US Economy A War Victim?

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Well, it looks like it’s going to be an interesting fall television season.  And no, I’m not talking about the presidential elections.

I am, however, talking about the ever more likely war brewing in the Middle East.  Of course, if you’re is Syria today, the war has already been brewed and is steaming hot in your coffee cup. It looks as if it will not be just another “Arab Spring” in Damascus, but rather, a magnet for the three great powers of the world to sow some really wild oats.

It looks like change is not through coming to the Middle East, and the potential for all kinds of disasters coming from it, including economic ones, is uncomfortably high.

The Syrian Challenge

The Russian Navy just pulled up to their base in Tartus, Syria.  They’ve brought some toys with them, too, and a bit of an attitude as the pledge to defend Syrian head honcho Assad.  Meanwhile, other countries are pulling their folks out of Syria. What do they know, one wonders?

In the mean time, the US, which has 4 carrier battle groups in the area, has said it will step in to the Syrian war if the Syrian government forces use chemical weapons; which they surely could.  The US would like to see the “rebels”-–whoever they are—replace the current regime in Syria.

But guess who doesn’t like that idea, besides the Russians, Syrians, and Iranians? That’s right; the Chinese.  Our biggest foreign moneylenders have warned the US not to intervene, at the cost of…what?

I don’t know.  Maybe stop lending money to us?  Now that would be a threat.  Other than a nuclear strike on American soil, destruction of the dollar would be the most crippling blow to American power.  It’s well along the way to happening anyway, but the Chinese could certainly fast track it if push comes to shove.  And all the while, the Iranians are backing the Syrian regime with men and arms.

Not a positive situation in the least for the world at large, or for the health of the US economy, either.

Another war would make an already fragile US economy a lot worse.  We’ve already seen a sharp rise in food prices due to the drought conditions in the US.  At the same time, fuel prices have almost doubled in the past four years, and face another fiscal cliff by year’s end.  It might be longer fall from it than we think.  Barring a peaceful solution appearing out of nowhere, however, the economy might just get a lot worse very soon.

What would $10 a gallon gas do to the economy?  How about another oil shortage?  Or how about a food shortage, too, and inflation thrown in just because?  What would all that do to the economy?  Long gas lines?  Skyrocketing food prices?  Rationing? Millions more of Americans on welfare?  They’re all possible outcomes as soon as this fall.

And it’s not just because of the street fight going on in Syria...

The Tehran Calculus  

Unfortunately, a conflict between Iran and Israel also looks more likely every day.  Of course, the increasingly aggressive and vile rhetoric of Iranian leaders towards Israel doesn’t help matters.  Iranian head clerics are calling for more terrorist attacks on the West, while Iranian president Ahmadinejad has sworn to “wipe Israel off the map.”  Again.

And, you might be wondering, just how would Iran do that?  With their peaceful nuclear energy program would be my bet

That’s why it should surprise no one that Israeli TV reports that Prime Minister Benjamin Netanyahu has already decided to attack Iran’s nuclear factories soon…as in October.  Think an Israeli strike on Iran will go unanswered?

Me neither.

Iran is all about slamming the door in the Strait of Hormuz.  That would not only put the hurt on the world’s oil supplies, but would also shoot oil prices much higher than they already are.  That would hurt the US and the West and help both Iran and Russia.  Like Iran, Russia has tons of oil and needs the cash.

And, just to complicate matters, the now-ruling Islamic Brotherhood of Egypt just kicked out the moderate generals running the Egyptian Army.  Yeah…another piece of bad news for sanity.  And what was the Islamic Brotherhood’s first move after kicking the generals out? Moving Egyptian tank into the Sinai…towards Israel.

Israel has kindly asked the Brothers in Cairo to valet their tanks elsewhere, since their presence is provocative, dangerous, destabilizing, and incidentally, against the peace treaty that they both signed.  So far, though, no such brotherly love is coming out of Cairo.  Seems the Mohammad Boys are itching to break the peace treaty with Israel; why not do so with tanks pointing at Jerusalem?

Again, a conflict between Israel and Egypt would also likely involve the US.  It is conceivable that Israel—and the US—may be involved in another war with multiple adversaries all at once, all located in or around Israel.  How much men and material would it take for the US to back the rebels in Syria and defend Israel against Iran, Russia, China and Iran?  This would have tremendous impact on our economy almost immediately and for possibly the long term.

Wars, after all, are ultimately, how the world rearranges itself.  When that happens, the price in lives and in ways of life, as we saw in the 20^th century, can be very high for everyone.

And those are…The Gorrie Details.

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2 Comments

1. 

   Rich Bauer

   August 22, 2012 at 9:58 pm

   i look forward to The Gorrie Details every day. Your insight that you you bring to the table on a daily basis sets my compass.

   Reply
   • 

     James R. Gorrie

     August 24, 2012 at 11:40 am

     Thanks, Rich. Sometimes true north is difficult to see when the storm is rising. JRG

     Reply