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"Next Year's News This Week" Dire straits: Hormuz inflation, asymmetric warfare, and manufactured crisis By Evan Anderson __________ Why Read: The attack on Iran by the US and Israel has opened up an extremely risky strategic paradigm in the Persian Gulf. Putting allies, the global economy, and global stability at risk, the two nations appear to be aiming for regime change in Iran. Whether that will happen remains an open question. In the meantime, the closure of the Strait of Hormuz puts the entire Asia Pacific region at risk, with one exception: China. Read on to learn why this is the case, and what it means for the next few months. __________
"What say'st thou to me now? Speak once again." "Beware the ides of March." "He is a dreamer; let us leave him: pass." - William Shakespeare, "Julius Caesar" The trade-offs facing policymakers in Washington, Beijing, Brussels, and Moscow can be thought of as an impossible trinity consisting of economic interdependence, economic security, and geopolitical competition. Any two of these can coexist but not all three." - Edward Fishman, Chokepoints: American Power in the Age of Economic Warfare If you don't know where you're going, you'll end up someplace else. - Yogi Berra
Claiming varying justifications, the first surprise strikes by the United States and Israel on Iran were swift and devastating, burying what remained of the country's nuclear program and much of its leadership in just a few days. Calling on the Iranian people to rise up in the face of the brutal Islamist dictatorship Iran has suffered under for years, President Trump filled the airwaves with confident statements about how short the conflict would be, claiming there was essentially nothing left to target in Iran. Since then, however, we have witnessed a series of exchanges of fire between those two countries, the Iranian Revolutionary Guard Corps (IRGC), and US allies in the region - defined mainly by a lack of a clear endgame on all fronts. Following the assassination of Ayatollah Ali Khamenei, who had ruled since 1989, Iran quickly replaced its leadership with more hardliners, including Ali Larjani and Mojtaba Khamenei (son of the deceased leader). Larjani, killed on the night of March 16 by an Israeli strike, was Iran's security chief. He was one of 10 leaders on whose head the United States had placed a $10 million bounty in its ongoing attempts to decapitate Iranian leadership. A regime change in Iran has always been in the interests of the US (and most of the planet). It is certainly in the interests of the hundreds of thousands of anti-regime protestors seeking a democratic Iran - tens of thousands of whom the regime has gunned down in just the past few months. But the timing and planning behind this particular method of forcing a regime change appear mostly opaque. With no clearly stated exit plan, it seems that the US and Israel have jumped headlong into a conflict that may last months, at least. But the world, and Asia in particular, doesn't have many months to last. Let's take a look at where we are now and what it means for global trade, key economies, and the world at large.
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