Iran is SCREWED!!!!!!

[Jay]

Re: Iran is SCREWED!!!!!!

Also, what if the US had some technological solution to the problem of replacing oil and just has not yet gone public with the information. That would indeed change the calculus would it not? The world depends on a stable supply of oil for it's needs, take away stability and the world is going to go looking for a new solution. That prospect can't make oil producing countries too happy.

Maybe the US has a few ideas about how to transition away, but can't or won't as long as Iran goes their own way. For a stable economic transition where the US maintains most of the cards, the strategic planners may feel that Iran as an oil producer is big enough to potentially upset that balance. Adding Iran to the stable of other large producers which they have leverage over, might be enough to force the world to go along with what ever energy plans the US might lay out.

[Jay]

Re: Iran is SCREWED!!!!!!

...exacerbating the employment and demand problems that deficit spending is meant to alleviate.

Didn't WWII create a hell of a lot of demand?

[touchring]

Re: Iran is SCREWED!!!!!!

Didn't WWII create a hell of a lot of demand?

Didn't someone here say that WWII helped destroyed all the factories in Europe so that the US reigned supreme for decades after that? We can assume that war helps boost demand if only the war is not at home.

[D-Mack]

Re: Iran is SCREWED!!!!!!

Didn't WWII create a hell of a lot of demand?

Didn't someone here say that WWII helped destroyed all the factories in Europe so that the US reigned supreme for decades after that? We can assume that war helps boost demand if only the war is not at home.

Recently I came across articles talking about Land_Lease to a pretend war by Peter Schiff

The Realist Prism: A Lend-Lease Program for the 21st Century

...

Many smaller countries in the world, particularly those located in dangerous neighborhoods, cannot afford to purchase new defense systems outright. But they do have sufficient budgetary resources to pay for maintenance costs and to enlist the personnel to use the equipment. At the same time, the United States has a shrinking industrial base that is feeling the effects of cutbacks in defense orders.
The genius of the original Lend-Lease program was to get around the cash-and-carry provisions of U.S. law that required other states to pay up front for American equipment, by giving the executive branch the authority to transfer defense materiel to other countries on a «leasing» basis if, in so doing, U.S. national security interests were protected. Other countries, especially the United Kingdom and the Soviet Union, received arms that enabled them to stem the Nazi advance — and the increase in defense orders helped pull U.S. industry out of the slump created by the Great Depression.
What would a 21st-century Lend-Lease program entail?

..
http://www.america-russia.net/eng/fa...45d5473bc4e7b2

Debating Lend-Lease for the 21st century
Posted by Nikolas K. Gvosdev on 07/13/2010 :: Permalink :: Comments
Last week, in a column for World Politics Review, I floated the idea of setting up a 21st century version of Lend-Lease, to cope with the growing cap between the capabilities that countries around the world can field, especially in securing the global commons, and the security challenges which are out there.
I asked some of my colleagues at the U.S. Naval War College to react to this essay, which, as I noted, was an idea, not a fully-formed proposal. Here are some of the reactions. [My original column--and these responses--are all the personal opinions of the authors, none of us are speaking on behalf of the Navy or the U.S. government.]


....

http://sitrep.globalsecurity.org/art...for-the-21.htm

Why Not Another World War?

by Peter Schiff


..
The big question is how to pay for it. To a degree that will surprise many, the US funded its World War II effort largely by raising taxes and tapping into Americans' personal savings. Both of those avenues are nowhere near as promising today as they were in 1941.



..
http://www.lewrockwell.com/schiff/schiff102.html

[jtabeb]

Re: Iran is SCREWED!!!!!!

