Hope all is well and that you had a great weekend .....

Without being too imposing and just some food for thought during these challenging times we're all witnessing today: Have you ever wondered where we're heading and how will all of this affect us?

The international community is waking up to the shock of the "yellow topple" Hezbollah power grab which threatens to change the fundamentals in Lebanon as well as the Levant, and more broadly across the Middle East.

The situation in Lebanon is extremely tense after the Shiite movement -- Hezbollah -- seized control of west Beirut in what the ruling Western-backed coalition government brands as an armed coup orchestrated with the help of Iran and Syria.

As Lebanon stands at the brink of civil war, the United States and the European Union are urgently consulting Lebanon's neighbours and the United Nations Security Council to determine if there are any possible measures that can be taken to control Hezbollah at this stage.

After the exceptional meeting of the Arab League that will be held tomorrow, intensified international calls are likely to take place via the UN, the US and the EU to study possible solutions. UN Security General Ban Ki Moon has already called on the international community to take steps to avoid further deterioration in the Lebanese situation.

There is without a doubt a perfect storm brewing.

Along with the synchronized unfolding of the Fuel, Food and Finance -- the 3Fs -- global crises, we are witnessing the convergence of TEN fundamental mega-trends in the Middle East including the Gulf Cooperation Council (GCC) countries: Kingdom of Saudi Arabia, Kuwait, the United Arab Emirates (UAE), Bahrain, Qatar and Oman. These mega-trends hold the potential for multiple black swans, i.e., unforeseen off-the-radar events.

I thought I'd share with you these convergences when analyzing the unsettling events of the last few days in Lebanon; convergences that might indeed affect us all in a major way and maybe brainstorm with you your thoughts.

The TEN fundamental mega-trends unfolding in the Middle East are in my opinion as follows:

1. The huge petro-dollar finance surpluses of the GCC countries and Iran manifest partially as "Sovereign Wealth Funds (SWFs)";
2. Rising inequality within the GCC countries and Iran as well as without, i.e., with neighboring countries like Lebanon, Jordan, Egypt, Syria and Yemen;
3. Strengthening of strategic energy, trade and finance links with China and Singapore; Malaysia and Indonesia; as well as India and Russia;
4. The step-by-step shift away from the US dollar as de facto reserve currency and American financial institutions as keepers of wealth;
5. Accelerating food, commodities and household goods inflation;
6. Rising domestic demand for fuel leaving less oil to export and rising price of energy;
7. Water constraints including those induced by nature and humans;
8. Exploding demographics with a skew towards an extremely large young population;
9. Extremism-dominated politics; and
10. Concentrated urbanization.

The mega-trends are likely to create conditions that will be politically challenging, and in some cases destabilizing, in many countries in the years ahead.

It seems that the confluence of these trends is very similar to those that occurred in the Middle-East in the mid to late 1970s -- with the Yom Kippur war in 1973 -- when the current Islamist wave of social identity and confrontational politics was initiated, including Munich in 1972 and its orchestrated aftermath.

I am afraid however the challenges will be much more difficult this time, and the consequences could be worse for the Middle East with ripple effects for the rest of the world, especially in view of:

1. The Hezbollah showdown with the Government in Lebanon;
2. Iran's growing influence strengthened by petrodollars;
3. The perception of Western weakness induced by a long war in Iraq and Afghanistan;
4. The continued stalemate between Israel and Palestine; and
5. The weakening of some Arab governments as a result of the mega-trends.

Barring the rich GCC countries and Iran, most Middle Eastern countries cannot subsidize energy and food prices forever, given the divergence between rising global prices for most commodities and limited government finances.

With the price of oil around USD 125 a barrel at present, most countries are being forced to allow domestic energy prices to reflect actual market costs partially. This means that household energy and fuel costs are likely to double for most families in comparison with what they were paying a few years ago.

Lebanon, Jordan, Egypt, Syria and other GCC countries have announced wage increases for public-sector employees, partly in response to political pressures from restless populations but also because of the deteriorating value of the US dollar to which many currencies are pegged.

The wage increases and special allowances are unlikely to keep pace with rising costs, and governments will not be able to sustain their policy to keep increasing wages in parallel with inflation.

In this environment, the next step is likely to be rising chaos across multiple sectors of the economy and segments of society, which will be manifest as multiple black swans with several unintended consequences.

For the smart operators, this "perfect storm" may however well be the best time ever to create real obscene wealth......What do you think? What are you doing to position yourself accordingly and/or weather the storm?

Your feedback would be greatly appreciated.

As usual, thanks much for your consideration.