moneymorning.com

BY PETER KRAUTH, Global Resources Specialist, Money Morning

No one knows the machinations of the day-to-day silver price better than Ted Butler.

Ted publishes bi-weekly commentary at www.butlerresearch.com, with a special focus on the silver market, which he’s been closely following for over 30 years. Ted is an expert’s expert.

So naturally, that’s whom I turned to for an in-depth perspective on what’s really going on with the silver price. As usual, Ted tells it like it is.

I think you’ll be fascinated by Ted’s tremendous insights…

Ted Butler on Silver Price Manipulation

Ted, you’re widely recognized as the foremost expert on manipulation in the silver futures market. How do you define manipulation, and how are the main players benefiting from that?

Manipulation is another way of saying someone controls and dominates the market by means of an excessively large position. So, just by holding such a large concentrated position, the manipulation is largely explained. In real terms, whenever a single entity or a few entities come to dominate a market, all sorts of alarms should be sounded. This is at the heart of U.S. antitrust law. It is no different under commodity law.

Price manipulation is the most serious market crime possible under commodity law. In fact, there is a simple and effective and time-proven antidote to manipulation that has existed for almost a century, and that solution is speculative position limits. Currently, the Commodities Futures Trading Commission
(CFTC) is attempting to institute position limits in silver, but the big banks are fighting it tooth and nail.

As far as any benefits the manipulators may reap, it varies with each entity. But if you dominate and control a market by means of a large concentrated position, you can put the price wherever you desire at times, and that’s exactly what the silver manipulators do regularly. This explains why we have such wicked sell-offs in silver; because the big shorts pull all sorts of dirty market tricks to send the price lower.

Could you tell us when and how you got started researching this matter?

It started around 1985, when a brokerage client asked me to explain how silver could remain so low in price (in the single digits) when the world was consuming more metal than was being produced. I accepted the intellectual challenge, and it took me more than a year to figure out that the paper short positions on the COMEX were so large as to constitute an almost unlimited supply. It was this paper supply that was depressing the price.

Who are the main players in this manipulation scheme? On average, what percentage of COMEX silver contracts are “controlled” by these main players?

Under U.S. commodity law, the names of individual traders are kept confidential. However, it is no secret that the commercial traders are the big shorts. It is also no secret that these big commercial shorts are mostly money center banks and financial institutions. Based upon government data and correspondence, the largest such short almost certainly is JPMorgan Chase & Co. (NYSE: JPM), who inherited their big silver short position from Bear Stearns when JPM took over that firm in 2008.

Together, the eight largest commercial silver shorts on the COMEX generally account for 50% to 60% of the entire net COMEX silver market, with JPMorgan alone holding around 25% or more of the entire market. I would hold that those percentages of concentration and control constitute manipulation, in and of themselves. By the way, there is no comparable concentration on the long side; only the short side of silver.

What exactly are the dominant players doing to manipulate the price?

The current exact mechanism they use to suddenly rig the price lower is High Frequency Trading (HFT). This is the placing of sell orders in great quantities by computer programs that suddenly appear as legitimate orders, but are really mostly “spoofs,” or orders entered and canceled immediately (in the fractions of a second). When the sell orders first appear, they spook others into selling as they give the appearance of great selling about to hit the market. Instead, it is all a bluff, intended only to scare others into selling, as the vast majority of these original sell orders are never executed, nor were they ever intended to be executed. They were designed for one purpose only – to scare others into selling.

Through HFT, the commercials are able to push prices suddenly lower on very little actual volume. But once prices are put lower, the outside selling (from those who are frightened by the drop in prices) hits the market. It is that outside selling from technical traders that the commercials then buy. In a nutshell that’s the HFT scam in silver. It is important to grasp the fact that the actual selling (and commercial buying) takes place AFTER the price drops. Most people think great selling is what causes the price to decline, but that’s not true. The great selling only comes in after the price has been put lower, which is the purpose behind HFT in silver.

What impact, if any, has the arrival of silver ETFs had on the silver price, manipulated or otherwise?

