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Conflict with Iran is no joke

By Staff | Jun 18, 2019

There is a joke that goes something like: “The stock market is crashing on the announcement by NASA that an extinction size asteroid had been tracked on a collision course with the earth in a few days, but rebounded 400 points late session on a 25 percent increase in APPLE earnings.”

That is not a lot different than how the market traded recently on news that the trade war with China was being ramped up with more tariffs, the Chinese vowed to retaliate as the Chinese negotiator had left the talks early and then the market rebounded late session on a tweet by Donald J. Trump (DJT) that he was ‘optimistic’. That actually is pretty hilarious.

We have never traded asteroids or trade wars before or a president that tweets his every other thought. The Chinese Vice Premier Lui He was not here to negotiate because Beijing did not give him envoy status to do so. He was here to confirm that the work done on a deal was off, to express Chinese interest to keep negotiations going with an invitation to resume talks in Beijing. He also conveyed their regret that they would have to respond with ‘countermeasures’ to new tariffs. They say that they did not backtrack on work done on the deal that DJT used as his reason for imposing the new tariffs.

Who knows what is true? As noted, there are many White House trade hardliners that believe this is the opportunity to take China down. Steve Bannon says that China is the greatest existential threat to the U.S. in our history. They see China not as a trading partner but as an enemy. I think that is absurd but Trump appears to have bought into that. They see China having blown up a debt bubble in order to sustain their economic growth at an unsustainable level and they would like to be the pin that pops it. I don’t see anything in history that backs up their contention that China is a belligerent power with a goal of hegemony of the world. That appears to be more DJT’s gig.

Our navy is ten times larger than any other in the world, the next two Navies of size are Japan and the UK, which used to be allies, and we are building more Ford-class carriers. I have no idea what for. One of these carrier battle groups, along with offensive airwings, was moving to the Persian Gulf region pre-positioning in case Iran responds to the attack on its economy ordered by DJT. How is history going to record this one for the 10th-graders in 2025?

There was a multi-party agreement by Iran not to develop nuclear weapons that was the official deal agreed to by President Obama. Our people confirmed that Iran was abiding by the terms of the arrangement which had years to go. DJT doesn’t like the deal for many reasons that appear to be personal, ignored the confirmation by U.S. intelligence services that Iran was complying and unilaterally withdrew the US from the accord, breaking the deal.

Then the President orders economic sanctions in the form of an embargo on Iranian oil exports. Anyone in the world buying Iranian oil cannot do business with the U.S. or use the SWIFT system of money exchange for global commerce. He initially gave China, Turkey, Japan, India and South Korea waivers from the sanctions for a period of time essentially to give them time to prepare…which was nice of him. Those waivers have expired so the nice is over, the sanctions are now in force, they have been extended to Iranian metals and they are crushing the Iranian economy.

Israel and Saudi Arabia, which both hate Iran for different reasons, are allied with the president hoping like everything that Iran does something militarily stupid so they can all pile on and finish militarily what the economic attack on Iran started. The Revolutionary Guard in Iran are real bad guys. I don’t know if the Saudis are good or not, actually they are not that good, but they would fill a vacuum created by the destruction of Iranian influence in the region (along with Russia).

Donald has no intention of staying there unless he can take the oil of course. He would like to take them down and then make them pay for it. Exactly what he wants as a remedy from Iran, short of the resignation of the current regime, is rather vague. They had already agreed not to develop nuclear weapons and had complied with that. They do spread instability in the region but there is no chance they will stop. That would mean that the only solution is their entire destruction and the trade embargo is just the first salvo constituting a declaration of war on Iran. What instance in history can you find when one country blockades the trade of another that was not a war…real war.

It is war. Iran announced that it felt compelled under the sanctions being applied despite their adherence to the accord, to end compliance and begin the first steps of nuclear weapons development. White House National Security Advisor John Bolton would have been giddy happy over that. Iran took the bait. Now we can legitimately declare that they have violated the accord justifying what we had already done and any future actions taken.

This is no joke. I have stared the chronology of how the history will be written but we should all stay on the edge of our seats to see how this comes out.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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