Good post from John Rubino at http://dollarcollapse.com/. I agree with most of Jim Rickards’ assessment. I disagree on two major points. The storyline of Iranian leaders calling for Israel to be wiped off the map is a lie. It is repeated over and over by the MSM. Ask yourself who controls the MSM. I challenge anyone to prove that the Iranian leaders have called for Israel to be wiped of the map.
Secondly, Rickards is full of shit regarding Saudi Arabia filling the gap of 4 million Iranian barrels of oil per day. Saudi Arabia has ZERO spare capacity. This was proven during the Libyan invasion. They are incapable of ramping up production. China gets 11% of their oil from Iran and will not allow that to be cut off.
So the invasion of Iran would be far worse for oil prices. If struggling Americans had to pay $8 a gallon for gas, we’d enter a depression of epic proportions.
Be careful what you wish for. Invading Iran would be an epic blunder with consequences far greater than anything being discussed on the MSM.
Are We Really Going To Bomb Iran?
Just based on national balance sheets, 2012 will be somewhere between challenging and catastrophic. But debt and deficits might be the least of our near-term problems if Jim Rickards is right. In his latest King World News interview he predicts yet another war, “sooner rather than later”:
Iran will not be allowed to have a nuclear weapon. They’re going down that path, and this is coming to a head sooner rather than later. They don’t want to give up the program, so all the bargaining is a pretense. They go through the motions of negotiations but it’s all to stall for time.
The Obama administration has woken up to the fact that it’s time to get serious. Things are moving very quickly. Israel has integrated itself into the US and European command and there are joint US/Israel exercises; the pieces have begun to move on the chessboard.
For Israel this is existential. If Iran gets nuclear weapons they’ve said they’ll burn Israel to the ground. So it’s not just a strategic rebalancing, it’s life or death. The US wants to go in first [for a variety of reasons], but there’s residual distrust. How do the Israelis know that the US won’t reach an accommodation with Iran and leave Israel holding the bag? All the information I have is that the US is going to do it. We’ll take out their air force and command/control system, and suppress their missiles.
It is not in the US interest to see China cut off from Iranian oil, so we’ve cut a deal with Saudi Arabia to make up the difference. The Chinese care about the oil, not who’s selling it. Russia is more interested in selling weapons, so they’re approaching it as an arms dealer, selling weapons to replace the ones we destroy. They’re also the biggest oil exporter and win financially if oil goes up.
This will be done with air power, sea power, financial warfare, sabotage, special operations. It’s already going on: Iran’s nuclear scientists are being assassinated, financial sanctions on Iranian banks are being dialed up. The Iranian currency has plunged and inflation is soaring. This is financial warfare; the cyber warfare has been well-advertised.
The Iranians do have a few tricks up their sleeves, including submarines and speedboats. There will be casualties and the US will lose at least one vessel. Still, it’ll go fairly quickly and the US is counting on the Iranian people to rise up against the regime once the war begins.
It’ll take oil to $200 and gold past $2,000. We’ll see a general flight to safety and quality and a lot of volatility in the stock market.
Some thoughts
Rickards is analyzing and predicting, not advocating, so don’t blame the messenger. His scenario is consistent with what Israeli leaders have been saying for years and more recently with the movement of US warships to the region. Something big does seem to be coming.
For more details see this excellent report by Chris Martenson.
In one sense this latest war is, if not right, at least understandable. A fight is clearly brewing and the US wants to both protect an ally and keep the oil flowing.* But in another sense it’s absurd. Multiple simultaneous wars are for solvent superpowers with sound currencies and flexible finances, and the US no longer qualifies. Our military is overextended and exhausted and this year Washington will borrow its defense budget from China, add another trillion to the official national debt and maybe three trillion to unfunded liabilities and other off-balance-sheet but very real obligations.
Austrian economics — and common sense — teach that the more leveraged the system the less able it is to withstand external shocks. And war in the Middle East sending oil to $200 would be the mother of all external shocks.
$8-a-gallon gas would be like a gigantic tax increase, shifting the global economy back into reverse and preventing the peripheral Euro-zone countries, Japan and the US from getting their borrowing under control. Who will buy the extra trillion or so dollars of sovereign debt? The world’s central banks, obviously, so the printing presses will run flat-out for the rest of the decade.
