December 28, 2023 - 7:00am
When the Gaza war broke out in October, the contrast with the 1973 Yom Kippur War was stark. Whereas the earlier conflict sent inflation soaring in the West, triggered a global recession and heralded the end of the Keynesian era, this time around the breakout of fighting barely registered in world markets.
Now, as the conflict enters its third month, that second proposition is starting to look dicey. Despite constant diplomatic efforts to prevent Iran or its various regional proxies from entering the conflict, their pace of activity has stepped up. Recently, Iran-aligned Houthi rebels have opted for a new tactic of attacking Red Sea container ships perceived as Israel-connected or Israel-bound. With 12% of global trade passing through this channel, the diversion of ships to the longer Cape route by some companies will start to raise shipping costs. Meanwhile, as volatility grows in the region, the price of oil — which had been declining all through the early weeks of the war — recently resumed rising.
Should this situation continue, inflationary pressures will once again begin building, even if they look manageable for now. While an uptick would complicate the job for central banks which are still trying to bring down inflation, provided matters don’t worsen, the effect on retail prices will remain muted. The US-led Combined Maritime Forces, originally formed to protect Red Sea traffic against Somali pirates, has now been repurposed to counter Houthi attacks, and the oil price remains well below the highs of recent years.
But what if matters do worsen, and Iran and the United States are drawn more directly into the war? For the time being, it appears that Iran would still prefer to avoid outright involvement. However, Washington claims that the Islamic Republic has been assisting the Houthi attacks, and Israel recently used that as a pretext to assassinate an Iranian Revolutionary Guards general. It seems likely that Iran will issue a response in due course.
It’s equally possible that Israel may have its own reasons to strike preemptively, most probably against Hezbollah. Because it is a closer ally to Iran than Hamas, Tehran would be less likely to stand by if its Lebanese partner became mired in combat. For their part, US forces are now stretched increasingly thinly across the region, which could embolden Iran and its allies.
Were Iran to directly enter the conflict, attacks on shipping would probably widen beyond the Red Sea to the Strait of Hormuz, which could dramatically affect oil prices. Given how much the world economy has changed in the last fifty years, inflation wouldn’t soar as it did then. But the current wave of celebration that inflation has supposedly been licked, and which is fuelling rallies in stock and bond markets, would probably come to a screeching halt. Central banks would dial down any optimism that rate cuts are on the way.
Tension is rising and American diplomacy has proven ineffectual at halting the spiral. It may be that recent diplomatic initiatives from within the region will suffice to cool tensions. Because if Iranian and American forces end up facing one another, all bets about the stability of the world economy can be called off.
John Rapley is an author and academic who divides his time between London, Johannesburg and Ottawa. His books include Why Empires Fall: Rome, America and the Future of the West (with Peter Heather, Penguin, 2023) and Twilight of the Money Gods: Economics as a religion (Simon & Schuster, 2017).
jarapley
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SubscribeMy MP [Mike Freer, Conservative, Finchley and Golders Green, Parliamentary Under Secretary of State for the Ministry of Justice] had his constituency offices fire-bombed a few days ago. This is probably the most Jewish constituency in the country and Mike Freer has been a strong supporter of Israel. As a further annoyance to Islamists he is also gay. He says that this arson attack is part of a pattern of intimidation he has suffered for the last few years. As a consequence of the quite credible death threats (remember David Amess) he and his same sex partner have taken to wearing stab-proof vests.
The long arm of revolutionary Islam, it seems, reaches deep into our communities. Why has this incident been given so little attention by our usually gay-supporting MSM?
Why has this incident been given so little attention by our usually gay-supporting MSM?
Let’s consult the ladder of victimhood, shall we? A white man, albeit gay, but still white and male vs. not white people who are also not Christians. It’s not hard to see how the cult of the aggrieved and offended will score this one.
Has this been widely reported? This is the first I’ve heard of it.
Not widely. Reporting has been quite low key. The incident occurred on Christmas Eve. BBC finally got round to mentioning it on their News website yesterday:
https://www.bbc.co.uk/news/uk-england-london-67830284
Gays are the new fascists or didn’t you get the Stonewall memo about trans rights
Give it a rest! T! A tasteless and inappropriate comment given what this thread is about!
