Some blog posts I write on a Sunday afternoon can wait until Monday morning, and then there are those that cannot. This post falls into the latter category.
I have, for a long time, been suggesting that the moment will arrive when the economy might tip into outright recession, and even potential depression, because of the failure of stock markets in reaction to what is happening in the real world all around us.
So far, the ability of those in stock markets to delude themselves that the consequences of financial engineering, which, through the process of financialisation, is continuing to give the impression of ongoing prosperity amongst major US tech companies, has prevented this. But illusions always shatter, and most serious commentators have agreed that this must be the case since late last year, and I got there somewhat earlier.
Why, then, post this now? That is because it is always an external shock that creates a crisis, and such a shock is developing now.
There is no one who can pretend that the actions that Israel and the USA are taking in attacking Iran can be legally justified.
The Iranians might be toxic, oppressive, and clearly abusive of human rights at many levels within that country, but this has never provided a legal justification for war, and it has not now. The reason for that is quite simple. There has never been an occasion when bombing from afar has created good outcomes in the country being bombed. The evidence from Afghanistan, Libya, Syria, Lebanon, and so many other countries provides proof of that.
Of equal importance, the economic shock from this war is going to be very real. If the Straits of Hormuz are closed, and if there is an impact as a consequence on shipping through the Suez Canal, which is entirely possible, then basic oil flows will be seriously disrupted. So, too, could other supply chains. And what we know is that this will have major consequences. Let us just look at some of those.
If China cannot get its oil from the Middle East, it will buy it from Russia. That might perpetuate war in Ukraine.
Like it or not, Russian oil is already leaking into European markets. This, then, will have an impact here, as will the direct effect.
In the Americas, Trump's efforts against Venezuela are bound to become more aggressive.
Whatever the effect on domestic economies, whether mitigated or exaggerated by central bankers (and who knows what they will do), the consequences will be enormous in the UK and many other countries.
On top of all that, Iran has shown that if the US and its allies attack it, it will defend itself, and the myths of supposed security in Dubai, Bahrain, and other countries collapsed in moments as a consequence.
There has, this weekend, been a massive and toxic shock to the world's rules-based order on which we have all been dependent, but for which neither Netanyahu nor Trump has shown any regard, in both cases because of their fear of being exposed as the people they really are, with all the consequences that might flow from that.
So why does this matter this Sunday afternoon, in particular? That is for a glaringly obvious reason: the fallout from this could well be the shock that sends stock markets tumoring in the morning.
If they do fall, or even crash, the response would be entirely logical.
What is more, precisely because of the massive uncertainties surrounding the events that have happened, and the massive range of uncertainties about what might happen yet, to maintain prices at their current levels would be absurd if anyone is to continue to believe that these markets have any relationship to reality. They will either crash then, or it will become ever more apparent that the prices within them are so absurd that anyone with sense should stay clear of them. The outcome is profoundly negative, and the risk of spillover into the real economy is incredibly high, whichever way this is looked at.
And what I think has to be said this time, which makes it different from previous attacks, is that the likelihood that this situation will resolve in days, with all parties walking away with excuses in place, is remote in the extreme. You cannot take out the Iranian president and expect there to be no continuing reaction. To think that might be possible is just naive, in the extreme.
My suggestion in that case is quite straightforward. Watch what happens tomorrow morning with extreme nervousness. This might be the tipping point. Corruption, corrupt Zionism, and deranged world leaders whose appeal is based on fascism might have serious consequences.
More than ever, we need a politics of care and an economics of hope.
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You are absolutely correct that this will not be over in days; it could be months, even years. Russia has been pounding Ukraine from the air for over four years without gaining any territory. Granted they are gaining ground in Donetsk, but very gradually. Iran have a lot of weapons and a huge army to deploy, not to mention satellite groups like Hezbollah, Hamas, Routes and Syrians. They also have sleeper groups all over the place. The result will be years of attrition against the West and their economies.
Iran is a despicable regime and Ayatollah Khamenei was clearly a despicable person. No both sidesism or balance is warranted about that.
However, “Don’t start something if you don’t know how it’s going to finish” has always been sound advice.
“It’s over to you now” seems to be the extent of the US plan, which I say deliberately, not a US/Israel plan, because the IDF couldn’t operate at the level it does without US money and weaponry.
One thing: the Supreme Leader, rather than the president, was killed. As far as I’m aware, the president is still alive.
Sorry…
And thanks
Though the former president Ahmadinejad was killed, which I didn’t realise until after my earlier message.
There are at least 30 people on social media who have more credentials than I to comment on war, foreign policy, Donald Trump, history, law, and forecasting. I have one small contribution. I was raised in a political house in D.C. I believe I read Donald Trump like a dirty book.
The war has indeed got purposes. The intents are to install Israel/USA and Gulf state allies as a military planetary hegemon, by controlling the Strait of Hormuz, thus controlling the shipping of oil and trade; to install another puppet government in Iran; to thereby surround all of inner Asia militarily; to marginalize and trivialize NATO; and to impose a Christo-Judean fascist state on the planet.
Iran is a big prize, with a lot of oil. Our Gulf allies are not nice people – recall the Khashoggi murder – and they have paid off the historically corrupt Trump family with lucrative contracts, an airplane we taxpayers have bought, and god knows what else. There is no goal of Iranian self-determination. Iranian democracy threatens the actual goal: regime replacement favorable to purchasers of U.S. policy. United Arab Emirates investments and Saudi and Qatari gifts bought this war, as did the mission to turn Israel, the US, and their allies into the Asian hegemon.
I really do not think they well get what they want.
I don’t think Trump and his co-conspirators will prevail either. These are not well laid plans, and the best-laid plans gang aft aglae. Our concern is the regional and global disasters being wrought, including stock market disasters, as you point out.
We agree…
I really hope you’re wrong about oil shocks. The main reason has to be the adverse effect on people without the financial means to weather the storm as well as the poor Ukrainians and Palestinians yes and Iranians who surely have suffered enough. There’s also another issue which it seems insensitive to mention against the background of so much potential human anguish. The Politics of Care narrative has not yet spread widely enough for it to vie with the failed and corrupting narrative of the politics of destruction. After yesterdays conference the attendees went away enthused and equipped to contribute to changing the story we as a nation tell ourselves of what sort of society is worth living in and how we can make it happen. But that change will take time. If a potentially disastrous economic event is needed to finally bring the Politics of Care to the forefront of the national consciousness (and I really hope against hope it does not) then the one potentially set in train by a pair of war criminals in recent days is too soon. As things are, the ruinous response will inevitably be more austerity.
Thanks, Greg.
A brilliant exemplar of a thought-through analysis from a well-informed and properly critical commentator, with a prospective remedy for the god-awful situation we are all in. (That`s you, Kier.) Sincere thanks also for all your other hard work.
Thanks, Paul.
Today, President Donald Trump warned Iran that if it continues to retaliate against recent US-Israeli strikes, it would be hit with “a force that has never been seen before”. To date, the use of atomic bombs on Hiroshima and Nagasaki in 1945 remains the greatest single-point application of destructive force in history. What is Trump threatening? Economic meltdown might not be our main concern. With Trump in the White House, nothing is unthinkable.
And because it is one of the unspoken reasons this war is being waged by Trump at this particular time, it must be mentioned here: EPSTEIN
This cynical and criminal enterprise also allows Netanyahu more time to avoid answering the criminal charges that await him when he loses power.
We must not let them get away with this. Say it again and again EPSTEIN EPSTEIN EPSTEIN.
Correct
109 likes – thats impressive