US Fed And Military-Industrial Complex: War With Iran Could Crash Entire World Economy
With tensions in the Persian Gulf reaching a point of no return, the two most important power groups in the United States, the Fed and the military-industrial complex, both face problems that threaten to weaken Washington’s status as a world superpower, says an article published by Strategic Culture Organisation.
“As foolish as it may seem, a war on Iran could be the perfect option that satisfies all power groups in the United States. The hawks would finally have their war against Tehran, the world economy would sink, and the blame would fall entirely on Trump.”
But it said that Iran’s capabilities to shot down an advanced drone have surprised the US officials.
Citing the a huge debt problem faced by the US dollar-based economy, it said, “The central bank of central banks, the Bank for International Settlements, an entity hardly known to most people, has stated in writing that ‘the outstanding notional amount of derivative contracts is 542 trillion dollars’. The total combined GDP of all the countries of the world is around 75 trillion dollars.”
It mentions the Germany’s Deutsche Bank which has assets worth about 40 trillion dollars in derivatives, or more than half of annual global GDP.
“Their solution, not at all innovative or effective, has been to create yet another bad bank into which to pour at least 50 billion dollars of long-term assets, which are clearly toxic.”
“Deutsche Bank is full of toxic bonds and inflated debts kept alive through the flow of quantitative easing (QE) money from the European Central Bank, the Fed and the Japanese Central Bank. Without QE, the entire Western world economy would have fallen into recession with a chain of bubbles bursting, such as in public and private debt.”
Amid this scenario, the article said, there is no rescue plan for the US dollar, its status as a global-reserve currency, and by extension of US hegemony.
“There could not be one because the next financial crisis will undoubtedly wipe out the US dollar as a global reserve currency, ending US hegemony financed by unlimited spending power. All countries possessing a modicum of foresight are in the process of de-dollarizing their economies and are converting strategic reserves from US or US-dollar government bonds to primary commodities like gold.”
On the other hand, the risk of a war of aggression against Iran by the Saudi-Israeli-US axis would have little chance of success but probably succeed in permanently devastating the global economy as a result of a surge in oil prices.
“Upon closer examination, it becomes apparent that the actions of Bolton and Pompeo seem to be aligned in prolonging the United States’ unipolar moment, continuing to issue diktats to other countries and failing to recognize the multipolar reality we live in. Their policies and actions are accelerating the dispersal of power away from the US and towards other great powers like Russia and China, both of which also have enormous influence in the Persian Gulf.”
The article said, “Trump is in danger of being crushed between a Fed that sees the US dollar’s role as the world’s reserve currency collapse, and the need for the Fed to blame someone not linked to the real causes of the collapse, that is to say, the monetary policies adopted through QE to prolong the post-crisis economic agony of 2008.”
At the same time, with Trump as president, the neocon-Israeli-Saudi supporters see a unique opportunity to strike Iran, a desire that has remained unchanged for 40 years.
While unable to live up to his electoral promises, Trump seems to be aware that the path laid out for him in the event of an attack on Iran would lead to his political destruction and probably to a conflict that is militarily unsustainable for the US and especially its Saudi and Israeli allies. It would also be the catalyst for the collapse of the world economy.
But in trying to pressure Iran into new negotiations, Trump runs the risk of putting too much pressure on Tehran and giving too much of a free hand to the provocations of Pompeo and Bolton that could end up triggering a war in the Strait of Hormuz.
The article widely quotes from StrategicCulture.