Weekend Reading: Iran? Bomb? Silence…

Although I don’t have a formal education is psychology, my study of political science, and specifically war theory has in many instances led me towards the study of how leaders, politicians, soldiers, and the public react to certain realities.  It really boils down to this.  People seem to yell, scream, and complain about things and situations they believe are able to be changed or altered in some way, but once they believe hope for that change has been lost, they become silent.

I have written here, extensively and often, about my belief that Iran will eventually acquire or build a nuclear weapon within the next 5 years.  They will most likely chose the same route of walking up to the line of being a nuclear weapons state, and then become purposely ambiguous, the same strategy Israel used.  They will announce the capability of producing a nuclear weapon, but never admitting to having built one in order to remain a part of the nuclear non proliferation treaty.

Over the past few weeks, news is beginning to leak out of the United States government regarding internal memos within the joint chiefs of staff admitting two very important things.  First, the United States does not have the ability to prevent Iran from acquiring the ability to build a nuclear weapon which it will in all estimations go forward with building.  And Second, the United States does not have a strategy thus far to deal with a nuclear armed Iranian state.  This should not be a surprise, I’ve said as much for a long time now, what is interesting though is the timing and reaction of these leaks.

Many forget so quickly the United States’ strong position in the early 70’s against Pakistan building a nuclear weapon.  At the time, sentiment regarding Pakistan was very similar to that of Iran today.  Both the public and many throughout the government and military believe that if Pakistan was allowed to build a nuclear weapon, it would be a grave threat to the western world, an atomic bomb in the hands of a Muslim country that was far from being cooperative with the western world.  What we’ve seen since, is a government in Pakistan that has largely retreated in upon its own borders, has no been a nuisance on the global stage, and has many more issues internally than it can deal with, let alone causing trouble beyond its borders.

This is typical of volatile states which acquire nuclear weapons, they become less volatile, often retreat inside their borders and become more responsible global actors.  I’m not saying that Pakistan is or should be considered a role model state, far from it.  Pakistan is two steps away from being a failed state, it has no control of its borders, its central government has little control over its territory, and its culture breeds a particularly scary breed of Islamic radical ideology and hate for western culture.  But if we are looking specifically at the question, has attaining nuclear weapons capability made Pakistan a more dangerous and volatile actor on the international state, the answer is a resounding no.

So what is it that I’m trying to say here?  First, with regards to Iran, we’re beginning to see a repeat in the line of events which led to Pakistan becoming a nuclear weapons state.  We’ve seen our politicians and military officials go from being vehemently against allowing Iran to acquire a nuclear weapon in very vocal ways, to a terse admission that we have no good options for denying them this ability.  In the past few weeks as this news has leaked out, we’ve seen the government, military, and even the press become very silent on the issue.  You would think that this type of supposed shift in thinking would be a huge news event given how loud the rhetoric against Iran has been in the past, but no, silence.  Honestly, I don’t believe this is much of a revelation for anyone in the higher offices of our government or military.  They have consulted the best think tanks and policy experts here, all of the literature and historical evidence has for some time been largely against the ability of the United States to deny this capability to Iran.  It is only now that certain elements within our government and military are making public their feelings because they believe Iran has truly crossed an important threshold.  If the government continues to speak out loudly, saying that it will not allow Iran to acquire this capability under any circumstance, it will look the fool when the inevitable happens.  So now, quiet will reign as we tacitly admit to having no good options.  And while more questions than ever should be asked by our press regarding what strategy and tactics we will be using once Iran achieves the inevitable, there is silence.

Second, in opposition to everything you will hear publicly from our government, Iran will become a more stable actor on the international stage once it acquires the capability to produce a nuclear weapon.  As a Jew, and someone who would be considered a conservative in Israeli politics, you would think that among everyone I would be the most disturbed regarding Iran achieving this capability.  But when looking at all of the evidence we’ve compiled on the issue, it seems that Israel may even stand to benefit from this happening.  I would expect that Iran’s support for proxy military actors including Hezbollah and Islamic Jihad will diminish.  Iran’s cosiness to other volatile and failed states will also diminish as it no longer sees the needs for these relationships given its new deterrent capability.  Other states within the Middle East region including Saudi Arabia and Egypt will draw closer to Israel and western powers as they fear Iran’s expanding influence.  This fear goes against the historical record of actions by new nuclear states, but to say it’s irrational would be wrong.  Saudi Arabia will have much to fear of a nuclear Iranian state, and will most likely seek to either start a nuclear program of its own, or look to the United States for an assurance of their nuclear umbrella.  In either case, the United States will most likely agree to help in exchange for a change in certain relationships within the region pertaining to support for certain militant groups and its relationship with Israel, energy guarantees, and political reforms.

Iran will slowly but surely reveal its actions to be more nationalistic than religious.  They will become a more rational state actor as they join the small group of nuclear armed states who by the way, have never fought a direct war with one another, let alone used a nuclear weapon on one another, this will not change.  Don’t get me wrong, it is not the optimal outcome to see Iran achieve this ability, even given what I have written above.  But when you make policy it’s important to look at the facts instead of ignoring them in order to support rational or irrational fears.  I have confidence in our leaders, both political and military, that they understand those facts.  We will continue to hear silence from them as it is not politically palatable to admit the obvious here, just as it wasn’t with Pakistan.

Here is your weekend reading:

The Great Reflation may have come to an end last week with Europe seemingly entering a deflationary period, again… (Investors Insight)

The Fed better get on it’s horse because it’s my belief that the window for selling this piece of crap assets is closing, quickly (Slate)

A great great great article on the empirical evidence for momentum investing and its implications (Financial Advisors Magazine)

Finally the FCC gets serious and is ready to institute net neutrality (Fred Wilson)

This is kind of interesting, I’d like to know what you all think, oh, and the name, yea, wouldn’t have been my pick (Guzzle.it)

The S&P 500 futures contract bid ask was 10 handles wide at one point on Thrusday, this is the most liquid investing instrument in the entire world, that’s nuts, just listen to the audio from the pit (Zero Hedge)

The part about the printer is absolutely hilarious (Kid Dynamite)

Chinese naval power expansion is a natural outcome of their need to protect economic interests around the world, THIS IS A GOOD THING, they will slowly take pressure and responsibility for global stability off the United States’ shoulders, I repeat, THIS IS A GOOD THING, another strong rational economic actors is needed (NYT)

More on rare earth metals, this is an outside the box investing theme, I will do more research (NYT)

China’s economic interests could be very very good for stability in Afghanistan (Eurasia Daily Monitor)

Want an investment theme, Chinese car makers, $CAAS (Thomas Barnett)

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