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alstry (36.01)

OIL- $300 per Barrel????

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June 02, 2008 – Comments (6)

I promise I don't make this stuff up.................

Will Israel Attack Iran’s Nuclear Facilities Before the End of the Bush Administration? Joschka Fischer Argues Yes Nouriel Roubini | Jun 2, 2008

I had the pleasure to meet and speak at length over the weekend with Joschka Fischer, former Foreign Minister of Germany and one of the deepest geo-strategic thinkers in the world. He argued with me that – as he fleshed out in a a recent article he wrote for the Project Syndicate – Israel will attack Iran’s nuclear facilities before the end of the Bush administration and that Israel effectively received the green light to this action from Bush during his recent visit to Israel. Fischer was recently in Israel to attend the celebrations for the 60th anniversary of Israel creation. A variety of factors and conversations – fleshed out in his article – have led him to the conclusion that Israel will attack Iran before the end of the Bush administration. This is just an opinion of one – however influential and well-connected – observer; but the arguments that Fischer makes on why Israel may go ahead sound compelling. We certainly don’t know if Israel will act that early – and certainly Israel has signaled that it will not accept an Iran that is nuclear - but let us consider the economic and financial consequences of such action.

First, even before Iran may try to retaliate to this action by trying to block the flow of oil from the Gulf, oil prices would spike above $200 dollar a barrel.

Second, Iran could react militarily to such Israeli action (that would be taken with the tacit support and the military logistic support of the US) by unleashing its supporters in Iraq against the US military forces there. That would trigger a military reaction by the US that would start a sustained air-led bombing campaign against Iran’s military capabilities (air force, anti-aircraft defenses, radar and other military installations, etc.)

Third, Iran would unleash its supporters in Lebanon and Gaza (Hezbollah and Hamas) in a military confrontation with Israel. A broader war will follow in the Middle East.

Fourth, Iran would use both the threat of blocking the flow of oil out of the Gulf and an actual sharp reduction of its exports of oil (an embargo) to spike the price of oil. Oil prices would rapidly rise above $200 per barrel and the US and global economy would spin into a severe stagflationary recession (like those triggered by the sharp spikes in the prices of oil following the staflationary shocks of the Yom Kippur war in 1973, the Iranian revolution in 1979 and the Iraqi invasion of Kuwait in 1990).

http://www.rgemonitor.com/roubini-monitor/252723/will-israel-attack-iran%e2%80%99s-nuclear-facilities-before-the-end-of-the-bush-administration-joschka-fischer-argues-yes/

I pass no commentary on the above one way or the other.  It is just simply something to be aware of.... whether others place weight impacting trading behavior is unknown.

6 Comments – Post Your Own

#1) On June 02, 2008 at 7:21 PM, LORDZPAIN wrote:

I think my previous post wasnt as scarey..  as yours

http://msncaps.fool.com/Blogs/ViewPost.aspx?bpid=58178&t=02006479449799869479

 

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#2) On June 02, 2008 at 7:46 PM, DemonDoug (55.37) wrote:

Oil is likely to hit 200/barrel by 2010 without any further wars in the middle east.  If this scenario plays out (and I don't think it will), oil would likely go to 500-1000/barrel.

I see no scenario where oil is a loser.  Only wish I'd jumped on the bandwagon a bit earlier, but there is still a lot of gravy left to ride on this train.

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#3) On June 02, 2008 at 8:56 PM, jester112358 (28.84) wrote:

I believe Isreal can and must take out Iranian nuclear facilities as they did to Iraq when it neared completion of a key reactor designed to produce weapons grade enriched uranium.  So, both history and the survival of Isreal make this a "likely" black swan event.  The question is when to do so.  They must wait until Iran has nearly completely its enrichment facilities to do the most damage.  This appears to be far off in time.  However, the election of dovish democrats might accelerate their time frame.

 Remember, Iranians were allies of Hitler during WWII and deny the holocast even took place.   They are very dangerous and can never be allowed to construct a nuclear weapon.  Economic consequeces are secondary in nature.

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#4) On June 02, 2008 at 9:57 PM, Zam77 (21.34) wrote:

Since when is Israel more advanced than the US? The US itself has come to aconclusion that bombing the nuclear facilities is a bad idea and one that will not end up being as successful as many believe. Iraq's nuclear facility cannot be compared to the intricate, under ground and hidden facilities that Iran has come up with.

I just dont see how Israel would do this, it makes absolutely no sense. I think Israel is a lot smarter, they will likely win over Iran with the next president that Iran elects, after all, the Iranians themselves dont hate Israel, bombing them would create eternal hatred from a country that has been friendly to Jews for centuries, and one that currently has the highest Jewish population as a percentage of its general population in the world. 

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#5) On June 02, 2008 at 11:38 PM, FleaBagger (28.69) wrote:

Iran doesn't have Hezbollah and Hamas on a leash, they just fund them. They can't control them any more than Saddam could have controlled Al-Qaida.

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#6) On June 03, 2008 at 3:54 AM, DemonDoug (55.37) wrote:

Israel confirmed that they bombed Syrian nuclear facilities that matched North Korean nuclear design schematics.

Incidentally, Syria didn't make a big stink about it, because they knew they were caught red-handed (the UN and the world knows what a N. Korean nuke facility looksl ike).

Iran has their own designs though, which will make things politically much tougher.

May you live in interesting times, eh? 

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