Actually his could be exactly what The US is looking for. I failed to include in my last analysis that the Price of crude could plummet after a small spike, just like during the first gulf war. The reason? Simple, the only thing keeping the world economy pumping right now is the provision of dollar liquidity on the part of the US. If they were to stop pumping liquidity into the system, world trade would rapidly decline. So much so that it is not out of the realm of possibility that crude demand drops faster than supply is cutoff if say the straights of Hormuz were blocked, which is responsible for about 1/5 of world crude traffic. In this case, a brief spike to say $100 bbl is then followed by a rapid decline below say $40 just like what we saw during the height of the financial crisis in 2008. This is a very real possibility and you only have to look at the situation 2 years ago for proof. We know how commodity prices can be manipulated by the big banks and this would seem no different. Any windfall from an Israeli or US attack on the oil price would quickly be given back and MORE as demand collapsed further. I should have included this as a possibility yesterday, but I hadn't thought that far ahead.

The Iranians are in that classic no-win paradigm right now vs the WIN-WIN scenario for the US, that is the textbook definition of wrong-footed. What's that line in the Movie "War Games", I think it is "The winning move is not to play". They only way the can salvage anything is by choosing to exit the paradox on terms that further their interests and the only way to do that is by gaining the best technological and security and trade concessions they can in exchange for voluntarily suspending their nuclear program. They can chose to Lose or Draw (get concessions in exchange for halting nuclear program) but that's it. They can't do better than that. It Sucks for them to be outplayed this badly, but there it is, again.

[ASH]

Re: Iran is SCREWED!!!!!!

Didn't WWII create a hell of a lot of demand?

Defense spending creates demand, but then so do other types of spending -- either alternate civilian uses for public tax dollars, or private uses for taxes not collected. The main economic significance of WWII was that it wasn't politically possible to run massive deficits in that era without an overriding national security justification, so the war unlocked the government's ability to borrow and spend on a massive scale (and tax). Also, as touchring mentions, the accompanying destruction of supply (both factories and materiel) was important.

There are several reasons I don't think bombing Iran would have a similarly positive economic impact. For one thing, today's government no longer needs a national security justification to engage in massive deficit spending. It's true that national security is still a politically potent justification for deficit spending, but that is not the same as being the only politically acceptable justification for deficit spending. Folks (by which I mean J6P) are getting itchy about the deficit and debt because they don't perceive much improvement in the economy and suspect the spending has all been for the benefit of the well-connected. Support for stimulus measures that put cash directly in the hands of the public would probably be greater. However, the other big difference between WWII and today, with respect to deficit spending, is the relative credit-worthiness of the US. Today we're already deep in the hole, we owe a significant portion of our debt to foreigners, and we're a declining economic power with a structural trade deficit. We face tougher constraints on our capacity to borrow than we did in WWII.

Another issue I see is that we're already fighting two regional wars, and Iran won't be a generational call to arms that mobilizes the entire nation -- at most it would be more of the same. There are plenty of people who have jobs, and businesses who have orders, because of the defense spending in connection with our wars in Iraq and Afghanistan over the past decade, but that bolt is already shot. We don't have the manpower or resources to open a ground war in Iran, so any action taken will be over very limited scope -- this is going to stay regional, and it's not going to catalyze a massive national mobilization. Another issue connected with scope and our smaller military is that today's hardware is more costly, more capable, and produced in much smaller numbers, than in WWII. The lethality is there, but fewer units means no mass manufacturing employment to supply it. Defense dollars spent on procurement get concentrated in the hands of a smaller number of high-wage workers, rather than vast armies of production line workers. So there is less employment bang for the buck (measured in terms of heads rather than dollars).

The last big difference I see is that we're talking about constraining the supply of the critical input for economic activity. Lots of commodities became scarce during WWII because of competing demand from the war effort backed by the power of the state to claim those resources; many civilian goods were in short supply because industrial production had been shifted to war materiel. However, this was all driven by demand -- overall production didn't drop. Now, in this thread, we're contemplating a situation in which energy supply is reduced.

[Jay]

Re: Iran is SCREWED!!!!!!