A giant impact. The introduction of the big silver ETF in 2006 is probably the single biggest reason behind the climb in silver prices from the $7 area the year before. Investors have purchased close to 600 million ounces of silver in all the silver ETFs over the past six years. Without that buying, I doubt we would have made it over the $10 mark. While silver is still manipulated due to the concentrated short position on the COMEX, the introduction and success of the various silver ETFs has impacted the price tremendously. That should continue.

Eric Sprott has indicated that 143 times the amount of silver is traded in the paper markets versus mine supply. What implications does this have for facilitating silver price manipulation?

There are two distinct forces exerting artificial control of the price of silver. One is the concentration on the short side of the COMEX. The other is the ascension of the mindless and destructive computer trading of HFT. This was behind the “flash crash” in the stock market on May 6, 2010.

The difference in HFT is how the regulators react to it. When it occurred in the stock market, the regulators, the SEC and CFTC, rushed to make sure such meltdowns didn’t recur in the stock market. Instead, the HFT practitioners were given free rein to disrupt the silver market. All the big sell-offs in silver are related to HFT to aid those holding large short positions.
The simple and undeniable fact is that the commercials are always big buyers whenever gold and silver sell off sharply. These commercials trick others into selling after prices have been deliberately pushed lower. Because the commercials are always the big buyers on every big sell-off, that proves they are rigging the price, as it is not possible for them to always be the buyers on these pre-arranged sell-offs.

What, if any, reasons can you think of that would explain why so much more paper silver is traded than physical silver?

Investors who hold physical silver don’t buy and sell often; they hold. Only paper silver holders, because they only put up a fraction of the full value as margin, can be regularly tricked into selling their paper contracts on price declines. The big commercial shorts know this and that’s what the game is all about – taking paper long traders to the cleaners.

Also, there is more paper traded than real silver because there is a very limited amount of real silver and an infinite supply of paper silver. It’s important to know the difference and that difference is what makes physical silver superior to any paper alternative.

If one day large numbers of silver futures contract holders choose to take physical delivery, would that overwhelm the physical market? Who would be the party/parties on the hook at that point, and could they default, or how could this be resolved if there’s insufficient physical silver to fill those contracts? What do you think that would do to the silver price?

Absolutely, large demands for physical delivery could overwhelm any market, including silver. The key is who would be demanding delivery. If it was a large single entity, then I suppose the regulators could cry foul and claim an attempt to manipulate prices higher. It would be much better if things continued as they have to date, where great numbers of smaller investors grab a piece of the physical silver market.

The shorts would be on the hook in that event and there is a risk, but not a guarantee, of a default. Default or not, if there is insufficient silver to meet demand, then the price must explode to cool off demand and bring sellers into the market. That’s the way the law of supply and demand works.

I’ve read more suspicious activity just recently took place, on February 29th, in the silver futures market. My understanding is that large commercial traders, using high-frequency trading, manage to influence the price to their advantage. Can you explain what’s really going on?

You’ve described it perfectly. The key ingredient, which many people miss, is that the large commercial traders don’t sell heavily on such big down days. They just pretend to sell, by rigging prices sharply lower in order to scare and induce others into selling, in order for the commercials to buy. Everyone thinks the commercials are selling on these big down days, but in reality they are buying every contract they can trick others into selling. That’s at the heart of this scam.

The proof of this is in government data, specifically the Commitment of Traders Report (COT), published by the CFTC weekly. These reports show that on every big down move, the commercials are always the big net buyers. This provides the reason and rationale for the sell-offs, namely, they are pre-planned events intended to allow the commercials the opportunity of buying whatever they can trick others into selling. If there’s another reason that fits the documented facts, I haven’t heard it.

The CFTC is aware of the concentrated positions in the silver market, thanks in large part to your efforts to point out the problems and irregularities. Commissioner Bart Chilton has made a number of statements acknowledging undue influence on the silver price by a small number of players. There is a lawsuit pending against JPMorgan in this matter. All of this has been going on for years, with no resolution. What’s your best guess as to why that is?

