MKT 022307: IRAN

Continuing from my AM TAPE: 022307, except for CPI, “subprime loan default”, IRAN may be the main jitter for mkt today. Stocks are down, bonds up (partially due to “safe haven” effect), gold & oil up, and USD down.  Have we had this last year?

Let’s look at IRAN.

1. As geopolitical challenge to the West

Iran is a large country with rich oil located in the Middle East, Central Asia and the Caucasus. Its area equals the size of the United Kingdom, France, Spain, and Germany combined. Iran borders Armenia, Azerbaijan (including its Nakhichevan exclave) and Turkmenistan to the north, Afghanistan and Pakistan to the east, and Iraq and Turkey to the west. In addition, it borders the Persian Gulf, across which lie Kuwait, Iraq, Saudi Arabia, Bahrain, Oman, Qatar, and the United Arab Emirates.

2. As a religion and a civilization challenge to the Christianity

The challenge to the West from Iran, officially the Islamic Republic of Iran, one of the world's oldest continuous major civilizations,   is more profound at religion and social system level. The feud between Islam and Christianity, the two most aggressive and powerful religions in history, is almost as old as the human religion itself, and a victory has yet to be declared.

3. As a challenge to the rest of world

Iran’s challenge to the world started with Iranian Revolution, when the leader of the revolution, a Shi`i Muslim cleric and marja (religious authority) established an Islamic republic in Iran.  Khomeini's new Islamic state instated conservative Islamic laws and unprecedented levels of direct clerical rule. This was alarming and still is, I think, to the rest of world. 

Yes, in essence, the state is never a “free people’s state”; it is always an institution “used to hold down one’s adversaries by force” (Engels). However, history has made some progress in establishing and managing state power, at least on surface and to some degree, such as separation of religion from state, market economy, and political votes, etc. Iran’s clerical state represents the total totalitarian form of state in today’s world, which I assume, is even rare in recent history.

That is probably one of reasons, even though may be a less important one, that the world is behind Saddam Hussein  during Iran-Iraq War (1979–88), even though it was Iraq who invaded Iran: Iraq was financially backed by Egypt, the Arab countries of the Persian Gulf, the Soviet Union and the Warsaw Pact states, the United States (beginning in 1983), France, the United Kingdom, Germany, Brazil, and the People's Republic of China (which also sold weapons to Iran). All of these countries provided intelligence, agents for chemical weapons as well as other forms of military assistance to Saddam Hussein. Iran's principal allies during the war were Syria, Libya, and North Korea. (quoted from wikipedia).

“Is this time going to be different”? It is just as tough for Iran as for US and international society. But the odds of Iran prevailing is small.