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February 04, 2006


So far, Iran is not blinking.

I'd go further than saying Iran is not blinking. I suspect Iran has ducks in a row that we're not considering and it is deliberately provoking. That may just be because it perceives (rightly) that the US is weak right now so if it has to face a confrontation with the US, better to do it before it withdraws its 130,000 hostages. Better to do it before the Sunnis get some leverage in Iraq. Do it at a time when the US' finances are on incredibly weak ground. Do it before the US provokes something with Venezuela, who will almost certainly be an ally of Iran if things go haywire and might well be willing to anatagonize the US.

Anyway, here are a few more discoveries I've made in the last few days. The CIA now blames the Khobar towers bombing in Saudi Arabia on Iranian-backed terrorists, not on Al Qaeda (apparently, this has been out there; it's something Richard Clarke talks about, but it's not something publicly discussed). That means Iran has the ability to strike within Saudi Arabia, something we've always suspected, but particularly feared given that the population of the Saudi oil fields is predominantly Shiite.

Also, I've been doing some research into more of the Iraqi scientists wrt my Obeidi stuff. And it turns out that Iran was getting defectors during the 1990s (or at least trying), in addition to the US. Both the US and Iran tried to get assist Nassir Hindawi, the originator of Iraq's anthrax program, to defect in 1998, but Saddam sniffed it out and jailed Hindawi. Well, Hindawi is one of the scientists who "got protection" from Chalabi. He doesn't show up, by name, in the Duelfer report. Nor have I found any record of him since. Given that we've never ascertained precisely the relationship between INC and Iran (besides the fact that Aras Karem, INC's intelligence head, was very friendly to Iran), what does that say about all the stuff INC has been doing? Though, given the fact that Iran didn't end up giving Chalabi any support in the last election, this may all be in the past.

Then add in the Risen news that we lost our entire network of assets in Iran (though I gotta say, it sounds more like the Iranian double agent involved helped that along).

That says we have no clue of what Iran might be planning.

Most people explain Iran's actions as a natural, universally supported attempt to get nukes, as if it is a response to Iranian nationalism. But, given how much evidence there is that Iran happily lured us to Iraq, why aren't we considering that they're deliberately provoking this confrontation? Why aren't people asking what we don't know about iran?

One more, probably unrelated item (although maybe they are related). Hamas has taken a predictable, but equally confrontational stance regarding money both from the international community and from Israeli taxes. They CAN'T live without money, there's no economy in Gaza. So what is their plan? Again, I don't see people asking WHY Hamas seems so comfortable taking such an intransigent stance.

Background: Israeli Nuclear Forces: 2002

Estimates of the Israeli nuclear arsenal range from 75--200 weapons, comprising bombs, missile warheads, and possibly non-strategic (tactical) weapons.

Just one is enough, of course. This is all very scary.

According to some, the U.S. network of intelligence assets was rolled three separate times over the past nine years.

Yup, I've heard three times too. And we're confident we know how Iran is going to respond?

And we're confident we know how Iran is going to respond?

heck, I'm confident about how Iran would respond to any attack on its nuclear facilities....

1) Open season on American forces in Iraq -- and throughout the middle east -- would be declared.

2) threaten to shut down oil tanker shipping through the straits of Hormuz-0 thus sending oil prices skyrocketing.....

3) sabotague of oil infrastructure in Saudi Arabia, Kuwait, etc. etc....

p luk

You are much smarter than the goofballs running this country, apparently. I agree with your prediction, absolutely, and wonder only how the folks who HAVE realized this plan to counter.

And I've got another really big question.

According to the Beeb, Iran has been moving its assets out of Europe (having learned their lesson when the US would not release the assets held by the Shah).

If you were to move all the assets of an oil-rich Middle Eastern country out of a number of banks, wouldn't you expect at least some of those banks to fail? One of the reasons David Rockefeller helped Kissinger find the Shah asylum is because if Iran got the Shah's funds, Chase Manhattan would have failed.

Why aren't we hearing of banks failing now?

And here's another question. Are they just moving dollar-denominated assets? Or are they doing something else?


IIRC, Iran has been under US sanctions since the hostage-crisis back in the Carter years. I seriously doubt they have much of anything in US banks.

But oil is bought and sold in (most of) the international market based on the price in US dollars --- and Iran doubtless has "dollar denominated" assets that were used to pay for its oil (dollar denominated bonds, stocks in US companies, and cash). When the price of a barrel of oil goes up, it means that a US dollar is worth less.

Lets say gold is trading for $500 an ounce today, and crude at $50 a barrel. In other words, the market says that one ounce of gold is worth 10 barrels of crude.

So lets say that Iran has $500,000,000 in dollars today, with which it buys 1 million ounces of gold. The shit hits the fan, and crude starts selling for $100 dollars a barrel.

