Baltic Dry Index. 907 -69 Brent Crude 68.60 Spot
Gold 1552
Never ending Brexit now January 31.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October
18. Now in effect.
Older men declare war. But it is the youth that must fight and
die.
Herbert Hoover
This weekend the world stands on the brink
of a new Middle East war. How will Iran respond to America’s assassination of
their top General, and a man widely tipped to become President of Iran in the
future?
Of course, Iran has the option of not
responding at all, although few regional experts expect Iran to take that
option. However, we may have to wait some time for a response. Revenge is a
dish best served cold.
But a war between Iran and the USA and
its regional allies, is a complete mismatch, with only one outcome, but at what
cost? Is an American President facing impeachment and re-election in November,
really about to commit US troops to invade Iran? How many and for how long?
In extremis, it risks setting off a war
from Israel-Lebanon, through Syria and Iraq, and reigniting war in Afghanistan. In
extremis, taking the war into Kuwait and Saudi Arabia, with disastrous consequences
for global oil pricing.
Below, a very bad start to the roaring
20s.
It is forbidden to kill; therefore all murderers are punished
unless they kill in large numbers and to the sound of trumpets.
Voltaire
U.S. killing of Iran's second most powerful man risks regional conflagration
January 3, 2020 / 6:10 PM
BEIRUT (Reuters) - The U.S. killing of
Qassem Soleimani, Iran’s most powerful figure after its supreme leader, is seen
by Tehran as an act of war that risks regional conflagration.
By ordering
Friday’s air strike on the commander of the Iranian Revolutionary Guard’s
foreign legions, President Donald Trump has taken the United States and its
allies into uncharted territory in its confrontation with Iran and its proxy
militias across the region.
The Iranian
leadership may bide its time.
But most
analysts believe this blow to its prestige, plus Supreme Leader Ayatollah Ali
Khamanei’s personal commitment to Soleimani and his campaign to forge an axis
of Shi’ite paramilitary power across the Levant and into the Gulf, means
Iranian reprisals will be lethal.
It risks a
slide into direct conflict with the United States that could engulf the whole
region.
“The direct
assassination of Soleimani by the United States is a naked challenge and Iran
has to carry out a major face-saving act to respond,” said Mohanad Hage Ali, a
fellow at the Carnegie Middle East Center in Beirut. “This is not the end of
it.”
Soleimani,
who made his name in Iran’s war with Iraq in the 1980s, rose in 1998 to command
the Quds Force, the overseas arm of Iran’s Revolutionary Guard Corps (IRGC).
After the
U.S.-led invasion of Iraq in 2003 toppled Saddam Hussein’s Sunni rule and
brought Iraq’s Shi’ite majority to power, the Quds Force built up a powerful
array of proxy militias to harry the U.S. occupation.
They were
modelled on Hezbollah, the Shi’ite paramilitary force Iran created in Lebanon –
but in Iraq they were four times bigger.
When Syria
was plunged into war by the Sunni rebellion that started in 2011, Soleimani
mobilised Hezbollah and Iraqi Shi’ite militias to save President Bashar
al-Assad and establish a new Quds fortress.
---- In Iraq, the Popular Mobilisation Forces, the 100,000-strong paramilitary alliance at the sharp end of the power struggle between Iran and the United States, may have over-reached.
At the
instigation of Soleimani and the Quds Force, PMF units have stepped up
harassment of U.S. troops in Iraq.
But the killing
of an American contractor at a base in northern Iraq attacked by the Kataib
Hezbollah militia last week prompted U.S. air strikes that killed 25
pro-Iranian fighters.
In response,
the militias laid siege to the U.S. embassy in Baghdad, breaking through the
perimeter before withdrawing.
That
reminder of the occupation of the U.S. embassy in Tehran in 1979 – a
humiliation Americans have never forgiven – may have prompted Trump, facing
re-election as well as impeachment this year, to sign Soleimani’s death
warrant.
---- After the elimination of Soleimani, Iran is expected to double down in Iraq, Lebanon, Syria and Yemen on what it regards as its forward lines of defence against a U.S.-led attempt to encircle it with the help of Israel and Saudi Arabia.
Iran has
already given examples of how it can respond.
After the
Trump administration withdrew from the nuclear deal Iran signed with the United
States and other world powers in 2015, the IRGC and its proxies progressed from
limited attacks on oil tankers in the Gulf to spectacular missile and drone
assaults on Saudi oil installations.
---- Analysts now see a multi-pronged Iranian response against the United States and its allies as certain.
Already the
Soleimani killing has united otherwise fractious Iraqi Shi’ite groups in
demanding U.S. forces quit Iraq.
A senior
official in the Iranian-led regional military alliance said: “When the
Americans take this deliberate decision to kill Soleimani it means they have
taken a decision for war.”