It’s too bad Middle Easterners can’t be sent back to sort out the mess in their home countries. There is no reason why Western nations have to host such intolerance and culturally-‘misfitted’ people.
They’ll be Hawks in the Knesset and in White House/Congress v much hoping Iran oversteps and much more significant retaliation justified. The IDF and US military are deploying a fraction of the firepower they could at the moment, as much because you can’t deploy more in Gaza and the Houthi Drones haven’t inflicted much more than inconvenience to date.
The Iranian leadership knows this, thus will nibble and probe but won’t want to jeopardise it’s own position by provoking a much firmer reaction. Autocracies care most about protecting their own position.
The bigger threat comes in the S China sea post Taiwan elections in late Jan – mere weeks away, although everything still points to Xi waiting a little longer to assess how much more Agent Orange can destabilise US politics and lessen resolve to resist.
Based on what happened to Iraq and Saddam Hussein, neither the US nor the IDF will need ANY excuse whatsoever to destroy Iran.
Some years ago now at Nuremberg, we used to HANG people for such behaviour.
I’m surprised CH you’d not jumped at the error in the withdrawal from ‘east of Aden’ foreign policy completed in 67?
As I recall it was called “East of.Suez”.
Probably being a bit slow seeing as its a post Christmas lull but what precisely is “such behaviour”?
“Waging aggressive war” apparently!
At least two German Field Marshals ‘swung’ for that.
(* Despite the fact that we, the UK Declared War on Germany and NOT the other way round.)
You really are a bit of a plonke@
They didn’t hang for starting WWII. They hung because their side lost. Part of the spoils of war is getting to say who is or isn’t a war criminal after the fact. That’s been true since the concept of war crimes has existed. In ancient times of course they didn’t bother with the veneer of legality and just killed whoever was in charge of the losing side so the enemy would have no leaders to lead an uprising.
Given the circumstances of Nuremburg and the things most of these Germans participated in, forgive me for not shedding a tear over their unfair treatment. One of the rare instances where war crimes trials weren’t entirely pointless.
That said, I wouldn’t mind Bush and all the neocon buddies behind the Iraq war spend a few years in Leavenworth. Fat chance of that.
No one is saying that US behavior is always good, but comparing it to Nazi Germany only proves that you have lost basic morality.
If that were true, the US would have carpeted bombed Yemen to dissuade the Houthis as shooting down $2k home made drones with $2m missiles is not a long term strategy. The fact that they haven’t (yet) shows that they are wary of provoking a response which drags the whole ME into war.
Yes. The Iranians couldn’t realistically defend themselves from an all out air assault from Israel or the US, let alone both at once. It would be about as one sided as Iraq was. The only way the US could lose is if it were stupid enough to try to occupy the country and install a new government. That’s always the problem. Just bomb the crap out of them until they cry uncle and leave them to muddle over whether it was worth it to oppose the Great Satan.
If I were Xi, I’d wait until after 2024 at least to move on Taiwan. If Biden wins, nothing really changes but if Trump wins, well any number of bad things could happen that pushes the country further towards civil conflict.
Its not that simple Steve, the Iranians can hit Aircraft carriers or air bases the US or Israel attack them from, you’re very foolish if you doubt the Iranians don’t have plans of their own
No DW the Carriers would remain well out of range and Iran doesn’t have an air force that’d last a day in any major conflagration with US/Israel. It has no long range missiles either like the Storm-Shadow currently hitting Russian warships near Crimea. It has cheap short range drones and undoubtedly could keep lobbing them for some time. But it’s not doing that now, other than via proxies some way from it’s own Borders, because it fears the retaliation
You under estimate the Iranian military, (its not Iraq) eg Carriers are vulnerable to Submarines, Iran has 3 Kilo class Subs
Also keep in mind that the Russians won’t be holding back helping Iran in any way they can. Attacking Iran is a very bad idea, so I expect it to happen
And you think an Iranian sub would get through the Carrier screen? They’d be sunk v quickly if the US or Israel thought them a threat. The US will know where all 3 are too, and one at least will be in Port.
