Could Iran Bring Down the Western World Economies?

Ironically, Obama’s “just a tiny country” may be the lynch pin that brings the US and the rest of the western world to their knees; economically speaking. More precisely, it would be the high oil prices brought about by a military conflict with Iran that very possibly could destabilize the fragile economies of the US and Europe.

Can a military conflict with Iran be avoided? It appears highly unlikely to this casual observer. Fifty years of inept foreign policy in the Middle-East has has boxed the US into a corner from which it can not escape. The world believes that Iran is developing nuclear weapons and Iran’s claims to the contrary are given no weight.

Many have made the argument that the nuclear ginnie is long been out of the bottle. They argue that, if rogue regimes like North Korea are allowed to have nuclear weapons, why not Iran? In my opinion, those that make that argument are forgetting the unique history of Israel. And, because of that unique history, there are two principles that drive policy in Israel : no regional enemy can be allowed to develop weapons with which they could threaten or blackmail Israel; and, Israel can never place their security in the hands of a third party (the United States). Therefore, either the United States will take the lead in stopping Iran’s nuclear program or Israel will.

Look at what has happened to oil prices with just the threat of a conflict. What will happen to oil prices when the action starts? This CNBC article gives us a hint:

“Think $150 or even $200 a barrel,” the report said.

How serious the impact those kinds of oil prices would have on the economies of the US and Europe depends on how long prices stay at those levels and that in turn depends on how long the conflict will last. The pundits tell us the conflict will not last long.

On this issue, I am a glass half empty guy. I have some questions for the “pundits”:

  • How long is not long? A couple of weeks? A couple of months= Or longer? Isn’t the real question how long will it be before the oil flow from the region is returned to normal, including Iranian production?
  • Iran, obviously, knows they are going to be attacked. Shouldn’t we expect that they have some surprises planned? Would they respond with terrorist attacks in different parts of the world? Besides Israel, might they also attack Saudi oil fields? Do they have a viable plan for shutting down the Strait of Hormuz?
  • Will Israel’s other enemies in the region see this conflict as an opportunity to pile on? If they do, it will turn an Israel/Iran conflict into a regional conflict and the time to stabilize the region will increase.
  • Are the pundits correct in believing Iran’s allies, Russia and China, will stay on the sidelines?

So, it is possible that Obama’s “just a tiny country” could throw Europe and the US into another recession if not worse.

Well, that’s what I’m thinking. What are your thoughts?

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30 thoughts on “Could Iran Bring Down the Western World Economies?

  1. Obama will first exhaust the strategic reserves before any war. That is why he is more than happy to see the price rise and justify his releasing the reserves. Then shortages, then…well, you know the rest of the story.

    1. Sure he will. Then he’ll have more bogus justification to make everybody pay their “fair share.”

      As President Obama again considers tapping the Strategic Petroleum Reserve to ease gas prices and political pressure, the bad news of his last oil release and proposed budget cuts is settling in: the fund to replenish his fuel withdrawals could be as much as $1.5 billion short.

      According to oil analysts and federal reports, the administration has yet to refill the reserve following last year’s draw down of 30 billion barrels from the 727 billion in storage.
      http://washingtonexaminer.com/politics/washington-secrets/2012/02/fund-refill-strategic-petroleum-reserve-15-billion-short/323566

  2. 16 US intelligence agencies agree that Iran does not have a nuclear weapon.
    http://www.latimes.com/news/nationworld/world/la-fg-iran-intel-20120224,0,5827032.story

    While they are Muslims, they’re not stupid people there. The only real weapon they’ve got is their vast oil resources which can be used to manipulate the markets. China and Russia have talked about supporting Iran in the event of an attack. Newsflash: China owns our debt.

    In The Thousand Year War by Richard Maybury, there’s a map of “Chaosstan” and it shows that the oilfields seem to be located on all the borders of those countries. I’ll just say that this is all lining up perfectly with the prophetic books. Current events are reminding me of verses I’ve read, for instance, there is a super-bad demonic beings locked up under the Euphartes to be released during the Tribulation. The way things are going in that part of the world drives stuff like that home for me.

    1. In the end, the only intelligence agency whose opinion matters will be that of Mossad. If Israel believes they must attack Iran for their own self interest, they will and they won’t give a damn what our government thinks. Put yourself in their shoes and you would do the same.

      1. Here’s the thing, the recently retired head of Mossad said that all this attacking Iran talk was “crazy”. The current head of Mossad seems to think similarly and says to tone down the “existential threat stuff”.

        http://www.israelnationalnews.com/News/News.aspx/152640#.T1YDY_GPlKY

        http://thenewamerican.com/world-mainmenu-26/asia-mainmenu-33/10412-mossad-spy-chief-iran-nuke-not-existential-threat

        What I see going on is the intelligence agencies in both the US and Israel saying Iran isn’t all that. Then I see the politicians of both countries bought and paid for by the MIC saying we need a war real bad. Remember the founding minutes of the Carnegie Endowment for International Peace: war is the fastest way to change a society. With each one, the US has become less free, and this is the plan.