I’ve narrowed it down to either the government is allowing and encouraging JPMorgan to manipulate the market, which the majority who write to me claim, or the CFTC is not able to take JPMorgan to task for some reason other than complicity. I think the CFTC is afraid of JPMorgan on a legal and insufficient resource basis. I recently wrote an article asking if JPMorgan was stupid for being so heavily short silver, although I don’t think so. I think JPMorgan is just as much trapped in this big short position and is desperate.

The bottom line is that the motivation for why JPMorgan is so heavily short and why the CFTC is not moving against it is less important than the fact that the concentrated short position actually exists. Concentration is tantamount to manipulation. The CFTC has never brought a case of manipulation without a concentration existing. Why the CFTC doesn’t apply the same measurement in silver is something they refuse to answer, even though they have been asked thousands of times.

What’s your long-term outlook on the price of silver, and what events or milestones would help it along? What advice do you have for investors regarding silver?

The main advice I would offer is not to misinterpret the facts in front of us. First and foremost, there is a manipulation in effect in silver, but that manipulation must be viewed cold and hard. The manipulation has caused silver to be priced much cheaper than it would be otherwise. That makes it a better buy. The silver manipulation also will end one day, as all manipulations throughout history have ended. Given the nature of these things, the price of silver will be much higher when the manipulation ends. Therefore, the manipulation is giving silver investors a double-barrelled bonanza. One, a cheap price to buy at than would otherwise be the case and, two, a much higher price to sell at once the manipulation is ended. That circumstance does not exist in any other investment, to my knowledge.

Lastly, the best approach is to put cash on the table and pay in full for whatever silver you buy; no borrowing or margin. This enables you to stay with it for the long term and ride out the inevitable price volatility. And adjust your thinking to the long term as well. It’s somewhat fascinating and intellectually irresistible to follow silver on a day-to-day basis once you learn the facts, but the big payday is down the road, so keep your perspective there. The long play is the best play.
***

Of course, I’d like to thank Ted for helping us to uncover what is going on in the silver market.

Even state politicians are catching on. South Carolina’s state legislature requested a report from the treasurer on the advisability of investing in gold and silver.

In response, State Treasurer Curtis M. Loftis, Jr. prepared a six-page report indicating among other things that:

“Similar to other commodities, the value of gold and silver is determined by supply and demand, as well as speculation. The Federal Reserve, The London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practiced fractional-reserve banking and engaged in naked short selling causing artificial price suppression.”

But what’s most important to retain from this captivating discussion is what you need to do as an investor.

As Ted reminds us, the ongoing manipulation has caused the price of silver to be unsustainably low.

Like the forces of nature, eventually the market will rectify this imbalance, bringing the price of silver in line with its proper supply and demand fundamentals.

As Eric Sprott has said: “…this decade will be the decade of silver.”

With that in mind, my advice is simple: Get silver now. Here’s how.

And for more outside-the-box thinking on the entire precious metals sector be sure to visit Ted’s website:www.butlerresearch.com.

batr.org
JANUARY 30, 2012

and the TRUTH WILL SET YOU FREE . . .

Remember the real reason why Moammar Gadhafi is dead. He dared to propose and started creating an alternative currency to the world reserve U.S. Dollar. The lesson learned in Libya is now ready for teaching in Iran. Forget all the noise about going nuclear, the true message is that the banksters rule and nation states serve their ultimate masters. The hype and disinformation that surrounds the push for war is best understood by examining the viewpoint of Iranian MP Kazem Jalali. The Tehran Times quotes him in saying,

“The European Union must be aware that it can never compel the Islamic Republic to succumb to their will and undermine the Iranian nation’s determination to achieve glory and independence, access modern technologies, and safeguard its rights, through the intensification of the pressure.”

“The European Union is seeking to politicize the atmosphere ahead of nuclear talks with Iran and is aware that sanctions on Iran’s oil exports cannot be implemented since the world is not limited to a number of European countries”

Many political commentators warn that an embargo is an act or war. Chris Floyd provides this observation of the recent oil embargo against Iran.

