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?