  3. Much of the Northeast in the United States heats with oil. Heating costs have been high this season — even though we’ve had a very mild winter. If the price of oil goes even higher, you’re going to see a lot of individuals and businesses go under.

    In my case, the cost of heating my very small home, which is very energy efficient, has run at least $600/month this winter. Just imagine if that cost doubles next winter!

    If the Saudi oil fields are attacked, the cost of heating oil will like more than double.

    Iran, at the moment, is holding the West hostage in many ways. Does the West even realize that?

    As for Russia and China, I’m not so sure that they are really going to stay on the sidelines. Maybe overtly, but certainly not covertly. Those countries have their own agenda, and that agenda does not include the well being of “competing” nations.

  4. Like Republican Mother, I do not believe the Iranian mullahs are irrational. They are crazy like a fox. They act crazy, brandishing their purported nukes, causing the world to tremble and the price of oil to go up.

    We should be concentrating on breaking up Syria. That would indeed be a blow to Iran and their Hezbollah proxies in the Levant.

  5. I have to say, I disagree with RM and Silverfiddle on this one. I think the Mullahs are nuttier than fruitcakes. I think they, and Amadinnerjacket are apocalyptic nutjobs. That’s the reason not to allow them to have nukes. The Soviets (now Russians) and Chinese, along with the Brits, the French, Israelis and Indians have a strong tendency to want to live and also to have their country remain intact. I’m guessing the Mullahs also want to live, but they don’t seem to give much of a rat’s ass if anyone else in their country lives. They seem pretty casual about throwing away other people’s lives.

    Yes, Iran can cause a huge economic problem. One more reason to get Obama the hell out of office. What has enabled Iran to be in a position of strength is years of people in America telling us that no oil will be of any use tomorrow (for a generation we haven’t drilled partly because the oil we’re drilling for will not have any impact for 10 years) and politicians caving to environmentalists. In the Western hemisphere there is enough energy resources that we could insulate ourselves from disruption of middle east oil problems. The argument is that there is a world market, but that market is subject to supply and demand, so the way you impact it is to control supply. OPEC figured that out a while ago. Why haven’t we?

  6. It’s a nightmare any way you slice it. Iran and it’s leaders are crazy and we can’t assume they will act rationally. As for Russia and China let’s hope they stay on the sidelines. They really don’t have much to gain.

    1. Agreed. The Iranian leaders are indeed crazy. The Russian and Chinese leaders are only concerned about world dominance (economic, militarily or otherwise).

  7. This has the potential to become a huge fur ball, and fast. I can’t help but think that we’re being maneuvered right into a war.

  8. This is a very perilous situation over there and if war comes it WILL thow the world into a deep recession or maybe even a depression. I still cringe when I hear Obama chide the Republicans over their concern in Iran because it was a tiny country. He really didn’t have any clue what he was getting himself into when he ran for president.

  9. This is an issue Obama administration should have approached head-on immediately following his inauguration. Instead he wasted his time on porkulus and Obamacare. It will come back to hunt him.
    I agree with all commenters who say that mullahs are irrational — just look at the mess they’ve made of their own country.

  10. Iran and nukes.

    So we are concerned about the ‘possibility’ of Iran getting a nuke? What did we do with North Korea when they were in the EXACT same position? What about India? What about China? What about ALL those missing high yield nukes from the collapse of Russia? And we’re concerned about the POSSIBILITY of Iran getting ONE nuke? Iran’s “Air Force” has NO strategic capability (just like their military), Iran is SURROUNDED by nukes, Iran can not produce enough oil for its own citizens or military to threaten the US in ANY credible way. The ONLY legitimate threat Iran offers is ‘duping’ the US into another unneeded/unnecessary war that will only quicken our insolvency. Wait…we already are insolvent.
    This whole ‘we gotta do something about Iran’ theory is nothing more than war mongering from the NeoCons, for their businesses.

    BTW I have a fleet of radio control planes in my basement…does that count as an “Air Force”?

    1. Sadly, the world is run by politicians, Ian. Events often have a way of moving faster than the brains of these politicians. The purpose of my post was to point out the ramifications that a conflict with Iran may bring. Iranian politicians are not helping matters. Israel will do what it believes is in their best interest.

      You have your own fleet of drones? I’m impressed! 🙂

  11. Just wanted to add that I vetted Dr. Paul and his ‘nay’ vote on amendment 318. It makes complete sense why he voted no. If you want the answer I will tell you.

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