Defense spending creates demand, but then so do other types of spending -- either alternate civilian uses for public tax dollars, or private uses for taxes not collected. The main economic significance of WWII was that it wasn't politically possible to run massive deficits in that era without an overriding national security justification, so the war unlocked the government's ability to borrow and spend on a massive scale (and tax). Also, as touchring mentions, the accompanying destruction of supply (both factories and materiel) was important. There are several reasons I don't think bombing Iran would have a similarly positive economic impact. For one thing, today's government no longer needs a national security justification to engage in massive deficit spending. It's true that national security is still a politically potent justification for deficit spending, but that is not the same as being the only politically acceptable justification for deficit spending. Folks (by which I mean J6P) are getting itchy about the deficit and debt because they don't perceive much improvement in the economy and suspect the spending has all been for the benefit of the well-connected.

Bear with me as I play the devil's advocate a bit here.

Might not war again be a useful tool to unlock spending if the political pressure towards austerity gains steam?

If the oil price goes to 500$ as the straights are closed we would be looking at a global economic upheaval, no? The entire global energy superstructure would be changed. I suspect this might end up causing all sorts of changes in supply and demand and likely would be associated with a good bit of global Shumpeterian creative destruction even if the war is small and limited. Maybe this would be more helpful for other economies, but I think the US with its many economic advantages would be in a decent place to come out on top or near the top again.

Support for stimulus measures that put cash directly in the hands of the public would probably be greater. However, the other big difference between WWII and today, with respect to deficit spending, is the relative credit-worthiness of the US. Today we're already deep in the hole, we owe a significant portion of our debt to foreigners, and we're a declining economic power with a structural trade deficit. We face tougher constraints on our capacity to borrow than we did in WWII.

I think many here would agree that a direct cash infusion to the American people would be helpful. In many ways it approaches a debt jubilee if you take the concept far enough. It also is essentially unsterilized printing, that more than anything would limit our creditors willingness to loan the US money I would think. However, increasing the price for a barrel of oil does create a real borrowing need internationally.

Another issue I see is that we're already fighting two regional wars, and Iran won't be a generational call to arms that mobilizes the entire nation -- at most it would be more of the same. There are plenty of people who have jobs, and businesses who have orders, because of the defense spending in connection with our wars in Iraq and Afghanistan over the past decade, but that bolt is already shot. We don't have the manpower or resources to open a ground war in Iran, so any action taken will be over very limited scope -- this is going to stay regional, and it's not going to catalyze a massive national mobilization.

I would just say that American attitudes are fickle and something as unpredictable as a domestic terror attck or other simliar event would be enough to change public opinion in my mind. With the pressures that are building I don't rule out an accident which quickly changes perceptions.

Another issue connected with scope and our smaller military is that today's hardware is more costly, more capable, and produced in much smaller numbers, than in WWII. The lethality is there, but fewer units means no mass manufacturing employment to supply it. Defense dollars spent on procurement get concentrated in the hands of a smaller number of high-wage workers, rather than vast armies of production line workers. So there is less employment bang for the buck (measured in terms of heads rather than dollars).

Who needs employment as long as the world is buying dollars again?

The last big difference I see is that we're talking about constraining the supply of the critical input for economic activity. Lots of commodities became scarce during WWII because of competing demand from the war effort backed by the power of the state to claim those resources; many civilian goods were in short supply because industrial production had been shifted to war materiel. However, this was all driven by demand -- overall production didn't drop. Now, in this thread, we're contemplating a situation in which energy supply is reduced.

It is less about production, supply and demand than about forcing dollars down the throat of the world. As for helping the global economy, it will obviously hurt initially, but I would guess the hope of those in power would be to create a new global energy economy. I don't know whether this transition would resemble the gains from the industrial revolution or look more like the fall of Rome but I doubt anyone else does either. It could actually look like both depending on your time frame. Remember, the whole scenario is based on the fact that monetary policy is backed into a corner.

[D-Mack]

Re: Iran is SCREWED!!!!!!

'US psywar plan includes 2 hot wars'
Mon, 26 Jul 2010 23:58:29 GMT


Iranian President Mahmoud Ahmadinejad says the United States and Israel plan to attack two countries in the Middle East as part of a conspiracy to apply pressure on Iran.

"We have precise information that the Americans have devised a plot, according to which they seek to launch a psychological war on Iran," Ahmadinejad stated in an exclusive interview with Press TV on Monday.