“There will
not be a quick revenge,” said Carnegie’s Hage Ali. “Even in a situation like
this they are cold, they consider their options and then they react. It will
take time but all options are on the table.”
More
Trump's Declaration of War Conflict with Iran Could Be Inevitable after Killing of General
U.S. President Donald Trump has repeatedly insisted he does not want war with Iran. Now, with the killing of General Qassem Soleimani, that conflict could be inevitable. It is the price for instinctual foreign policy devoid of experts.
January
03, 2020 05:03 PM
He wanted to do everything differently,
using deals instead of alliances, pressure instead of strategy. Even among
Donald Trump's critics, there were many who long thought it might be a bad way
to approach foreign policy. After all, preceding U.S. presidents had all
struggled for years to find solutions to the same set of apparently insoluble
crises: Afghanistan, Iran, North Korea.
Donald Trump made a complete break with traditional U.S. foreign policy. He got rid of the experts in the State Department and discarded the tools of diplomacy --negotiations, trade-offs and the weighing of interests. The guiding principle was "disruption." Trump claimed that he could solve conflicts purely with his charisma and his imagination. After all, didn't the tech companies in Silicon Valley likewise remodel the world with their innovations?
Now, though, the failure of Trump's approach has become obvious to all. Disruption might be a model appropriate for Google and Facebook, but not for global politics.
On Tuesday, Shiite militiamen attacked the U.S. Embassy in Baghdad, likely at the behest of Iran, and the ambassador had to be evacuated along with embassy staff. On Thursday night, the U.S. responded by killing the commander of the Iranian Quds Force, Qassem Soleimani, in a missile strike in Baghdad. Soleimani was considered to be the second-most powerful man in Iran and his assassination is nothing short of a declaration of war. At almost the exact same time, North Korean dictator Kim Jong Un threatened to carry out new nuclear weapons tests. Two crises that Trump had promised to contain have now become more acute and threatening than they had been for some time.
The killing of Soleimani is the epitome of Trump's capriciousness. The ploy of unexpectly changing directions, of making threats and surprise attacks has not managed to extricate the U.S. from the Iraq-Iran-Syria quagmire. Washington has continued to be dragged into conflicts in the Middle East. Ever since the U.S., under Trump's leadership, backed out of the nuclear deal with Iran, Tehran has changed course. It has responded to the Trump administration's strategy of "maximum pressure" with provocations, for example by attacking American facilities in the Middle East. The Iranian regime had hoped the approach might force the Trump administration back to the negotiating table.
Now it looks
as though the reciprocal attacks could lead to catastrophe. The U.S. killing of
Tehran's most important general, a man celebrated by the regime as a kind of
folk hero and revolutionary freedom fighter, marks the continuation of this
confrontation. It is a dramatic, shocking move that Tehran can hardly leave
unanswered. Trump has said he isn't interested in war, but his course of action
is heading toward exactly that.
That is the
greatest danger currently facing the world, but it isn't the only potentially
dangerous consequence of Trump's instinctual foreign policy. North Korea's Kim
Jong Un also remains unpredictable. For a brief moment, it looked as though he
might respond positively to Trump's personal approaches and scale back his
nuclear program in exchange for economic concessions. Since his bellicose New
Year's address, however, in which he directly threatened America, it has become
clearer than ever that the Bomb is more important to Kim than economic
relations with the U.S.
More
From war to diplomacy, Iran weighs response to Soleimani's killing
January 3, 2020 / 7:55 PM
DUBAI (Reuters) - Tensions between Iran
and the United States are at their highest point since Iranian students seized
the U.S. Embassy in Tehran in 1979.
Iran's clerical and military rulers have threatened revenge for an American air strike here at Baghdad airport on Friday that killed Qassem Soleimani, commander of Iran's elite Revolutionary Guards Quds Force and architect of its growing military influence in the Middle East.
Here are some of Iran’s options:
MILITARY POWER
Iranian Supreme Leader Ayatollah Ali Khamenei and U.S. President Donald Trump have talked tough during several crisis but neither have indicated an interest in all-out war.But the possibility of a military confrontation cannot be ruled out. Khamenei faces a dilemma.
If he calls for restraint, he could look weak at home and among proxies who have expanded Iran’s reach. For this reason, Iran may choose to opt for a smaller scale retaliation.
Karim Sadjadpour, senior fellow at the Carnegie Endowment for International Peace said on Twitter that Khamenei must carefully calibrate the reaction. “A weak response risks losing face, an excessive response risks losing his head. Khamenei is Trump’s most consequential international adversary in 2020.”
According to a U.S. Defence Intelligence Agency (DIA) report in December, Iran’s military power relies on three core capabilities: its ballistic missile programme, naval forces that can threaten navigation in the oil-rich Gulf and its militia proxies in countries such as Syria, Iraq and Lebanon.
