The Economic Risks of Trump’s Reckless Assassination

If Tehran ever decided to shut down the Strait of Hormuz it would trigger a global depression, writes Pepe Escobar.

By Pepe Escobar
Asia Times  

The bombshell facts were delivered by caretaker Iraqi Prime Minister Adil Abdul-Mahdi, during an extraordinary, historic parliamentary session in Baghdad on Sunday.

Maj. Gen. Qassem Soleimani had flown into Baghdad on a normal carrier flight, carrying a diplomatic passport. He had been sent by Tehran to deliver, in person, a reply to a message from Riyadh on de-escalation across the Middle East. Those negotiations had been requested by the Trump administration.

So, Baghdad was officially mediating between Tehran and Riyadh, at the behest of Trump. And Soleimani was a messenger. Adil Abdul-Mahdi was supposed to meet Soleimani at 8:30 am, Baghdad time, last Friday. But a few hours before the appointed time, Soleimani died as the object of a targeted assassination at Baghdad airport.

Let that sink in – for the annals of 21stcentury diplomacy. Once again: it does not matter whether the assassination order was issued by President Donald Trump, the U.S. Deep State or the usual suspects – or  when. After all, the Pentagon had Soleimani in its sights for a long time, but always refused to go for the final hit, fearing devastating consequences.

Speaker of Iraqi Parliament concluding Jan. 5 vote on expelling U.S. troops. (YouTube still)

Now, the fact is that the United States government – on foreign soil, as a guest nation – has assassinated a diplomatic envoy who was on an official mission that had been requested by the United States government itself.

Baghdad will formally denounce this behavior to the United Nations. However, it would be idle to expect UN outrage about the U.S. killing of a diplomatic envoy. International law was dead even before 2003’s Shock and Awe.

Mahdi Army is Back

Under these circumstances, it’s no wonder the Iraqi Parliament approved a non-binding resolution asking the Iraqi government to expel foreign troops by cancelling a request for military assistance from the U.S.

Translation: Yankee go home.

Predictably, Yankee will refuse the demand. Trump: “If they do ask us to leave, if we don’t do it in a very friendly basis, we will charge them sanctions like they’ve never seen before ever. It’ll make Iranian sanctions look somewhat tame.”

U.S. troops already are set to remain in Syria illegally – to “take care of the oil.” Iraq, with its extraordinary energy reserves, is an even more serious case. Leaving Iraq means Trump, U.S. neocons and the Deep State lose control, directly and indirectly, of the oil for good. And, most of all, lose the possibility of endless interfering against the Axis of Resistance – Iran-Iraq-Syria-Hezbollah.

Apart from the Kurds – bought and paid for – Iraqis all across the political spectrum are tuned in to public opinion: this occupation is over. That includes Muqtada al-Sadr, who reactivated the Mahdi Army and wants the U.S. embassy shut down for good.

As I saw it live at the time, the Mahdi Army was the Pentagon’s nemesis, especially around 2003-04. The only reason the Mahdi Army were appeased was because Washington offered Sadr Saddam Hussein, the man who killed his father, for summary execution without trial. For all his political inconsistencies, Sadr is immensely popular in Iraq.

Soleimani Psyop

Hezbollah’s secretary-general Sayyed Nasrallah, in a very detailed speech, goes to the jugular on the meaning of Soleimani’s assassination.

Nasrallah tells how the U.S. identified the strategic role of Soleimani in every battlefield – Gaza, Lebanon, Syria, Iraq, Yemen, Afghanistan, Iran. He tells how Israel saw Soleimani as an “existential threat” but “dared not to kill him. They could have killed him in Syria, where his movements were public.”

So, the decision to assassinate Soleimani in public, as Nasrallah reads it, was a psyop. And the “fair retribution” is “ending the American military presence in our region.” All U.S. military personnel will be kept on their toes, watching their backs, full time. This has nothing to do with American citizens: “I’m not talking about picking on them, and picking on them is forbidden to us.”

With a single stroke, the assassination of Soleimani has managed to unite not only Iraqis but Iranians, and in fact the whole Axis of Resistance. On myriad levels, Soleimani could be described as the 21st century Persian Che Guevara: the Americans have made sure he’s metastasizing into the Muslim Resistance Che.

Chokepoint: The Strait of Hormuz. (Flickr)

Oil War

No tsunami of pedestrian U.S. mainstream media PR will be able to disguise a massive strategic blunder – not to mention yet another blatantly illegal targeted assassination.

Yet this might as well have been a purposeful blunder. Killing Soleimani does prove that Trump, the Deep State and the usual suspects all agree on the essentials: there can be no entente cordiale between Saudi Arabia and Iran. Divide and rule remains the norm.