"They plan to attack at least two countries in the region within the next three months," he added.

He said the US seeks to achieve two main objectives with the scheme.

"First of all, they want to hamper Iran's progress and development since they are opposed to our growth, and secondly they want to save the Zionist regime because it has reached a dead-end and the Zionists believe they can be saved through a military confrontation," Ahmadinejad explained.

http://www.presstv.ir/detail.aspx?id...onid=351020101

I'm surprised he doesn't name the countries targeted and why is he talking about a psywar ?
Candidates would be probably Syria, Lebannon and Iran, I assume.

[sishya]

Re: Iran is SCREWED!!!!!!

Don't under-estimate the 10th Century Islamo-fascists now ruling Iran to use their gallows to cut-off any and all protests.

Never forget the lesson of World War II: Appeasement only made Hitler's nazis stronger and bolder. Britain's mis-guided appeasement policy made WWII inevitable, and Britain's appeasement policy made WWII worse than it needed to be.

Using force to knock-out the regime in Tehran, even using a nuke against that regime to finish them off, would help the West and help the cause of freedom. The clerics running Iran should have been taken-out decades ago.

Maybe you should go and fight all these unwanted wars to be a world policeman. Who gave you the authority - another God given right ?

[sishya]

Re: Iran is SCREWED!!!!!!

Well, it looks like what was postponed a decade ago will now come to fruition. My buddy who I used to fly tankers with told me recently that they we doing exactly the same thing we did in the run up to the Iraq war. It's all ready to go. That is his opinion, he is still in the tanker, I've been out for five years so it helps to have contacts that are still current on the real world stuff (been in training command so I get all my info from my friends that are still active on the pointy tip of the spear).

Thanks for sharing. I am concerned of all these wars and angry/helpless as well. If this happens, I will remember Aaron Russo who was buddies with Nick Rockefeller informing that Iran and
Chavez are going to be taken out. Sad if this comes to fruition.

[Starving Steve]

Re: Iran is SCREWED!!!!!!

Maybe you should go and fight all these unwanted wars to be a world policeman. Who gave you the authority - another God given right ?

Press a button on a ship, maybe a ship like the U.S.S. Ronald Reagan, and then go have coffee down-below the main deck. The hornets' nest in Tehran would be taken-out. A few missiles or a few airplanes, and the problem in Tehran would be solved. The infection would be lanced.

A demonstration of American might, and the willingness to use that might, would prevent a WWIII and stand as a warning to tyrants everywhere. The Taliban would sh*t their pants. Not only that, the dollar would rise, U.S. assets would rise in dollar terms, and the Great Recession would be over.

[sishya]

Re: Iran is SCREWED!!!!!!

The Iranians are total ******* idiots because they miscalculated so badly.
They don't even freaking know why the us and Israel gave them so much time to build up their enrichment facilities. The US and Israel ALLOWED this to happen so that there would be no real objection to a preemptive strike, even a nuclear one, because world opinion has been so galvanized against Iran and the threat that it poses. Israel and the US wanted to use nukes on Iran from the get go bet had to wait until the rest of the world was basically begging for the US and Israel to do anything and EVERYTHING to stop Iran from acquiring a complete nuclear weapon system. Iran has now provided these two provocateurs (the US and Israel) with all the justification needed to conduct a preemptive nuclear first strike and with the worlds blessing no less.

No I don't think the world population or Media supports USA/Israel taking out Iranian Nukes. Some leaders - may be that's all. The whole Muslim population will turn against this including all the powerless humanity. If this happens - Not Good.

[sishya]

Re: Iran is SCREWED!!!!!!

Yes I believe a War with Iran will help Dollar demand(hard currency - oil priced in $) world wide. If Oil goes to $500, then everyone will need so much dollar. But then again it will
cause demand shock as well and later prices will come down. Treasuries also I believe will asct as safe haven. All this will also depend on Iranian Reaction

[jtabeb]

Re: Iran is SCREWED!!!!!!

