Israel vs. Hamas: Who Won?

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By Marin Katusa, Chief Energy Investment Strategist

Hamas, meaning “enthusiasm” in Arabic, was originally founded in 1987 and is based on the principles of Islamic fundamentalism. Its goal is to create an Islamist state including the West Bank and Gaza Strip, as well as the entirety of Israel. Hamas even states in its founding charter that Israel “will remain erect until Islam eliminates it as it had eliminated its predecessors.” To achieve its goals, the group has used tactics such as rocket attacks, assassinations, and suicide bombings, prompting the US and the European Union to classify them as a terrorist organization.

Despite this, Hamas was able to win a victory in the 2006 Palestinian elections, putting it in power and acting as a constant thorn in the side of Israel. To say that Israel and Hamas are not on the best of terms would be the understatement of the century. Border clashes and sporadic exchanges between Israeli forces and Hamas are frequent.

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Sometimes, these skirmishes break out into the open warfare, as we saw in the past few weeks. Hamas has been able to launch rockets at targets as far away as Jerusalem and Tel Aviv, while Israel has reacted with military strikes on Hamas’ rocket-launching pads, leaders, and government buildings.

After a few days of intense activity from both sides, they came to a ceasefire on November 21. Both sides claimed victory, as Israel believed it destroyed most of Hamas’ rocket-launching platforms, while Hamas claimed that it has gained popular support and international legitimacy.

Unfortunately, though history does not always repeat itself, it sure does rhyme. It is quite clear that this ceasefire won’t hold for long, and we will be talking about another Israel-Hamas conflict before long.

However, a winner did emerge from this round of fighting between Israel and Hamas: the Egyptian president, Mohamed Morsi.

Morsi was elected in June of 2012 after defeating Ahmed Shafik in the first democratic election in Egypt (the 2005 election was more of a sham than a true election). A member of the Islamist Freedom and Justice Party, Morsi has the task of drafting up the post-Mubarak constitution as well as demonstrating to the world the success of the Arab Spring.

During the latest Gaza conflicts, he played the role of the mediator, brokering the November 21 ceasefire between Israel and Hamas. In addition, he also opened up the borders with Gaza in order to allow trade of food, goods, and humanitarian aid. In contrast to what his predecessors would have done, he sent his Prime Minister Hesham Kandil to Gaza City.

Morsi has shown himself to be capable on the world stage, as he carefully weighed the concerns of both Israel and Hamas, showing support for the people of Gaza while not angering Israel. His balancing act and “personal leadership” has prompted the lavish praise of Hillary Clinton. Not bad for a guy who is only a few months into his job.

But the balancing act is just that – an act. Armed with praise from Americans, Middle Eastern leaders, and even Israeli Prime Minister Benjamin Netanyahu, he is beginning to push forward his agenda.

On November 22, 2012, Mohamed Morsi sacked his chief prosecutor, and decreed immunity for the panel drafting the new constitution as well as the upper chamber of parliament. Both groups are heavily influenced by Morsi’s Islamist allies.

He also decreed that all of the decisions he has made since taking office in June are not subject to appeal in court or by any other authority. He now essentially has a monopoly on the legislative, executive, and the judicial branches of government.

In layman’s terms, he has essentially shown democracy the middle finger and established himself as the next dictator of Egypt.

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Is the world ready for a Muslim Mubarak?

Egypt under Mubarak was relatively passive in Middle Eastern politics, as Mubarak was more focused on keeping himself in power.

Morsi has already demonstrated himself to be different, wishing to once again reassert Egypt as a dominant player in Middle Eastern politics. Unlike Mubarak, Morsi has the potential and the Islamist background to be able to pull this off. Also unlike Mubarak, Morsi has the backing of the Muslim Brotherhood, one of the most influential Islamic movements in the Arab world.

Once he has a good amount of the support amongst the Muslims, Morsi could begin pushing for the establishment of Islamic regimes in the Middle East under the guise of “democracy and free elections”. How ironic it would be if the Arab Spring became the Islamist Winter less than two years later.

Consider the possibilities: Yemen, Oman, Jordan…

And the most important of them all: Saudi Arabia.

As we have mentioned previously, Saudi Arabia has all the right components for an Islamic revolution, and Morsi could prove to be the fuse for the powder keg that sends oil prices toward $200.

For those who are invested in the right companies, this could be the chance of a lifetime to score some fantastic returns in the energy sector.

And while no one can predict when prices will reach these levels, we can say with certainty that the biggest gains will come to those who position their portfolios now.

So why not get paid while you wait?

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Additional Links and Reads

High Demand Means World Needs All of Canada’s Oil (Financial Post)

Despite all the talk about how the United States could be the world’s largest producer of oil on the back of unconventional, light-oil resources, demand is increasing at such a pace that all of Canada’s oil will be needed in the future. Many don’t realize just how important Canada’s oil is to the United States, nor that Canada’s oil sands may very well be one of the most important energy resources in the world.

Olympics Under Threat: 200,000 Protest Oil-Wealth Distribution Bill in Rio (RT)

Oil royalties are a big deal to many state and national governments, as it is an important source of income for other projects. A new bill that was given the go-ahead by the Brazilian congress on November 7 would lower the royalties collected by the producing states from 26% to 20%, redistributing the difference among Brazil’s other states. This sparked large protests in the oil-producing regions, which includes Rio de Janeiro, home of the 2016 Summer Olympic Games.

Saudi Arabia Warns that Domestic Oil Use Is Growing at “Frightening Level” (Platts)

Saudi Arabia has one of the highest per-capita consumption rates of crude oil in the world, as its abundance of oil has given citizens a sense of entitlement to cheap oil. However, as the population continues to grow and production becomes stagnant, Saudi Arabia is experiencing the “big pinch” between dwindling supplies and increased demand. We expect this phenomenon to occur not just in Saudi Arabia, but eventually spread to other oil-producing countries such as Venezuela and Nigeria.

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avatarDoug Casey - Casey's Daily Dispatch posted Tuesday, November 27th, 2012.

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