Iran and Investing in Asia: Crazy Talk
A Daily Reckoning White Paper
by Dan Denning
Iran and Investing in Asia: Mahmoud Ahmadinejad
A lot of people would like to dismiss Mahmoud Ahmadinejad as a lunatic, as if that saves us the trouble of having to figure out what to do with the current president of Iran and his seemingly unstoppable nuclear program. Ahmadinejadhas certainly said the type of things that circumspect world leaders try to avoid – namely that Israel should be wiped off the map or moved to Alaska and that the Holocaust may not have happened and that Iran could choose to use oil as a weapon if the West tries to impose sanctions.
Iran and Investing in Asia: Is he crazy?
Is he crazy? Or is it just crazy talk? I don’t know. He’s claimed that for 28 minutes during a speech delivered at the U.N. in September, he was surrounded by a halo of light and that no one in the audience blinked while he spoke. Later in November, speaking to a group of clerics in Tehran, Ahmadinejad claimed that the main purpose of his government is to pave a path for the return of Islam’s 12th Imam, Mahdi. Shia Muslims, from what I can gather, claim that the 12th Imam disappeared in 941 and upon his return will rule the Earth for seven years before a final last judgment of humanity.
What do we have here, then? The leader of a nation determined to pursue its nuclear program and who believes he is helping to usher in the end times is scary stuff, or so it would appear. It is scary enough that it provoked French President Jacques Chirac to make one of the most remarkable statements in the last 50 years of public diplomacy.
In case you missed it, here’s what Chirac said at a speech delivered from a French naval base:
“The leaders of states who use terrorist means against us, as well as those who would consider using, in one way or another, weapons of mass destruction, must understand that they would lay themselves open to a firm and adapted response on our part. This response could be a conventional one. It could also be of a different kind…Against a regional power, our choice would not be between inaction or annihilation…The flexibility and reactivity of our strategic forces would enable us to exercise our response directly against its centers of power and its capacity to act.”
Iran and Investing in Asia: Should we laugh or cry?
When this story was first reported, a lot of people laughed. It’s easier to make jokes about French power and dismiss Chirac as a politically hobbled blowhard than figure out what the comments really mean. What the comments really mean is quite clear: France would consider a nuclear attack against a state sponsor of terror, like Iran, that aided or abetted an attack on French soil. Remember those riots outside Paris last year?
Do you think all of that discontent just went away? Do you think that resentment from years of being frozen out of official French life evaporated with a few thousand torched cars and busted windows? No, I don’t think so, either. I wrote at the time that things would be quiet in France for a while, but that it wouldn’t surprise me if an outside party calmly and quietly moved into France in an attempt to organize the French rioters into a genuine and very dangerous French intifada.
Yet more crazy talk? Who could make that sort of thing happen? Let’s see, which country has bankrolled and sponsored Hamas and Hezbollah? That’s right, Iran. Would Iran really try to export and bankroll a rebellion in France? I can’t say that I have any conclusive proof of it.
But knowledge of an attempt to do so seems like the sort of thing that would prompt a man like Jacques Chirac, whose country has billions invested in Iran, to publicly threaten a nuclear strike.
Now would be the time for another good joke to lighten the mood. But we have to dig a little further to see what all this means. The truth is, there are nations of the world that might very well like to see Iran succeed in developing nuclear power, and, later, a nuclear weapon.
If you feel like things are rumbling out of control and that something big and important is happening, well, then, you’re not alone. But what does all of it mean for gold, for the dollar, for oil, for America? In fact, is there more at stake than just the price of oil? Are the social and economic structures that have defined the world since the end of World War II about to collapse? What will replace them?
Iran and Investing in Asia: Three Major Trends
When I got back from my excursion to the Far East in late 2004 and sat down at my desk in London to write up the story, I emphasized three major trends that would create danger and opportunity for investors. First, the bull market in energy (oil, gas, electric, nuclear) was going to be one of the longest and strongest you and I would see in our investment lifetimes. The big drivers are the growth in demand from China and India.
Second, the general rise of Asia into the developed world was causing huge demographic and economic dislocations - and creating enormous investment opportunities as Asian economies began to consume as well as produce, to spend as well as save.
Third, I wrote that the rise of the East was accompanied by the simultaneous collapse of the ruling currency regime of the last 30 years, the dollar standard. This last point is still so inconceivable to many people that they refuse to entertain the possibility. Too much would have to change. Too much wealth would be destroyed.
Too many vacations would have to be canceled. Yet the inexorable rise of gold shows that this revolution in money is slowly but surely eroding the dollar’s status. The current situation with Iran doesn’t change any of those three main trends…But it could accelerate them.
Dan Denning
for The Rude Awakening
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Related Articles on Iran and Investing in Asia:
Between The Devil And The Deep Blue Sea – 2/16/2006
by Justice Litle “Iran controls the critical Strait of Hormuz, a geographical oil chokepoint through which 40% of the world’s oil travels in any given year.”
The Oil Plans of Iran – 1/16/2006
by The Mogambo Guru “Instead of an American-controlled oil market and American friends and insiders getting rich making their slimy little backroom deals, now it will be an Iran-controlled oil market.”
Related Links on Iran and Investing in Asia:
Investment International – Investment International has information on investing in asia and news articles
relating to all offshore topics.
ASrIA - Not for profit, membership association dedicated to promoting corporate responsibility and sustainable investment practice in the Asia Pacific region.
Wikipedia – Mahmoud Ahmadinejad
South China Morning Post - Hong Kong’s English language newspaper, bringing you Asia’s best daily news and business updates.
Yahoo! Finance – Get stock quotes, market news, mortgage rates …At Yahoo! Finance, you get free stock quotes, up to date news, portfolio management resources, international market data, message boards, and mortgage rates
NASDAQ Trader – NASDAQ Ten Most Active Share Volume. Latest Trading Halts.