I disagree wholeheartedly. I personally have friends that live in the middle east (family, my dad's relatives actually, my father was Palestinian, he died fighting the Russians in Afghanistan circa 1984) and what I have learned the most from visiting them and talking with them is that about 85%-95% of people just want to live in peace. They don't want the threat of a Nuclear Armed Iran hanging over the stability of the region. It is why the leaders of many Middle Eastern Countries are offering their tacit approval of such a strike, because they know there will not be ANY strenuous objection from their domestic populations. Indeed, many Suni Arabs would revel at a Shia Iran getting smacked down. (Don't forget Iran is Shia and Persian, most of the rest of the Arab-Muslim world is Sunni). This is A HUGE FACTOR in the calculus. My Uncle is an EXTREMIST Sunni Muslim and he hates Shia more than the Israelis (well, almost). To him it is okay for a Sunni to Kill a Shia BECAUSE HE DOES NOT CONSIDER THEM MUSLIM!?! Can you believe that. It's true though. I think there are many MANY Sunni like this, a super-majority, if you will, and that is why I fundamentally think you are wrong about your concept of any Muslim Unity forming in support of Iran's cause. I see the exact opposite happening instead, I see the Arab-Sunni Muslim world uniting (again 85-95%) in support of the effort to dismantle Iran's nuclear capability, even if it comes to attacks, because the Lion's share of people in the middle east just want economic development. They want to be able to get married which better economic trade conditions would allow. People like my cousin Said just wants to make enough money to get married and buy a house and provide for his future children, he is 35 and lives on the west bank. I promise you, the last thing he wants is anything that disrupts economic normalization because that pushes off his personal goal of being able to marry. Almost ALL of my cousins are like this. The girls too. They want to marry a person that they LOVE, not have to marry some one that has been arranged for them due to economic hardship of the family. If you haven't been to the middle east you have to understand that most people don't have sex until they are married, especially the religious ones like my family in the west bank and in Jordon. They want to live a halal life and they need economic mobility to do this. A Nuclear Iran provides the exact OPPOSITE of economic mobility and thus ruins their chances to marry and have sexual relations in the manner proscribed by the Prophet Mohammed P.B.O.H.. It really this fundamentally simple. Iran going totally against this religiousness with it's nuclear program and that is why they will never have the support og either the secular or religious. The secular want economic mobility for economic mobilities sake. The religious want it so that they can preserve a halal life style, they can't do that if they can't afford to marry. This reason and the reasons above are why I think your conclusion is totally false. But, Hey, I'm just the guy who has been long 100% gold and silver since 2000 and beat Itulip by 400% on an annualized basis, so what do I know, right?

I think you also have to understand how people in the middle east still view the US. I live in the US and am in the US Air Force and am Muslim, and have family in the middle east so I kind of have a unique perspective on things. My Aunt once asked me which was better, the US or the West Bank. I was trying to be nice, so I said the West Bank. She scolded me and told me I was wrong, because in the US I have freedom and economic mobility (which they DID NOT). She told me I was stupid for not understanding this. I saw her point then( post 9/11) and it is still valid now.

Anyway, this is a good discussion. I hope that you do not take offense in anything I said, I was just trying to be as honest as I can. I tend to upset people when I do this so I try to apologize in advance, I'm just kind of a direct person and tend to say more than I should because I like to prove people wrong when they are wrong, and myself right when I am right. It's a character flaw that I'm working to resolve.

V/R

JT

[ThePythonicCow]

Re: Iran is SCREWED!!!!!!

But, Hey, I'm just the guy who has been long 100% gold and silver since 2000 and beat Itulip by 400% on an annualized basis, so what do I know, right?

I'll wager there are some Goldman Sachs vice presidents, and a resident of the White House, who have done even better than that since 2000. You may be confident that I place less stock in their words than I do yours, or EJ's.

It's a character flaw that I'm working to resolve.

Take your sweet time on that project, jtabeb. You're precious just the way you are.

Thanks for that last post, and this thread. Very valuable stuff.