“This week, the warlords of the West took yet another step toward their long-desired war against Iran. (Open war, that is; their covert war has been going on for decades — via subversion, terrorism, and proxies like Saddam Hussein.) On Monday, the European Union obediently followed the dictates of its Washington masters by agreeing to impose an embargo on Iranian oil.

The embargo bans all new oil contracts with Iran, and cuts off all existing deals after July. The embargo is accompanied by a freeze on all European assets of the Iranian central bank. In imposing these draconian measures on a country which is not at war with any nation, which has not invaded or attacked another nation in centuries, and which is developing a nuclear energy program that is not only entirely legal under international law but is also subject to the most stringent international inspection regime ever seen, the EU is “targeting the economic lifeline of the regime,” as one of its diplomats put it, with admirable candor.”

The most important aspect of the Iranian response lies in the way that changes oil settlement for delivery and the futile effect of the US/Anglo/EU imperialist dictates have in the marketplace.

Debkafile reports that India (and probably China) will pay for Iranian oil in gold.

“India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran’s oil exports.”

A more detailed analysis in Tehran Pushes to Ditch the US Dollar provided ample arguments that an embargo will fail.

“Iran may be isolated from the United States and Western Europe, but Tehran still has some pretty staunch allies. Iran and Venezuela are advancing $4 billion worth of joint projects, including a bank. India has pledged to continue buying Iranian oil because Tehran has been a great business partner for New Delhi, which struggles to make its payments. Greece opposed the EU sanctions because Iran was one of very few suppliers that had been letting the bankrupt Greeks buy oil on credit. South Korea and Japan are pleading for exemptions from the coming embargoes because they rely on Iranian oil. Economic ties between Russia and Iran are getting stronger every year.

Then there’s China. Iran’s energy resources are a matter of national security for China, as Iran already supplies no less than 15% of China’s oil and natural gas. That makes Iran more important to China than Saudi Arabia is to the United States. Don’t expect China to heed the US and EU sanctions much – China will find a way around the sanctions in order to protect two-way trade between the nations, which currently stands at $30 billion and is expected to hit $50 billion in 2015. In fact, China will probably gain from the US and EU sanctions on Iran, as it will be able to buy oil and gas from Iran at depressed prices.”

Click on the image below for Video

 

So why is the EU so determined to apply restrictions is answered in the video, Why does the EU join in sanctions against Iran?

Click on the image below for Video

 

Now that is part of the reason but for the entire story, one needs to confront the contentions in the You Tube Israel pulling the strings for war with Iran.

 

Where is gets so confusing for the casual observer is that any discussion that deems to be critical of Israel is a taboo discussion in polite company. Well, when it comes to addressing the impending prospects of a major conflict in the Middle East, the linkage between the deciding influences in American policy that coincide with a greater Israel objective, is silenced in the old-line press and media. Therefore, the key element to explore is the relationship of Zionist interests with the fundamental preservation of the paper currency imperium of Federal Reserve notes as the medium of payment for oil.

Think about this equation in light of ultimate control. Oil is the fuel that runs the engine of all economies. Money is the medium of exchange that pays for the petroleum. War is the universal method used to avoid the breakdown of the money recycling system. In The Petro-Dollar and the EURO, the nature of this formula is probed.

“War is always about achieving a political end. Even holy wars seek to impose a secular control over the vanquished. At the root of every political conflict, lies the MONEY component. On the scale of greed or fear, international discords can slide up or down. Depending on the circumstances or demands, governments rally domestic populations to accept their foreign interventionist goals. Claims of altruistic liberation are fictitious, when the rhetoric is stripped away and the real substance is exposed. Notwithstanding, variances of emphasis; the motive of money underpins the movements of all military confrontations.”

 

 

Who can deny that the interest of the Israeli state advances under the Petro-Dollar system for oil payment? The prospect of allowing an oil exporter to do business paid in gold disrupts the balances that maintain an uneasy political rapprochement. Even more threatening to the globalist monopoly is a defiant regime like the Islamic Republic playing by different rules that bypass central banking approval.