I’m sure they do, but right now they aren’t doing anything but sitting there and using proxies who they can plausibly deny they have control over to lob cheap missiles at international shipping. The Israeli attack on Gaza is the most egregious provocation Israel has given their enemies in decades and the best excuse to start a war of choice that Iran and the rest of the Islamic world is likely to ever get, yet they all sat there and did nothing. If they thought they could win a war with the US, Israel, or both, they would have started one by now. Instead they’re letting their proxies take all the heat, just like the US is doing to Russia through Ukraine. If they wanted to engage the US or Israel directly, they could have. They didn’t for the same reason the US didn’t directly engage Russia. They fear a reprisal. In the case of Russia, the threat of nuclear annihilation remains an excellent deterrent. The US wouldn’t use nuclear weapons on Iran, even if it did attack, but they don’t need to.
Iran fought Saddam Hussein to a stalemate 30 years ago and they are mostly using the same tanks, planes, and heavy weapons they had then. Since then, the US has obliterated Saddam’s army twice, each time in a span of a few days. They know what a full scale attack from the US looks like against a nation with similar military power, and they don’t like it at all. They do have a lot of cheap missiles, rockets, and drones which is how they are supplying the Houthis and Hezbollah, but those weapons are for hitting soft targets, like civilian structures in Israel, or cargo vessels. American warships are not soft targets. To a cargo ship, those weapons are a dangerous threat. They probably couldn’t sink a cargo vessel, but they could cause a lot of damage to the ship and its cargo that would cost a lot of money to the shipping company. To a Nimitz class carrier, they’re a mild inconvenience. They could fly dozens of drones into a warship without accomplishing anything but maybe starting a few deck fires. Unless they scored an extraordinarily lucky hit, they aren’t a threat to a military target.
Iran is using a smart strategy. They know they can’t win a direct conflict so they’re using cheap weapons to strike soft targets and using proxies so they can’t be directly linked to the attacks.
Agree on Iran SJ. They’d hit the Nuclear plants, Oil refineries and distribution sites and the Republican Guard with munitions and certainly not get involved in any Ground offensive.
On Taiwan – Xi likely calculus trying to balance the risk of delay (i.e Taiwan given a further year to prepare and make itself a ‘porcupine) vs western complicity increases with Trump Presidency making the acquisition easier. Suspect he’s watching the Polls as closely as anyone and hoping the MSS can exert some influence with clever interference in both Taiwan next month and then in the US during 24.
The elections in Taiwan could decide how a lot of dominoes will fall. If the DPP wins, Xi will conclude, probably accurately, that his pressure and influence campaign failed and that Taiwan will never voluntarily rejoin China under the CCP. He’ll then put his other plans into motion, and there will be a military buildup. There’s no way he can conceal the level of buildup that would be required. The US military would know something was up just like with Ukraine, whether they make it public or not. In that event, I suspect we’ll see some kind of invasion or blockade before 2026. If the KMT wins, he may back off because it means that his campaign of intimidation and pressure is working, and he may simply continue to apply pressure in hopes he can still avoid a conflict that might or might not go his way. Then again, he’s made public promises and I suspect there’s a limit to his patience.
I really hope Trump loses. If he loses, nothing changes, and we can maybe get him out of the way in favor of a more sane, stable populist leaning Republican, maybe Rubio, Hawley, Youngkin, etc. in 2028. If he wins, I just don’t know. The hyperbolic reactions of the other side have always been problematic, but I’m wondering if they’d even let Trump take office. They’ve built him up as such a profound and undemocratic threat to the nation itself, one wonders how they can square that if he actually wins. If he wins, they’re screwed regardless, because whether they let him take office or not, half the country will be having fits of panic and/or rage.
“Washington claims”…as believable as Iraq having WMD..
I don’t think there’s any serious doubt that Iran are involved at some level with support for the Houthis. Whatever view you take on the Yemen conflict (and I’d suggest that as with so many current conflicts there are “bad guys” and “worse guys” and no real “good guys” – though not well enough informed to know just who the “worse guys” are in this particular case) there’s little doubt that Iran is involved in supporting the Houthis. Impossible that the Houthis could have survived this long without outside support.