Iran says it has precision-guided missiles, cruise missiles and armed drones capable of hitting U.S. military bases in the Gulf, and reaching Tehran’s arch-enemy Israel, a U.S. ally. Iran’s homemade Shahab ballistic missiles with a range of 2,000 km (1,200 miles) can carry several warheads.
In retaliation for the killing of Soleimani, Tehran or its proxies could attack oil tankers in the Gulf and Red Sea, a major global shipping route for oil and other trade, linking the Indian Ocean with the Mediterranean via the Suez Canal.
---- Iran is unlikely to rush into action, according to Ali Alfoneh, senior fellow at the Arab Gulf States Institute in Washington.
“Iran has no choice but to strike back and retaliate assassination of Major General Suleimani,” he said. “But the Islamic Republic is patient and the timing and nature of that strike is not yet known to us.”
IRAN’S LONG REACH
Iran and its allies have proven they have a long reach.In 1994, an Iran-backed Hezbollah member drove a van filled with explosives to the Argentine Jewish Mutual Aid Society (AMIA) building, killing 85 people. Argentina blames Iran and Hezbollah for the attack. Both deny any responsibility.
Argentina also blames Hezbollah for an attack on the Israeli embassy in Buenos Aires in 1992 that killed 29 people.
---- DIPLOMACY NOT CONFRONTATION
Iranian leaders have in the past kept the door open to diplomacy to achieve its aims, especially when its economy is squeezed hard by U.S. sanctions designed to weaken the leadership.“Iran and America have worked together in the past, in Afghanistan, Iraq and other places. They have common interests and common enemies. A military confrontation will be costly for both sides. But diplomacy can solve many problems and it is an option,” said a senior regional diplomat.
Iran has ruled out any talks with the United States unless it returns to a 2015 nuclear deal and lifts all sanctions it reimposed on Tehran after exiting the pact in 2018. Signalling that the door was open for diplomacy, U.S. Secretary of State Mike Pompeo said after Soleimani’s killing that Washington was committed to reducing tensions in the region.
“While many are predicting WWIII, the last 40 years of Iran’s history reflect that what’s paramount for the Islamic Republic is its survival. Tehran can ill-afford a full-blown war with the U.S. while facing onerous economic sanctions and internal tumult, especially without Soleimani,” Sadjadpour said.
https://uk.reuters.com/article/uk-iraq-security-blast-scenarios/from-war-to-diplomacy-iran-weighs-response-to-soleimanis-killing-idUKKBN1Z221P?il=0
And so we wait. What will next week bring?
Finally, on this day in 871, the Danes
routed the West Saxons in Reading, where I live. You can’t move anywhere around
here without running into history.
Battle of Reading (871)
The Battle of Reading was a victory for a Danish Viking army over a West Saxon force on about 4 January 871 at Reading in Berkshire. The Vikings were led by Bagsecg and Halfdan Ragnarsson and the West Saxons by King Æthelred and his brother, the future King Alfred the Great. It was the second of a series of battles that took place following an invasion of Wessex by the Danish army in December 870.[1]By 870, the Vikings had conquered two of the four Anglo-Saxon kingdoms, Northumbria and East Anglia. At the end of 870 they launched an attempt to conquer Wessex and marched from East Anglia to Reading, arriving on about 28 December. The town was between the Thames and Kennet rivers and they set about building a ditch and rampart on the southern side between the two rivers. Three days after their arrival they sent out a large foraging party, which was defeated by an army of local levies under the command of Æthelwulf, Ealdorman of Berkshire, at the Battle of Englefield.[2]
After another four days, on about 4 January 871, Æthelred and Alfred brought up the main West Saxon army and joined Æthelwulf's forces for an attack on the Danes. The West Saxons fought their way to the town, slaughtering all the Danes they found outside, but when they reached the town gate the Vikings burst out and defeated the West Saxons with a successful counter-attack. Among the dead was Æthelwulf, whose body was secretly carried off to be buried in his native Derby. According to a late source, Æthelred and Alfred only escaped due their better knowledge of the local terrain, which allowed them to lose their pursuers by fording the River Loddon.[3]
More
Still were it to repeat today, Ethelred
and Alfred might have a hard time fording the River Loddon which, though
receding, is still in flood. Note, despite the battle’s result, this Ethelred
(the first,) is not the “Ethelred the unready,” of later history fame, (the
second.)
This weekend’s musical diversion. The Italian
born, French composer, Jean-Baptiste Lully.
Lully - Fanfare pour le Carrousel Royal
Jean-Baptiste Lully
The supreme art of war is to subdue the enemy without fighting.
Sun Tzu
The monthly Coppock Indicators finished December
DJIA: 28,538
+91 Up. NASDAQ: 8,973 +125 Up. SP500: 3,231 +114 Up.
All higher again, but it’s not a buy signal I would take. The rally is
all down to the Fed monetizing at a rate of about 100 billion a month. I
continue to look on the Fed’s latest stock bubble as an exit rally.
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