For some reason, I can't post a comment under the thread that discusses we are about to hit Iran, so I'm doing this diary to examine some of the possible "fallout" (and I hope I'm speaking figuratively here) of the psycho twins bombing Iran.
With regard to bombing Iran, the biggest problem are the Chinese. They have been working hard with Iran to ensure that they are one of the major recipients of Iranian oil.
http://www.washingtonpost.com/...
http://www.washingtonpost.com/...
http://www.chinadaily.com.cn/...
In short
"China, which will need vast amounts of additional oil and gas to fuel its red-hot economy, is paying particular attention to Iran. According to the Department of Energy (DoE), Iran supplied 14% of China's oil imports in 2003, and is expected to provide an even larger share in the future. China is also expected to rely on Iran for a large share of its liquid natural gas (LNG) imports. In October 2004, Iran signed a $100 billion, 25-year contract with Sinopec, a major Chinese energy firm, for joint development of one of its major gas fields and the subsequent delivery of LNG to China. If this deal is fully consummated, it will constitute one of China's biggest overseas investments and represent a major strategic linkage between the two countries"
Given their intense economic interest in Iran, I can't imagine they would stand by and watch the US bomb their economic future without some form of military or, more likely, economic response. In fact, I'm assuming Iran will demand this of them as a condition to continued oil and natural gas sales.
So what could China do? About a month ago, in response for US calls for the Chinese to unpeg the yuan from the dollar China threatened to start selling off foreign reserve dollars and everyone sat up and took notice. Why?
"...such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.
It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds."
"He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.
"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds[1.2 trillion dollars to date ], contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings"
http://www.telegraph.co.uk/...
And that my friends is the money quote, so to speak. China contributes significantly maintaining the dollar in the position of reserve currency.
What all this means is China could, in defense of Iran, crush us without firing a shot.
However, given that China makes alot of money off the crap they sell to us through proxies like Wal-Mart the question remains, will they? My answer is yes. China has proven themselves to be very long term thinkers and will have likely planned for this eventually. They will have already weighed the their long term energy security against the value of maintaining ecomomic ties with the US. Given that they can sell their stuff elsewhere in the world but can't function without energy it seems like a no brainer. And lest we forget, China is a communist nation. If they tell their people to buck up and put up with some financial discomfort, they will. If they don't, they will simply kill or imprison the troublemakers.
Now, one would think the psycho twins know this stuff. But as we all know, they are very stupid and have never shown any compunction when it comes to gambling with our lives, livelyhoods and laws. Its going to be an interesting September.