I’m not convinced this actually is a critical issue for the US which has been self-sufficient in oil for some time now. It’s more important for other Western nations who need to start stepping up and paying for their own defence. Why should the US always sort it out for them ?
Its a critical issue for Israel, so that means its a critical issue for US politicians
Yes, Because most are bought and paid for.
I’m really not convinced that what happens down in Yemen is a critical issue for Israel. What makes you so certain of that ?
an oil price spike causing inflation throughout the global supply chain will impact the USA in a number of ways as despite its size it doesn’t operate in isolation-irrespective of its position as a net exporter of oil & gas it has skin in this game-and that’s without the optics of the Iranian theocracy and the benefits of giving the mad mullahs a bloody nose as a reminder that there are consequences to financing proxy wars.-a point that Sleepy joe has to date largely avoided.
Sleepy Joe, the guy who promised peace and civility and delivered the exact opposite. Maybe it’s a perfect time to fast-track the Iran Nuclear deal.
For anyone who takes Western “claims” at face value, I have a bridge in London they should buy…in fact a host of them.
The Western “intelligence” agencies’ main purpose after 1945 was to find out what the Soviet Union was doing and intended. Yet 45 years later they didn’t even know that the Soviets were going to just fold their tents and go home…an epic failure.
And if they really did know we would surely have heard about it by now, to justify their rather expensive existence.
Iraq, Afghanistan, Libya…the examples are almost endless.
For heavens sake eye ess was a creation of the USA and funded by them via the KSA to try to overthrow the Syrian government…and failed. But the USA still illegally occupies parts of Syria.
A civilian example is Covid…the new Black Death…which wasn’t at all.
Or how about “cheap” green energy…which isn’t…
Regrettably ALL claims by Western governments should be treated with extreme scepticism because they are probably made to profit our rulers, not protect or benefit the people.
But you are entirely right that the USA should look after itself and other countries pay for their own defence…except those countries would not then be part of the American Empire.
Not KSA or the US, but Qatar. The biggest financier of terrorism worldwide, from ISIS to the Hamas.
Possibly Qatar as well, but most certainly the USA via the KSA…
And not just financed by the USA…40 tons of ammunition dropped in the wrong place and taken by IS…as likely as Santa Claus being real…
Come off it! That was a simply wonderful COSY/COLD War that lasted more that forty years. Forty ‘golden years’ when the US Defence Industries were booming!
On the balance of probability the CIA or whatever those Muppets were called even ‘gave’ the Soviet Union the Bomb in 1949 to make ‘them’ appear as a credible enemy. ‘Frying’ the Rosenbergs was all part of the narrative of “Reds under the bed”.
However it had been apparent from the deployment of the ‘Corona Satellites’ in the 70’s that the Soviet Union was a complete “sack of sh*t” to quote one senior US General of my acquaintance. Mr Reagan however was sceptical as he had every right to be after years of hysterical propaganda, and thus ‘beefed up’ the Arms Race, thus inadvertently killing off the Golden Goose, otherwise known as the moribund USSR, which instantly ‘keeled over’ as you so rightly say.
Yes the Cold War was probably totally unnecessary. Aneurin Bevan called it right when he pointed out that a country, the Soviet Union, which produced so little steel compared to the West was simply incapable of being an effective threat to the West.
Of course, WW2 pulled the USA out of the Depression so why not just carry on with the same formula…eternal war for eternal prosperity…for some, not all, of course…
But Soviets were credible enemy when viewed from the perspective of the 60 or 70s.
T55 and later versions are rubbish in comparison to Abhrams and Challenger tanks but not in comparison to M60 “Patton” if you take quantity of Soviet tanks into account.
Could NATO stop Soviet advance into West Germany without using nukes? NO.
It was the same from political perspective with many newly decolonised states in Africa and Asia joining Soviet Block.
Communist Parties were strong in Italy and France.
We can laugh at it now, but people believed in statistics about Soviet Union economic growth.
Oh…my response is awaiting approval…quelle surprise…not going to see that any time soon…
Oh ye of short memory. History shows that Iraq used WMD on at least two occasions – in its war with Iran and against the Kurds. So the Iraqis did have it at some point. Whether that point extended into the first Gulf War is open to debate, but the gas existed and in all likelihood, we provided Saddam with it. Back when he was the enemy of our enemy.
