Why Iran might loose every battle and still win the war

 I am old.  I am old enough to remember the Iranian revolution, and the US embassy being taken over and 55 Americans held for 444 days.  While I know this might sound crazy, the Iranians really put their thumb on the scale of the US elections---had they released the hostages in October or had the mission to use the military to free them work Carter might very well have won reelection and we never would have had a Reagan presidency.  How different would the US have been with no Reagan presidency, who knows but I am sure the answer is VERY.  Instead the mission failed, and the hostages were released the day Reagan was sworn in.  A middle power middle east country swayed the US presidential elections--that is some serious power.

Fast forward to today and our military has crushed the Iranian military and yet Iran might have even more power to influence American than in 1979.  Since the start of the war the price of oil has gone up about 30%.  Predictions of a global recession or even depression are commonplace.  Expectations of future interest rates have gone from cuts to hikes as higher energy prices feeds through into broad inflation expectations.  But here is the difference no one is talking about.  In 1979 US total debt to GDP ratio was 31.6% while today it is 122.6% (i.e. almost 390% higher).  The dog that hasn't barked is America's ability to fund our borrowing--but if that is ever going to be an issue it might be when American pursues a war of choice not necessity while also beating up our allies with tariffs and threats to NATO while China takes a hard look at taking over Taiwan.  If ever there was a time for foreign individuals and governments and asset managers to go on a buyers strike this is it.  And while the DOD (or is it the Department of War) asks for an additional $200 billion to fund the war in Iran the question that no one is asking is who will loan us that money.  And at what price.  

While Iran helped swing the 1980 elections to Reagan in 2026 Iran might create a blue tidal wave.  The big difference is this is of Trump's making while Carter born no responsibility for the Iranian revolution.  Also Trump has taken the world to the brink of WW3.  If you are not worried about China being concerned about American controlling the Strait of Hormuz you should read a bit of history about Japan's motivation in 1940.  See below.

Oil was the primary catalyst for Japan starting World War II in the Pacific. Facing a 90% dependence on foreign oil imports and a total U.S. embargo in 1941, Japan launched a "southern strategy" to seize oil fields in the Dutch East Indies. This move meant seizing territory and attacking the U.S. to ensure, rather than run out of, fuel for their war machine

Iran --some thoughts

 First things first, I really hope that our attack on Iran leads to a stable, healthy, democratic, region where all people are treated with respect.  Of course our partner Israel (maybe even our leader if Rubio is to be believed) in this war does not pursue such an with Palestinians, but that is a story for another time.  Also I am old and remember the Arab Spring and our previous attempts at bombing our way to democracy and its failures.

Things to think about:

1.  I believe the most likely outcome of our war is a failed state in Iran.  Historically which has been more dangerous, a failed state or a state sponsor of terrorism?  Answer--a failed state.  The 9/11 attacks came out of a failed state and is the only time in the last 75 years there has been a mass causality event on American soil from a foreign actor.  Also how much trouble could a failed state located on the strait of Hormuz cause?  A lot.  Bottom line, a bad acting state is bad, anarchy in a geographic important location with lots of arms and oil and hate towards America might be a heck of a lot worse.

2.  Who is winning right now?  China.  A classic blunder is trying to fight two wars at the same time, and China is watching us burn through munitions to destabilize the Middle East.  We are told that we needed to attack Iran because they were weak and we had actionable intelligence that their leadership was gathering.  I wonder if China is taking a hard look at Iran and our force readiness and thinking, China is  never going to have a better time to take Taiwan.  If I was in Taiwanese leadership I would be hiding under ground and have the country at Defcon 2.

3.  You know what Trump and the GOP never talk about any more---the US debt.  First came Trump's BBB which is projected to add $4 TRILLION to our debt over 10 years ---while cutting Medicaid and crushing rural hospitals resulting in 10-50% increases in the cost of health insurance.  Then Trump decided to bomb 7 countries and who knows how many boats in the Caribbean.  He also decided to deploy the National Guard in American states and the Capitol in a show of force to intimidate Democrats.  All of these things cost money.  We will be lucky to see our debt grow by only an additional $4 trillion over the next 10 years.  Of course with a President whose businesses have declared bankruptcy 6 times, worrying about how the bills get paid is not on his to do list.  For the rest of us who will pay the bills it should be.  With  America  burning through goodwill as fast as we are burning through Patriot missiles, is it possible that the OPEC countries decide to buy fewer US bonds in the future.  Hell yea.  While I don't foresee all foreign countries deciding to sell all their US government bond holdings is it possible or even likely that they decide to cut way back on future purchases which will correspond with our ever rising borrowing needs.  Yes, indeed.

Finally a bit of education for all those arm chair middle east experts in the GOP (I've lost track of the number of GOP members of Congress who don't know this) Ali Khamenei was killed this week.  He lead Iran from 1989. Ruhollah Khomeini lead Iran from 1979-1989 and was responsible for the fall of the Shah, the take over of the US embassy and the 1983 bombing in Beirut.  Every time I hear a GOP senator telling me that Khamenei has been in charge since 1979 I want to scream that maybe just maybe before risking American lives, the global economy and our military readiness you should read the cliff notes on the Middle East (PS Iran is mostly Shia Persian and the states surrounding them are Arab Sunni and they don't like each other.  As a matter of fact they have been at each other's throats off and on for about.....1400 years.  So don't be so surprised when Iran decides part of their plan to share the pain includes attacking their Arab neighbors.)