Is War With Iran Still a Possibility?

Iran is in the news again.  Obama, in an interview with Israeli TV, said the following:

“Right now, we think it would take over a year or so for Iran to actually develop a nuclear weapon, but obviously we don’t want to cut it too close.  So when I’m consulting with Bibi as I have over the last several years on this issue, my message to him will be the same as before: ‘If we can resolve it diplomatically that is a more lasting solution.  But if not I continue to keep all options on the table.'”

It is hard to tell if Obama is just blowing smoke and trying to suck up to the Israeli lobby, or if he might actually resort to war.  I worried about this issue more when George W. Bush was president.  Bush started two major wars.  Obama has somewhat continued those wars and he has started some new ones, although smaller in nature.

I don’t expect that Obama and his handlers are planning to start a war with Iran.  They usually prefer to pick on smaller and easier targets.

With massive deficits and a still struggling economy, arguments can be made both ways.  Some people say that Obama might use war as a distraction from all of the domestic problems.  But then there is also the argument from the other side that the U.S. government simply cannot afford another major war.  The yearly deficits are over $1 trillion and the future doesn’t look much better, even with the so-called sequester “cuts” that are set to take place.  Another major war would mean massive cuts in entitlements or else even larger deficits.

If you don’t think Obama is bluffing and that we may actually see a major war with Iran, then you should be taking all of your money and putting it into gold and oil, particularly the latter.  Right now, the oil market is not indicating a large probability for war there.  If we see a major war in Iran, I think crude oil could easily hit $300 in a relatively short period of time.  It is currently less than $100.

I’m not sure if there can be an “in-between” scenario here.  I suppose that the U.S. (or Israel) could use drones and airplanes to drop tactical strikes on Iranian facilities without trying a foolish occupation like Iraq.  But even here, don’t you think there will be consequences?  You will see missiles flying into Israel.  You will probably see the Iranian government try to shut down oil routes in the Persian Gulf.  So even without an occupation, there is still a potential for a huge spike in the price of oil.

Aside from the fact that starting a war in Iran would be completely immoral, it is also bad economics.  It would damage the U.S. economy that much more and the average American would feel even more pain, this time with vastly higher gasoline prices and probably higher prices overall in consumer goods.

Let’s hope that Mr. Nobel Peace Prize is not serious with his implicit threats to Iran.  He shouldn’t play with fire, because we may all get burned.