It seems that the NeoCon Christian Zionists will never be happy until they institute a techno drone bombing campaign to shut off even more oil resources. With Iraqi and Libyan production in shambles, it is now time to eliminate the Iranian resource. Spiking oil to $200 or more through another foreign intervention just hikes the balance sheets of the oil traders and banking interests. There is no doubt that foreign aid to Israel will rise at even a higher amount.

The bonus is that the gold hordes of Iran would become the spoils of war and conveniently find their way into the storage vaults of the banksters. This is a sweet game as long as there is a continuous supply of gung ho mercenaries to push the button of terror from the skies. Moreover, sending boots on the ground serve an even more profitable hellhole, the War Party can demand a much higher budget, floated with even more debt bought by China with the proceeds from the oil supply that are secured from the export of Canadian shale oil.

Miraculously, this pattern builds an even larger, if not, greater empire. As long as new villains are found to master, the Iran’s of the world will become subjugated under the background music of God Bless America.

What fools our fellow citizens became somewhere in the last century. Remember the John D. Rockefeller quote: “Competition is a sin”, especially if IRAN is the player.

 

 

Body bags are made from petroleum base material. In the height of irony, the oil wars are fought to secure the substance to form the burial cloth for disposable soldiers. If America really wants to stand behind the troops, their genuine duty is to prevent and oppose the next Middle East war.

Iran is not an existential threat to the United States. Haaretzreports that former Mossad chief Meir Dagan said in a television interview, “If Israel attacks Iran, it will be dragged into a regional war”. According to Dagan, Iran, Hezbollah and Hamas will respond with massive rocket attacks on Israel. In that scenario, Syria may join in the fray, Dagan said on the television program “Uvda”. Dagan added that such a war would take a heavy toll in terms of loss of life and would paralyze life in Israel.”

An America First foreign policy cannot wage another banksters war.

SARTRE – January 29, 2012

 

CapitalAccount
JANUARY 30, 2012

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Eurozone leaders are meeting, again…After talking about the eurozone crisis in Davos, they’ve moved to Brussels for an EU summit to…talk about it some more…blah blah blah. A lot of talk. When are we going to get something legitimate? Meanwhile, governments and banks are still in bed together – tangled up in their illicit love affair three years after the financial crisis began. We know the drill and we’re sick of it. We are sick of socializing losses. We are sick of fraudulent accounting. We are sick of hostage crises that force us to give ever more of our future earnings and ever more of our current purchasing power to a group of elitist bankers who don’t have to play by the same rules as the rest of us. Economist Michael Hudson joins us to talk about just this. He wrote an article recently that gave some context to banking, reminding us that, once upon a time, kings and governments used to kill bankers that they didn’t want to pay. So how did we get to where we are today, where bankers and banks are killing governments, moving their toxic assets onto the national balance sheets in return for fresh cash?

And later in the show, Lauren will give the audience her take on the week she spent in Davos, what she learned, and what she thinks is worth sharing with the rest of us.

tfmetalsreport.com
JANUARY 30, 2012

As you probably noticed, I was out all day. I was keeping track of things from afar but it sure doesn’t look like I missed much. Don’t despair. Tomorrow and Wednesday might generate a little more excitement.

Kind of like last week. I wrote up a blog post last Sunday night expecting all kinds of fireworks in the week ahead. As you know, the fireworks show eventually materialized but it took a little while to show up. Maybe this week will be the same?

You could probably tell from the tone of the previous post that I was expecting a little more downside than we saw today. However, when The Pig failed to get rolling to the upside, the metals reversed and we ended up with an uneventful day. The good thing about days like these is that they leave us with relatively well-defined ranges to watch.

Gold has now spent the better part of three trading days stuck in a $25 range bounded by 1715 on the bottom and 1740 on the top. Interestingly, I don’t think that this is the real range. If gold were to break out to the UP side, it would probably be quickly stifled at 1750. If gold were to break down, significant buying should emerge at 1705. So, what we really have is a $45 range, not a $25 range, and $45 (roughly 3%) ranges are tough to break out of. Therefore, I suspect we may stick around here for a while. Additionally, OI continues to contract which leads me to think that, even though gold has rallied $200 off its lows, there still isn’t much new money flowing into the pit. In fact, as of the close on Friday, total OI was just 430,159. This is down 3,550 from Thursday and it is at its lowest level since 1/17 when OI was at 425,294. And just a little OIFYI…gold is up almost $100 since then. Hmmm.

