After presenting you with the setup of the game theoretical modeling of a nuclear exchange between Israel and Iran, I am going to let it rest for about a week. This is a general procedure I have followed for over a decade with academic and, in this case, semi-academic papers. For some reason, a week is a period during which your subconscious processes and reorganizes theoretical models in your mind. My friend, now a professor of finance, actually taught me this procedure.
The main finding of my preliminary analysis is that the outcome of a nuclear exchange between the two countries will be determined by:
Initial conditions.
Commitment of the non-nuclear party (Iran).
What I mean by “initial conditions” are the capabilities that remain in both countries after the nuclear escalation commences. Commitment is crucial for the non-nuclear party (Iran), as the (direct) destructive power of her weapons is not so great, like those of the nuclear-armed party (Israel).
There also seems to be no rush to finish my model, as President Trump seems to have, once again, postponed the timeline for the “destruction of Iran.” The mainstream media is also catching up to what’s truly going on.
How will the war with Iran end? (Mar. 13), I noted that:
What I mean by this is that I consider it likely that President Trump will save his ego before the “U.S. empire.” This implies that it will be more important for him to show that he’s a great economic leader than what happens to world dominance by the U.S. (more so because it will not have the time to fully collapse during the remainder of this term). And this implies that, when markets and the economy truly start to tank, he will create some narrative to end the war (declare “victory” or “mission accomplished”) and even pull the U.S. troops from the Middle East, if needed.
Everything that has happened since has just made me more confident that my assessment was correct and that we’ll probably see the end to this war when the economy starts to tank. Let’s see. Speaking of which…
January home sales were naturally totally unaffected by the war. Maybe our forecasting model has been correct all along on the looming collapse of the U.S. economy, even though I have kept on doubting it? We’ll know soon enough.
We also published a major geopolitical Weekly Forecasts of GnS Economics yesterday. I extended my Grand (Unified) Geopolitical Theory there, while Patricia provided an update on the capabilities of Iran. Patricia has agreed to write us weekly from henceforth, which will add considerable depth to all our geopolitical analyses. :)
Over the weekend, we will learn whether President Trump makes yet another “surprise” move in Iran. This move could be an attempt to gain control over some of Iran’s nuclear facilities or an island in the Strait of Hormuz. I don’t think it is Kharg Island, because the U.S. troops would become sitting ducks there if they ever made it to the island. Moreover, if they were able to seize it, Iran would simply turn off the oil flow in the pipeline leading into the island and start an “artillery hunt” for U.S. soldiers. Some military analysts suggest it could be Larak Island, which is one of the current control points for the entry to the Strait. We need to acknowledge that any such action could lead Iran to take over the coastlines of Bahrain and the UAE and to seize U.S. assets with commando strikes across the Middle East.
The (dire) repercussions of the closure of the Strait of Hormuz are also becoming visible. Shell has warned that an energy crisis could hit Europe as early as next month. Australian farmers have reported that they’ve run out of diesel. Gasoline shortages are appearing across the East, and airlines have started to cancel flights. Most unfortunately, like we warned already two weeks ago, this is just the beginning.
I will now start to run some statistical analyses leading to updated forecasts of gold and the global economic outlook. I want to send you into the weekend with my conclusion from yesterday.
The Straits Times reported that the mission capability of the aircraft carrier had been questioned:
That means it is not clear how well the Ford – and other ships in its class, which have yet to be delivered – can detect, track or intercept enemy aircraft, anti-ship missiles or small attack aircraft.
I am sure it was just a laundry fire and not, for example, an Iranian surface missile that rendered the most modern and largest aircraft carrier inoperable. Right?
It is not going well for the U.S. against Iran, but this is exactly what many U.S. generals and analysts warned would happen. Play stupid games, receive stupid (and macabre) prizes.
Have a great weekend,
Tuomas
P.s. I would fill up every tank I have now. You should also acquire crucial medicines and plastic necessities. I would also keep at least a month’s worth of cash at home.
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