Now, the market says that 1 ounce of gold should buy 10 barrels of crude. So now, one ounce of gold is worth $100, instead of $50.

That's the TOTALLY simplified explanation for what is going on. Basically, because petroleum is a dollar denominated asset, whenever the price of petroleum goes up, the value of the dollar goes down, because the dollar buys less petroleum.

Iran, in dumping its dollar denominated assets, is signalling that its dead serious about fucking with the price of oil if the US makes a move. Its not that Iran is afraid of its assets in US banks being frozen --- they were frozen back in 1980, IIRC. But the dollar is really fragile right now, because of the massive US balance of trade deficits and budget deficits --- and anything that drove the price of oil through the roof would result in the dollar being used for Kleenex in the rest of the world.....

Iran knows this --- everybody knows this. Moreover, Iran doesn't really give a fuck what happens to the economy of the rest of the world -- its a theocracy, and if its allah's will that there is a worldwide depression, well, what's a mullah gonna do?

"One of the reasons David Rockefeller helped Kissinger find the Shah asylum is because if Iran got the Shah's funds, Chase Manhattan would have failed."

ew - That sounds to me like Rockefeller and Kissinger were moving the Shah's personal funds, not Iranian national funds. I don't remember what the Shah's personal fortune was (of course he had probably looted the Iranian Treasury over the years), but possibly big enough to take down a bank if it was seized.

Also, the international banking system is completely different now than it was in 1979. Banks are bigger, more globalized, more diversified - which means, presumably, they're less vulnerable to collapse by losing one set of assets. Even one nation's set of assets. That would explain why you're not hearing about any banks failing.

The dollar-denomination question is a corker. I couldn't remember offhand whether OPEC had switched to Euro denomination. While googling to find out, I found a couple really interesting papers on the subject. One is by Wesley Clark, first published in January 2003 and updated in 2004: Revisited - The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth.

I can never remember how to do embedded links, so here's the url:


Clark posited that one of the real reasons for the war was to halt a momentum in OPEC to switch to Euros. Saddam had already done so in 2000; Clark suggested that, under cover of occupation, Iraq would switch back to dollars (I don't know if that's actually happened, and the paper doesn't say.)

OPEC hasn't made such a switch yet, but the US still fears it might. (Which, if Clark was right about the 'real' reason for a war with Iraq, certainly explains why Bush is focusing his bellicosity on Iran.)

Iran can screw the US (and the West generally) over pretty badly just by shutting down the Strait of Hormuz and not letting oil shipments through. If it also switches from dollars to Euros; well, here's another link to another paper on that very issue:


An excerpt therefrom:

But, CNN will have you believe that Iran is causing nuclear problems by refusing to scale back its nuclear program. The real story is that by March 2006 Iran is threatening to have in place an entity called the Iranian Oil Bourse. Trading of Oil on this exchange will be denominated in – yes you guessed it – Euros.

March 2006 is right around the corner.

Let me clarify.

As I understand it, it was Iranian assets, not just the Shah's, that were in Chase in 1979. There were also some contested properties.

As I understand it NOW, the assets in question are (were) in dollar-denominated accounts in Europe. I guess CaseyL's explanation for the larger globalized bank explains why we haven't seen banks fail. But keep your eye out.

And, yes, I'm aware of the Euro undercurrents for the Iraq war and the Bourse tensions underlying the Iranian stuff now (note, too, Venezuela barters some of its oil, also to bypass the dollar). That's why I'm curious about the denomination here. It would be a really appropriate time for Iran to fund its bourse (although most people think it will fail and therefore that would be a risky thing to do right before going to war). So if the money didn't go into its own bourse, where would it go? I can't imagine they'd go to the Caymans--too accessible to us. Abu Dhabi? And why hasn't the media thought to answer that question?

"And why hasn't the media thought to answer that question?"

That's a joke, right? The MSM, SFAIK, hasn't even thought to ask it.

Well, not a joke, really.

I mean, it was the Beeb that reported this story, not, say, NBC. NBC wouldn't even think to ask what Iran would do to prepare to withstand sanctions.

CaseyL -

I don't know whether there is anything to it, but the Federal Reserve is suppose to stop reporting the M3 numbers in March also.

I am inclined to see merit in this article regarding US dollars:


Its the middleman and those Enron like profits...

I don't remember what the Shah's personal fortune was (of course he had probably looted the Iranian Treasury over the years)

Oh yes. Just days after the Shah fled Iran in 1979, the Washington Post ran a story that had clearly been in the can for some time, but was now 'safe' to print: The Shah raked off an estimated $2 billion a year from Iranian national oil proceeds, and had something like $16 billion in personal accounts. I don't know if all were in the U.S.

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