U.S. actions have tended to undermine regional stability. It began as overreach, but it has evolved into neglect.