Gentlemen:
According to a well argued and reasoned argument in Creature from Jekyll Island by Griffin , the ONLY mechanism for inflation today is increase of money supply by the govts/central banks...war is of all things bad, inflationary.
In this chilling report by Nyquist on Financialsense.com, our US position with respect to Israel and Iran is a real mess, we are f***ked.
jim black of austin tx
Weekly Column - 07.21.2006
Iran's Game and America's Fate
by J. R. Nyquist
The fighting in the Middle East between Hezbollah and Israel, demonstrates that force – not diplomacy – is the final arbiter between the tribes of the earth. The Secretary General of the United Nations has urged a ceasefire to prevent further loss of life. But the fighting continues. There will never be peace between Hezbollah and Israel, even if a ceasefire occurs. Hezbollah is a Lebanese Shi’ite militant group, self-named “The Party of God,” formed to resist the Israeli occupation of Southern Lebanon in the 1980s. Hezbollah is supported by Syria and Iran, while Syria and Iran are supported by Russia. Nothing is going to change in this equation, unless the regimes in Syria and Iran are overthrown. Hezbollah’s ideology derives its inspiration from the late Ayatollah Khomeini, founding leader of the Iranian Islamic Revolution. As a political party, Hezbollah has minority representation in the Lebanese parliament and government.
Russia’s senior Middle East expert, Yevgeny Primakov, publicly offered his opinion that Syria and Iran “probably” did not encourage Hezbollah’s attacks on Israel. As a former KGB general and head of Russia’s SVR (Foreign Intelligence), Primakov feels a protective impulse toward his Syrian and Iranian friends. The Russia alliance with Syria goes back many decades. The Syrian government buys most of its weapons from the “former” Soviet Union, and receives technical help from the Russians. At the same time, the Iranians purchased more than $1 billion worth of military equipment from Moscow. Some of these weapons are undoubtedly passed on to Hezbollah.
It is well known that Iran is developing nuclear capabilities with Russian assistance, and everyone can see that neither the United States nor Israel have bombed the Iranian nuclear industry. The United States and Israel cannot safely attack Iran without risking a larger conflict in the Middle East, including the disruption of oil flowing through the Strait of Hormuz, and an oil embargo organized simultaneously by Venezuela. Furthermore, it is believed that Iran can push Iraq’s civil strife into outright civil war. Iranian agents pepper the Shi’ite majority leadership in Iraq while Shi’ite militias stand ready to embarrass the Bush administration by demolishing the frail superstructure of Iraqi democracy.
Last February the U.S. National Intelligence Director, John Negroponte, told the Senate Intelligence Committee that Iran was arming Shi’ite fighters in Iraq. “Iran is located at the center of a vital and volatile region,” he explained. High oil prices have strengthened the clerical regime, which continues to provide “guidance and training to select Iraqi Shia political groups and weapons and training to Shia militant groups to enable anti-coalition attacks.” Negroponte emphasized that Iran is yet to unleash its full potential in Iraq. In other words, the Iranians are holding back, letting Washington know that serious pain will be inflicted if the Americans or Israelis bomb Iran’s nuclear project.
Negroponte also warned that Iran’s conventional military capabilities now pose a serious threat. “Iranian conventional military power,” he said, “constitutes the greatest potential threat to Persian Gulf states and a challenge to U.S. interests. Iran is enhancing its ability to project its military power in order to threaten to disrupt the operations and reinforcement of U.S. forces based in the region….” The Iranian regime itself is stronger, more stable, and more resistant to popular pressures than it was in the late 1990s. Iran’s hardliners are, said Negroponte, “more effective and efficient at repressing the nascent shoots of personal freedom that emerged in the late 1990s….”
The United States is not going to be rescued from its Middle East troubles by a democratic revolution in Iran. The Iranian clerics want to dominate the Persian Gulf and its oil wealth. This is their path to global power. In order to dominate they must drive the United States from the region, a goal they share with al Qaeda. Toward this great end the Iranian hardliners instinctively agitate. Former Iranian President Abolhassan Banisadr recently said that Iran in ends to provoke a region-wide war. How will this benefit them? Such a war would almost certainly ruin Iran’s economy, discredit its leaders and hobble its conventional armed forces (through dreadful attrition). But people who believe in millennial fantasies, who talk fondly of a nuclear exchange with Israel, aren’t entirely rational in their calculations. Instead, they are irresponsible fanatics moving from one crisis to another. Their actions will benefit Russia, not Iran, both in terms of the rising price of oil and the resulting weakness of the United States. Under conditions of war, Iran will not be able to export much oil. Russia, on the other hand, will be enriched at the West’s expense.
Iran’s leaders are foolishly determined to get nuclear weapons. They have talked about using those weapons on Israel. Whether or not they are crazy enough to unleash a nuclear war in the Middle East, the Israelis cannot afford to find out. In the not-too-distant future Israel or the United States will have to bomb Iran, despite the consequences, and that is when the real oil crisis will begin. If President Bush has appeased Islam, generally, by calling it a “religion of peace,” he cannot appease the Shi’ite clerics in Iran. Theirs is not a religion of peace. Any attempt to normalize relations with Iran, or open trade with Iran, will accelerate the country’s military build-up and convince the Iranian clerics that “the Great Satan” is weak and rotten.
Here we find, at long last, the strategic dead-end toward which the U.S. is headed. Given the financial instability of recent months, any significant disruption of energy supplies will send the global economy into a tailspin. The United States will not suffer a military catastrophe, but a financial catastrophe due to military-related disruptions. The Iranians cannot defeat the U.S. Air Force, but they can damage the U.S. economy by triggering a financial implosion. The timing of a U.S. or Israeli attack on Iran depends on the progress of Iran’s nuclear program. If the Israelis determine that the Iranians are dangerously close to becoming a regional nuclear power, the Israelis will insist on a strike. The United States will have to support the strike with silence, or participate in the strike – and ultimately take the consequences of a strike.
When will this sequence unfold? More likely next year than this year, when the United States and Israel have nothing left to lose in terms of the so-called “peace process.”
© 2006 Jeffrey R. Nyquist
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