Awkward. But true.
Oh ye of short memory. History shows that Iraq used such weapons on at least two occasions – in its war with Iran and against the Kurds. So the Iraqis did have it at some point. Whether that point extended into the first Gulf War is open to debate, but the gas existed. In all likelihood, we provided Saddam with it. Back when he was the enemy of our enemy.
Except Iraq did have such weapons. We know that because Saddam used gas in his war with Iran and on the Kurds. Whether it was still around in the early 90’s is open to debate, but not the fact of its existence.
For what it’s worth, the intelligence agencies of England, France, Germany, Russia, and Israel all agreed at the time that Iraq had WMD.
Perhaps you also remember that weapons inspectors would routinely be forced to wait days outside a site before being allowed in, while truck convoys came and went?
It’s worth the same as most “intelligence”…
The WMD were never found, were they…
However it does say something that the WMDs weren’t DELIBERATELY planted, as they would have been in the good old days!
Precisely, and even more shameful than the current nauseating outpouring of ‘crocodile tears’
If a world war starts, the USA will be ready – over the past two years, Biden has let in 8 million illegal immigrants which should be the first to be recruited to fight WW3. And if they survive they will be given citizenship otherwise they should plan to leave the country asap.
Has the US considered ending the genocide and pressure the Israeli government to comply with all UN Security Council resolutions on the region? I’m pretty confident that would alleviate the tension.
Has Hamas considered releasing the hostages? Have the other Muslim nations considered pressuring Hamas into doing so? Since we’re tossing out random questions.
The Palestinian population has basically doubled in 20 years. People who use terms like genocide have zero credibility. Makes you sound like a school girl – that or a senior at Harvard.
Article II
In the present Convention, genocide means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such:
(a) Killing members of the group;
(b) Causing serious bodily or mental harm to members of the group;
(c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part;
(d) Imposing measures intended to prevent births within the group;
(e) Forcibly transferring children of the group to another group.
Article III
The following acts shall be punishable:
(a) Genocide;
(b) Conspiracy to commit genocide;
(c) Direct and public incitement to commit genocide;
(d) Attempt to commit genocide;
(e) Complicity in genocide.
Convention on the Prevention and Punishment of the Crime of Genocide
Approved and proposed for signature and ratification or accession by General Assembly resolution 260 A (III) of 9 December 1948
Entry into force: 12 January 1951, in accordance with article XIII
So it’s not “genocide” then.
There’s only one group to blame for what’s happening – Hamas. Everything else is just noise.
Article II describes Hamas’ conduct against the Israelis and a good deal of what various sects of Islam do to each other.
That certainly explains why the term is now conveniently used to describe virtually anything and everyone, but it doesn’t make it right or appropriate. A father can now be accused of genocide for causing mental harm to his family for being a drunk? A Chicago gang can now be accused of genocide for killing police? Brilliant way to debase the language.
For some people, their concept of “genocide” is now as fluid as their concept of “gender”.
We’re agreed then. Accusing Israel of genocide is nonsense.
Does this apply to the dozens of Muslim countries that have cleansed Jews – or the expulsion. Of a million Of afghans from Pakistan – why no statements in China. This is a very benign genocide where leaflets are dropped and warnings are given. Your invocation of the UN is a good reason to defund that organization and withdraw aid from any countries remaining members
Comparing them with Harvard seniors is an insult to level-headed school girls everywhere.
My apologies to all school girls. Lol
More than doubled. Gaza also tops the chart of obesity world-wide. So much for the open prison adage
This I never knew. Sounds very counter intuitive. Gaza tops the world in obesity.
Do you have a source for that? Every chart I see has the Pacific Island nations at the top. Palestine 31st.
Not sure if you are joking or serious? If serious, you must be the most naive person on the planet, next to that screeching teenaged girl from Norway.
Spelling ‘mistake’.
Sweden…….if you mean Greta Terdburg.
What an odd question!
Surely you know that the US is the ‘home’ of genocide, always has been and always will be?
Unlikely in an election year given the power of the Israel lobby in the US. And the neo-cons will strongly resist.