US President Donald Trump has confirmed that the United States has bombed nuclear sites in Iran
Well, it is now on for young and old.
We’ve been here before haven’t we……..
The world’s preeminent military power threatening a strike against a Middle Eastern nation known for fomenting trouble. The message for the world watching on is ‘short sharp shock’ and everyone can then relax in peace. But does anyone in the cold light of day actually think that is a remote possibility? History tells us the move is doomed to failure. It also tells us that in 2025 and beyond, we are talking Trillions of dollars. Let us look at the scoreboard.
Just under 4 years ago, in August 2021, the nations of the developed world, led by the US, evacuated Afghanistan in a hurry. That evacuation put an end to approximately 20 years of US and NATO (and others, including Australia) involvement in the country. The Afghans who shunted the developed world out the door were one and the same as those who had been shunted out the door in 2001. The total cost to the Americans of that 20 year interlude for the Afghans was about $2.3 Trillion dollars.
For those too young to recall, that Afghanistan occupation stemmed from the terrorism of 11 September, 2001, when some Al Quaida inspired terrorists hijacked and flew civilian aircraft into the World Trade Centre in New York, to go with one into the Pentagon in Washington DC, and another which crashed into some fields in Pennsylvania when the passengers decided to go down fighting. Keep in mind the idea of going down fighting, it will come back.
To stick with 2001, the response of the United States was to militarily strike and invade Iraq. There was the question of why Iraq, when the Al Quaida leadership openly despised Saddam Hussein. But a world which was sold on the idea of Saddam having Weapons of Mass Destruction, looked the other way as rationale went out the window and either did nothing or actually supported the subsequent invasion with troops or military support. John Howard’s Australia was one of those and the subsequent cost of the Iraq invasion and subsequent US led military presence up until the time the Iraqis were left to run themselves. The cost of American involvement in Iraq and its next door neighbour in Syria was about $2.9 Trillion.
Now that is just the first two, most obvious, wars to look at. We could add to that mix the involvement on Libya since circa 2010, the hitouts with the Houthis in Yemen, go back a bit and tote up the cost of the first Iraq war in 1990. Then of course we could throw in a couple of generations worth of engagement in support of Israel and wars in the 70s, 60s and 40s, as well as the armaments provided to make Israel the bulwark of hard nosed assessments about threats to its existence in a neighbourhood devoid of shrinking violets that it is.
So that we dont give the idea this is an anti Israel cogitation it would be remiss not to identify that their neighbours in Syria drop chemical weapons on their own people, that their neighbours in Lebanon blow up their own beautiful capital city with their fertilizer storage practices, and that their neighbours in Saudi Arabia dont mind sending consular officials to dismember overly critical journalists. It can also be acknowledged that while they may have gone completely over the top in levelling Gaza they were responding to attacks on Israel made by Hamas, and that they also navigate dealing with Iran funded Hezbollah, who had never quibbled about attacking Israel at any point they deem appropriate.
In a geopolitical sense it is not a world for the faint hearted. The only point we need to take away is that every last representative of every last regime in that world will be representing a preparedness to fight, and to be a touch cold blooded about the idea of revenge for well established notions of historical military or political mistreatment.
At that point let us go back to thinking Iraq (population circa 45 million) and Afghanistan (population circa 41 million). Their combined populations dont add up to the population of Iran (circa 91 million). Then, while thinking about numbers of people, just keep in mind that the Pakistanis, bordering Iran and Afghanistan, number circa 247 million. They are close to the Chinese and have just had a minor altercation with India, who both have billion plus populations.
The reason for this post is that Israel and Iran are exchanging munitions with one another, and now US President Donald Trump has joined in on the Israeli side. It also appears that the US administration and European nations are in some sort of discussion about who runs Iran if they can remove the current administration.
The reason for this post is that replacing the Iran administration is likely to be humongously expensive. And a zillion other implications get bigger by the moment.
US Debt for starters:
That presumably means impacts on every currency and capital market for the coming days. Starting with crude oil and the very large volumes of fuel coming out past the Straits of Hormuz. May be worth considering filling up today.
Then there is the not insignificant matter of whether President Trump had the constitutional powers to do what he has done.
It can only be assumed that with the US now firmly engaged in dealing with Iran other nations, lets start with China eyeing Taiwan and Russia in Ukraine, will be weighing up the implications elsewhere.
Net zero and the idea of reducing carbon emissions might get a buffeting here.
It could add to enthusiasm for migrating to Australia, provide a boost for real estate assets…..
….and Mr Albanese and Mr Chalmers, could not the extraordinary circumstances underpin a need to (regrettably) reserve gas on the east coast for a while? Carpe diem……
Hold onto your hats.