Silver has a similar picture. It is 3-day rangebound and its OI continues to contract. Friday night’s OI fell to 101,885 from 102,006 and is at its lowest level of the year! All the while, silver is up about 20% on the year. Go figure! There is a mass exodus from silver by the shorts, both spec and EE. This Friday’s CoT will be very, very interesting. Until then, let’s see if silver can break UP and out of this current range. If it does, it will likely head to 35-35.50 pretty quickly.

Two other items before I go help MrsF with dinner. We all should be watching The Pig rather closely. I keep anticipating some headline-induced bounce but it hasn’t yet materialized. Pigatha has been in this nasty down channel for two weeks now with no end in sight. We must watch 79 very closely, though. It may try to double-bottom there and then move up with an attempt to break out of the channel.

And I’ve noticed a few requests for a HUI chart so here you go. Rather than go small, I thought I’d give you this 2-year chart, instead. Talk about rangebound! Sheesh! The good thing is, IF it ever breaks out to the UPside, we’ll sure know it. Then, you can buy miners with impunity. In the meantime, you’ll have to remain picky and, to that end, I’ll try to give you a complete, individual miner update later this week.

That’s all for now. Hang loose, mongoose!  TF

usawatchdog.com
JANUARY 30, 2012

By Greg Hunter’s USAWatchdog.com 

The world economy is in the tank, and the Federal Reserve’s decision to extend its zero interest rate policy to, at least, the end of 2014 proves it.  What will happen if the fragile world economy also has to deal with a war with Iran?  That should have been the big headline coming out of the World Economic Forum in Davos, Switzerland, but what was reported was concern over slow or no growth in the world.  All the signs are that the West is careening towards war with Iran, and there is not a peep about it from world leaders.  Are they in a state of denial in a coming war catastrophe?  I say yes.

One of the first shots fired by the EU was in the form of increased sanctions to boycott Iranian oil in about five months.  The second shot looks like it will be fired by the Iranians who won’t wait for sanctions to kick in and will move to cut off oil exports of around 600,000 barrels a day to the Eurozone.  (Click here for more on this story.)  The Iranians have not yet cut off the oil.   MSNBC reported yesterday, “The Islamic Republic declared itself optimistic about a visit by U.N. nuclear experts that began on Sunday but also warned the inspectors to be “professional” or see Tehran reducing cooperation with the world body on atomic matters.  The International Atomic Energy Agency (IAEA) inspection delegation will seek to advance efforts to resolve a row about nuclear work which Iran says is for making electricity but the West suspects is aimed at seeking a nuclear weapon.”  (Click here to read the latest CNBC story.)

The immediate cut off of oil to the EU would be a disaster, and the Iranians do not have to close the Strait of Hormuz to do it.  This would cause major pain to a European economy teetering on the brink of collapse.  How well do you think the Eurozone would perform with a spike in energy prices?  Talk about no growth, how about a giant contraction and an implosion of some of the biggest banks on both sides of the Atlantic.  This is not all out war, mind you, just an immediate cut of Iranian oil to Europe.

Some say this is all just a high stakes game of poker with both sides saber rattling and jockeying for position.  Stratfor.com, global intelligence experts, said in a report last week, “It is in this context that the possibility of negotiations has arisen. The Iranians have claimed that the letter the U.S. administration sent to Iranian supreme leader Ayatollah Ali Khamenei that defined Iran’s threats to Strait of Hormuz as a red line contained a second paragraph offering direct talks with Iran. After hesitation, the United States denied the offer of talks, but it did not deny it had sent a message to the Iranian leadership.”  (Click here to read the complete report.)

