"It would be silly if we waited until things were not available," said a veteran energy trader at a U.S. hedge fund, who spoke on the condition of anonymity to protect his business relationships. He said traders have become convinced that military conflict between the United States and Iran is inevitable. He added, "People react to perceptions of what will happen. That's not idle speculation."
Menzie Chinn provides some analysis and offers this thought:
Of course, if one believes these threats are necessary, then the higher oil price is the price of pursuing our foreign policy. If one believes that Iran's acquisition of nuclear weapons is off by many years, then the pursuit of this diplomacy via threats is a costly diversion. Or it's even counterproductive. Indeed, with each dollar's increase in the price of a barrel of oil, an additional $3.7 billion is transferred (on an annualized basis) to the oil exporting countries (including Iran, Russia, Venezeula, Saudi Arabia, the Gulf States).
Menzie has a point – but let me suggest that this is the price of a really bad foreign policy.
2 comments:
Gosh, I was going to post on this, but that is OK. I shall simply remind everybody that while people like Jim Hoagland (WaPo yesterday) are declaring that it is certain that Iran is building nuclear weapons, there is no clear evidence they are, and plenty that they are not. The IAEA declares there is no such evidence, and they were right about Iraq, against the rantings of Bush et al. Furthermore, there is that minor detail that the Iranian Commander-in-Chief and Supreme Jurisprudent, Ali Khamene'i, has issued a fatwa against nuclear weapons. He is the one in charge, not "I'm-a-dinner-jacket," although most observers would not know this from the hysterical US meda. All of these guys are proud that they are pursuing a peaceful nuclear energy program and are not pursuing nuclear weapons.
Barkley
THE LORD KNOWS
They call it "saber rattling" but
It is much worse than that,
This goading and provoking, taunt,
Intimidation--flat
Display of irrevocable
Hostility that none may quell.
My people, you have earned from me
With never a mot juste,
Full savor for hostility
In my returned disgust:
Fie upon ye, Americans--
My people in macabre danse.
It is not "carry a big stick,
Talk softly," but instead
Those words you use, so lunatic
As would offend the dead,
But warrant ye, so to inter
In an unchristian sepulcher.
Henceforward let me no more pledge
One nation "under God,"
Because, while specious words allege,
Convoked the deil´s synod,
It will return to haunt ye, and
Disrupt the best which ye have planned.
By taunts, as stirring fears and hatred
Comes never any good:
Corrosive drips that bile; nor flattered
Be, as if any should
Allege that ye were Christians so:
Though ye may not, the Lord doth know.
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