The secondary effects are harder to predict but far scarier. The global financial system is hiding trillions of dollars of bad loans and nearly a quadrillion dollars of derivatives, which is another way of saying the developed world’s biggest banks are ready to evaporate. Will the Fed and ECB be able to stop that avalanche when it comes? Who knows? It looks like we’re back at square one in the inflation/deflation argument.
Sancho says:
“the US is counting on the Iranian people to rise up against the regime once the war begins…” and I am counting on the tooth fairy to pay down my mortgage.
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16th January 2012 at 10:16 am
Administrator says:
Sancho
How can you doubt our wise leaders? Remember that sage Dick Cheney saying the same thing about the Iraqi people. How’d that work out?
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16th January 2012 at 10:27 am
rightwinger says:
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16th January 2012 at 10:34 am
Administrator says:
John Bolton is a neo-con shithead. How’d his sage advice work out in Iraq? He was one of the morons who said it would cost $50 billion. Real price –> $4 trillion. Just slightly off.
Before we invaded Iraq, Iran had no influence there. Now they have huge influence.
Rightwingnuts don’t understand the concept of unintended consequences.
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16th January 2012 at 10:39 am
Persnickety says:
The issue of oil price and capacity is hard to exaggerate. The effect of a war with Iran would be (as admin says) to spike oil prices sky high, since no one has any useful spare capacity. The kind of price spike would be a death blow to the global economy.
The main question I have is whether the people pushing for war are just that stupid and don’t realize this problem, or if they know it full well and want this war primarily to bring about the total collapse of the global economy. Collapsing everything is often the easy yet covert way of taking over what remains afterward.
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16th January 2012 at 10:56 am
ragman says:
JBES
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16th January 2012 at 11:39 am
righwinger says:
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16th January 2012 at 11:50 am
Administrator says:
rightwiger
John Bolton is a chickenhawk who would sacrifice other young men’s lives to spread his neo-con wet dream around the world at the point of a gun. You are too dense to understand the difference between isolationism and interventionism. Too much to expect from a nimrod without two brain cells to rub together.
Just speculating, but you sound vaguely familiar to someone named Smokey. That mangy cur wouldn’t be sneaking onto the site under the cover of an alias, would he?
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16th January 2012 at 12:02 pm
OF says:
Sorry, admin, but I remember a speech given by Achmadinejad where he expounded on how Israel is not supposed to exist and that it must be wiped out – before a large crowd.
I don´t speak farsi, so if that was wrong then they must have meddled with the translation, which I doubt, as the news were full with that story next day and no Iranian complained about translation issues.
Which doesn´t mean that the Nato-crop isn´t permanently trying to provoke Iran.
But on the other hand, if you have the western forces on your tail why be so f*****g stupid and say shit like that? As a president of a country?
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16th January 2012 at 12:05 pm
Administrator says:
THE STORY OF A CHICKENHAWK:
John Bolton did not serve in Vietnam. He wrote in his Yale 25th reunion book “I confess I had no desire to die in a Southeast Asian rice paddy. I considered the war in Vietnam already lost.” In an interview, Bolton discussed his comment in the reunion book, explaining that he decided to avoid service in Vietnam because “by the time I was about to graduate in 1970, it was clear to me that opponents of the Vietnam War had made it certain we could not prevail, and that I had no great interest in going there to have Teddy Kennedy give it back to the people I might die to take it away from.”
AS RON PAUL TOLD ANOTHER CHICKENHAWK – NEWT GINGRICH – “WHEN MY COUNTRY CALLED, I SERVED.”
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16th January 2012 at 12:13 pm
Administrator says:
OF
The translation spouted by the MSM has been proven to be wrong. The statement was immediately disavowed by Iran. Don’t believe the bullshit.
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16th January 2012 at 12:16 pm
Yojimbo says:
I hate to point out the obvious, but there is a Zionist elephant in the middle of the living room.
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16th January 2012 at 12:47 pm
OF says:
Wow… That´s intense…
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16th January 2012 at 1:21 pm
Steve Hogan says:
I heard the Rickards interview too. While I have a lot of respect for him, and many of his predictions come to pass, I also didn’t hear a single comment from him about the evidence of an Iranian nuke program. It’s probably because none exists.
