So far the Winner of the war is IRAN!

Connections ^ | May 30 | W. Pollock

[wepollock]

AS the battle for Iraq transitions to a guerilla "Infatada," Iran has at least for the moment emerged as the clear winner of the wider war.

The US remains under-strength in Iraq and the only reason the battle seams to have been won was dominance of enemy communication channels and the willingness of Iran to let the victory happen. Iran has positioned itself to take the reigns of leadership as a regional and nuclear power.

-From an Iranian perspective the stops have been pulled out to build a credible nuclear deterrent and we can expect that nation to leverage the expertise of both North Korea and Pakistan. The US may be in a race for time in terms of retaining the perception of superpower status as a hegemonic military and economic entity. The nuclear proliferation clock ticks quickly and relentlessly to confrontation.

-The religious leadership of Iran may not have growing domestic support however they are not losing control of that nation nor are they positioned for revolution. In fact Iranian leadership and influence extends beyond their boarders to many of the people of Iraq, Palestine, and Saudi Arabia. They are part of an emerging Islamic economic block.

-Iran has control of a major portion of productive oil supplies and it can choose to allocate these reserves selectively. Iran also has the ability to use the Straight of Hormuz as a choke point to restrict the flow of Oil from four nations. Currently oil inventory and capacity problems are pervasive.

-The US dollar and treasury instruments may very well be the next front in the battlefield. Jim Sinclair, a leader in the gold community states that, "With the US threatening to take action against another member of the "Axis of Evil" (Iran), the specter of Iran and its proxies letting loose with a blast of US Treasury instruments into the marketplace in the first quarter of a US election year looms large."

US dollars and debt are being issued at an astounding rate yet the velocity of money has been declining. This has resulted in a deflationary trend, which has been offset by inflation in captive goods/services and taxation. The result of this policy, and a war economy, will be economic stagnation.

Low levels of interest rates will prevail but net wealth, savings, and purchasing power will erode into sectors of inflation and net negative return on investments.

The economic battle between nations for survival may have begun because over the last three days Japan has been in a desperate struggle to support and strengthen the USD.

The Bank of Japan has been working to maintain the currency exchange rate of 120Yen to $1 USD. This exchange rate preserves the ability for Japan to sustain export subsidies, which are funded by debt, and thereby forestall economic collapse.

The productivity of Japan, the United States, and the European Union combined cannot fund the huge amounts of accumulated global debt.

Biding for time, the Bank of Japan discounted the implications of the war, which will accelerate the inability on the part of US to accumulate capital or sell its debt. Even without the war or Japanese intervention, the process of repatriation of international assets away from the United States was inevitable because of the misallocation of capital. Both these factors are accelerants to a pre-existing fire.

No doubt exists that the entire world is at war and that the most dangerous and desperate battles are yet to come. The next battlefronts will be fought with Iran, North Korea, Syria, within Iraq, with terror at home, and via the economics of oil and the US dollar.

[Cicero]

seams to have been won?

the reigns of leadership?

[KellyAdmirer]

The fellow makes a pretty good case for taking out Iran sooner rather than later....

[wepollock]

In a teleconference today with a physicist at a national research laboratory it was clear to me that Iranian uranium enrichment facilities pose a grave and present threat to the security of the United States.