I think this view is extremely optimistic and on the edge of wishful thinking in light of the comments made by the Israeli Defense Minister a few days ago.  The UK Telegraph reported, “Reviving Western concerns that his government is still contemplating unilateral military action against Iran, Ehud Barak gave one of the clearest signs yet that Israel’s support for new US and EU sanctions remains strictly limited.  “We are determined to prevent Iran from turning nuclear,” he told the World Economic Forum in Davos. “And even the American president and opinion leaders have said that no option should be removed from the table.  It seems to us to be urgent, because the Iranians are deliberately drifting into what we call an immunity zone where practically no surgical operation could block them.”  (Click here to read the complete UK Telegraph story.)  This doesn’t sound like a peace plan to me.

Debka.com, a leading intelligence website, reported the possible time table for war in a post yesterday.  The Debka.com analysis says actions by the U.S. Navy on deploying a special commando ship in the Persian Gulf point to a conflict that is just a few months away.  The report said, “The target date for deploying the commando platform in the Persian Gulf in four or five months indicates Washington is preparing for military clashes to blow up with Iran in the late spring or early summer.” (Click here for the complete Debka.com report.)  Then again, what if the Iranians feel war is going to happen no matter what and don’t wait for the U.S. to be fully set.  What if the Israelis take charge and strike first?  If the U.S. lost an aircraft carrier or two, would the conflict turn nuclear?  These are all real world questions with catastrophic implications for the fragile Western economy that is cocked full of insolvent banks that use phony accounting to stay afloat.  If real war breaks out, the charade will be over—pronto.   

I am not advocating war–just pointing out that war is coming unless something is done to avert it.  If war does come, it will be bloody on both sides.  The Iranians surely possess sophisticated supersonic Chinese and Russian missiles that are capable of sinking an aircraft carrier.  The Iranians, also, probably have Russian torpedoes that travel at speeds of at least 200 miles per hour—underwater!   Check out this example of a Russian torpedo that can sink vessels above and below the water.   

Does the U.S. have countermeasures to Chinese and Russian missiles and torpedoes?   Yes, but no countermeasure is 100% effective.  It would be naïve to think the U.S. could come out of this conflict without a loss of vessels and lives.  The U.S would win the war, but the world economy would collapse in a matter of days if the saber rattling turned into full metal-to-metal contact.  An imploding global economy would happen in Internet time and would make the Great Depression look like a party.

Related Posts:

• The Hormuz Wild Card
• Is an Attack On Iran Imminent? If So, Then What?
• Weekly News Wrap-Up 12.30.11
• Iran War is Only Matter of Time
• The 2 Biggest Geopolitical Wild Cards in the World

rt.com
JANUARY 30, 2012

Uploaded by RussiaToday on Jan 30, 2012

The military build-up and economic sanctions against Iran are designed to unleash a global war from the Mediterranean to China with unpredictable consequences, warns Michel Chossudovsky, Director of the Centre for Research on Globalization.

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rt.com
JANUARY 18, 2012

Uploaded by CapitalAccount on Jan 18, 2012

It is looking like the greek government may not be able to pay its bills in march as Athens is trying to renegotiate it’s bonds with investors who may need to take an even larger haircut than originally envisioned. In addition, labor unions are negotiating on proposed labor cost cutting. So how will this greek tragedy play out? No one seems to have any idea, so what does this mess tell us about the sanity of those who claim to be in control of this crazy economic world we’re living in? Are technocrats and european leaders just trying to force a bankrupt ideology down the throat of insolvent governments for the benefit of a small clique of bankrupt european banks? Maybe bankers and politicians need psychotherapy and not a haircut? Well, to answer these questions, we turn to Yanis Varoufakis, Greek Economist and author of “the global minotaur: America, the true origins of the financial crisis and the future of the world economy.” He will also speak to us about the LTRO, and the way that it has been used to fund banks as opposed to the sovereign governments that were meant to benefit from the scheme. And, a ban on proprietary trading for big banks was debated in congress today — it’s known as the “volcker rule,” and its part of the dodd-frank legislation passed in 2010. Lobbyists and some big bank executives have come out against it. We’ll break down what’s really at stake. And finally, as US president barack obama has been out pushing “insourcing” with his jobs council…just as a new report comes out showing at least one of the very corporations represented on that council is outsourcing more jobs and R&D to Asia. What is the deal — we’ll hash it out.