13 August 2012
Norman Pagett writes
If Israel bombs Iran, there is a danger that the world economy will shut down
If Israel bombs Iran, then the mullahs have nothing to lose, they will lash out in one desperate attempt to bring down the house of cards that is the global economy. The politics and economy of the world functions on the guaranteed smooth flow of world oil supply, a third of which comes through the strait of Hormuz. If it is interrupted, the result will be a trebling (at least) of oil prices. Iran doesn’t need to ‘close’ the strait of Hormuz, just sinking one tanker will send world industry into meltdown; the shipping insurance companies will see to that. when that happens, oil markets will panic and users will start buying and hoarding. There are no sources of supply that can be fed into the system to make up the Saudi shortfall. That will shut down world transport systems, and 99% of your food moves by truck. Any attempt at military retaliation by the US military will engulf the entire region. The military hardware of Iran will be unleashed in every direction and they won’t care who it drops on. That will shut the oilfields of Saudi, Kuwait, Iraq and Iran and the ‘stable’ dictators of the region will collapse as their regimes implode after the oil revenues stop and various religious factions begin to fight over what’s left. (Saudi money has value only so long as the oil keeps flowing, most of the oil exporters use revenue to buy food, military hardware and escape pods conveniently situated in the ritzier parts of London, plus a few billions passed around to buy off disaffected unemployable youth.) When the Saudi oilflow stops the Saudis go back to being camel traders and goat herders. Which is what they were 100 years ago.
Iran is a basket case already and has nothing to lose, the west has everything to lose. The mullahs of Iran may be anathema to western sensitivities, but driving their economy into the ground will make mad dogs even madder, liable to any form of action, no matter how self-destructive that may be.