Maybe it’s just me, but after the Iraqi WMD fiasco, you’d think we’d demand something more than mere assertions from neocon hacks and lying politicians about nukes. Is there proof that Iran has diverted nuclear material from its energy program? Nope, the IAEA would know of it.
Have there been any Iranian nuclear scientists that have defected? Nada. Have they brought incriminating documents with them of a clandestine program? [crickets chirping]
Let’s get real. This has nothing to do with Iranian nukes. The empire does not like foreign regimes that do not toe the line. And Israel, it should be noted, has the US Congress by the short and curlies.
This looming war is about oil, Israel and empire. All the bluster about nukes is to scare the sheeple. Nothing more.
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16th January 2012 at 1:36 pm
AWD says:
“$8-a-gallon gas would be like a gigantic tax increase, shifting the global economy back into reverse and preventing the peripheral Euro-zone countries, Japan and the US from getting their borrowing under control”
That’s a laugh. The Euro-zone, Japan and the U.S. have no intention “getting their borrowing under control”, none, nada, zip. That ridiculous belief somehow compliments these countries, who have used to debt to enslave the people of their countries, and that it is somehow good.
Life and death for Israel. That’s been the case since they decided to declare themselves a state.
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16th January 2012 at 2:06 pm
Mary Malone says:
Persnickety: “if they know it full well and want this war primarily to bring about the total collapse of the global economy”
That’s what’s going on here, IMHO.
Full scale war with Iran, disruption of oil delivery, production would increase gas to $8 gallon. Exactly where Mrs. Reggie Love wants it.
That way, he will force Americans to buy those crappy electric cars, move into pod housing near train stations.
They suburbs would be toast. Roads unpaved, tolls sky-high. Americans would not have any real choice anymore – they’d beg to live in the fake cities near public transit and the leave their cars behind. Bike paths are already in place in most cities.
They have us right where they want us. gathered together in small geographic area. Easy to control and monitor.
This green movement has never been about the environment. It is about power and control.
Time is running out.
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16th January 2012 at 2:20 pm
Kill Bill says:
If struggling Americans had to pay $8 a gallon for gas, we’d enter a depression of epic proportions. -Admin
But you could buy a SUV el cheapo to live in.
~~~
John Bolton on loves this country and would give his life to protect and defend our freedom -RW
Oh pleez. Spare me the ludicrous yabbering.
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16th January 2012 at 2:28 pm
Administrator says:
KB
Doesn’t his phraseology remind you of Smokey.
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16th January 2012 at 3:03 pm
cv51 says:
This might be your last winter to get your skills together for seed germinating and plant propagation. 8$ per gallon gas might make for expensive trips to the grocery store. I recommend http://www.johnnyseedsonlinecatalog.com/WebProject.asp?CodeId=7.4.3.6&BookCode=jon10flx#
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16th January 2012 at 3:58 pm
KaD says:
Oh yeah, it’s getting interesting. Here’s what TPTB are terrified of:
Occupy DC Resolution Targets Campaign Finance
http://www.collapsenet.com/free-resources/collapsenet-public-access/news-alerts/item/6058-occupy-dc-resolution-targets-campaign-finance
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16th January 2012 at 5:16 pm
Novista says:
righwinger
Damn, admin beat me to it on Bolton’s quasi-military service to his country; he had a higher calling, as he was for the war before he was against it and realized it was a lost cause.
There’s another feather in his cap: Covington & Burling (godfathers of MERS) [note to MM] heh.
Now, we’ve dealt with the big names, what about your military service to protect and defend? I had mine, U.S. Army, and remembering that oath, I have joined Oath Keepers. Show us yours.
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16th January 2012 at 8:22 pm
Mary Malone says:
Novista: “There’s another feather in his cap: Covington & Burling (godfathers of MERS) [note to MM] heh.
Wow.
I’d like to create one of those relationship maps that highlights MBS fraud, Endless Wars and Runaway Debt.
How much you wanna bet that all players will be connected to Covington & Burling, Goldman Sachs and The Fed?
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16th January 2012 at 10:46 pm