Military Keynesianism & Iran

From the Guardian:

Washington is stepping up attempts to isolate Tehran after accusing factions in the Iranian government of a plot to assassinate the Saudi ambassador to Washington on US soil.

The US announced new economic sanctions against five Iranians, including four senior members of the Quds force, the special operations unit of the Iranian Revolutionary Guards, which American officials have implicated in the alleged plot.

Sanctions were already in place but the US secretary of state, Hillary Clinton, said a “very strong message” needed to be sent to the Iranian regime.

She said she and Barack Obama want to “enlist more countries in working together against what is becoming a clearer and clearer threat” from Iran.

What was that someone said about war being the easiest way to wipe the debt clean? Instilling a sense of purpose in divided, angry and confused populations? Creating humungous profits for the military-industrial complex?

Oh yes!

From Marc Faber (via Zero Hedge):

The problem I have with the investment universe is that I find it difficult to envision how the US and western Europe can return to healthy sustainable growth without a complete purge of the financial system and some type of catalyst. Something that restores some measure of social cohesion among people;  it could be hyperinflation, a complete credit market collapse, widespread sovereign defaults, civil strife, major military confrontation.”

As I have continuously noted since the very beginning, America has a hell of a lot to lose through drift (not least the dollar-denominated status of energy and resources) — power is drifting Eastwards, and an increasingly indebted, self-doubting, nihilistic and stagnant population is shifting America from its cherished status as world policeman to that of a second-rate economic power.

Simply, all the capital that America has exported in exchange for the Nixonian energy and consumption free lunches will come back to buy up American productive assets.

No amount of nuclear weapons, and no amount of currency manipulation allegations can save America from this fate.

So Washington’s present rationale might well be that with Eurasia strengthening and uniting behind an increasingly untrustworthy, authoritarian and anti-American set of leaders (Ahmadinejad Putin, Wen), now might be the last chance America has to preserve American imperial hegemony (and the dollar as the global reserve currency). Throw the dice, sell some weapons, shake the barley, see where the chips land.

After all, if the people of Eurasia want (American style) democracy and capitalism, a regional war would be the best chance that they have of taking the Arab spring up an echelon, and onto the streets of Tehran, Beijing, and Moscow.

The problem with that great-American-hope is that it’s not the people of Eurasia who seem to have a problem with their government, but the people of America. For better or worse, Eurasian autocratic dirigisme seems to be yielding better economic results on the global stage than American-style liberal democracy.

After the dust settles and the debt is purged we can again walk the road to sustainable economic development. The problem, and the great worry, is getting there.

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