Michael Hudson sheds light on what is in effect a protracted “democratic” oil war:

“The assassination was intended to escalate America’s presence in Iraq to keep control of the region’s oil reserves, and to back Saudi Arabia’s Wahhabi troops (Isis, Al Qaeda in Iraq, Al Nusra and other divisions of what are actually America’s foreign legion) to support U.S. control of Near Eastern oil as a buttress of the U.S. dollar. That remains the key to understanding this policy, and why it is in the process of escalating, not dying down.”

Neither Trump nor the Deep State could not fail to notice that Soleimani was the key strategic asset for Iraq to eventually assert control of its oil wealth, while progressively defeating the Wahhabi/Salafist/jihadi galaxy. So he had to go.

‘Nuclear Option’

For all the rumble surrounding Iraqi commitment to expel U.S. troops and the Iranian pledge to react to the Soleimani assassination at a time of its choosing, there’s no way to make the imperial masters listen without a financial hit.

Enter the world derivatives market, which every major player knows is a financial WMD.

The derivatives are used to drain a trillion dollars a year out of the market in manipulated profits. These profits, of course, are protected under the “too big to prosecute” doctrine.

It’s all obviously parasitic and illegal. The beauty is it can be turned into a nuclear option against the imperial masters.

I’ve written extensively about it. New York connections told me the columns all landed on Trump’s desk. Obviously, he does not read anything – but the message was there, and also delivered in person.

This past Friday, two American, mid-range, traditional funds bit the dust because they were leveraging in derivatives linked to oil prices.

If Tehran ever decided to shut down the Strait of Hormuz – call it the nuclear option – that would trigger a world depression as trillions of dollars of derivatives imploded.

The Bank for International Settlements (BIS) counts about $600 billion in total derivatives. Not really. Swiss sources say there are at least 1.2 quadrillion with some placing it at 2.5 quadrillion. That would imply a derivatives market 28 times the world’s GDP.

On Hormuz, the shortage of 22 percent of the world oil supply simply could not be papered over. It would detonate a collapse and cause a market crash infinitely worse than 1933 Weimar Germany.

The Pentagon gamed every possible scenario of a war on Iran – and the results are grim. Sound generals – yes, there are some – know the U.S. Navy would not be able to keep the Strait of Hormuz open:  it would have to leave immediately or, as sitting ducks, face total annihilation.

So, Trump threatening to destroy 52 Iranian sites – including priceless cultural heritage – is a bluff. Worse: this is the stuff of bragging by an ISIS-worthy barbarian. The Taliban destroyed the Bamiyan Buddhas. ISIS nearly destroyed Palmyra. Trump Bakr al-Mar-a-Lago wants to join in as the destroyer of Persian culture.

Pepe Escobar, a veteran Brazilian journalist, is the correspondent-at-large for Hong Kong-based Asia Times. His latest book is 2030.” Follow him on Facebook.

This article is from Asia Times.

 The views expressed are solely those of the author and may or may not reflect those of Consortium News.

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22 comments for “The Economic Risks of Trump’s Reckless Assassination

  1. January 8, 2020 at 09:52

    Apropos Hillary Clinton quote:

    “We have all learned lessons from the conflict in Iraq, and we have to apply those lessons to any allegations that are being raised about Iran. Because, Mr. President, what we are hearing has too familiar a ring and we must be on guard that we never again make decisions on the basis of intelligence that turns out to be faulty.”

    From www(dot)newyorker(dot)com/magazine/2007/03/05/the-redirection

  2. John Drake
    January 7, 2020 at 15:43

    Another brilliant analysis. When I see Pepe’s byline I start there now.
    The only problem with shutting down the Straight would be its effect on Iran’s allies and other countries. About 44% of China’s oil come through there and a majority of Japan’s. The US doesn’t need it.
    The blowback to the “Great Satan” would be the predicted economic crash which unfortunately would hurt many more peoples than just the perp nation. Of course this would put tremendous pressure on the US to learn to be a good neighbor for once in its long sordid history of outrageous interventionism. A crash of 1929 proportions might just wake up the US vassal states. Something that Trump’s outrages have already started.

  3. bardamu
    January 7, 2020 at 14:56

    Informed speculation as to the reason that the beginning is so stunningly inept would be of interest at whatever point it might be possible.

    The common “Trump’s a looney” does not really cover all the bases here because, presented by itself, it suggests a lot more sanity than the entire neocon-neoliberal imperial coalition has shown to date.

    At the same time, is it really possible that the US has forgotten how to stage the sort of false-flag event by which it usually sends these things off? Can the gov’t imagine that it has the credibility to just claim that an event has happened?

  4. Seer
    January 7, 2020 at 14:05

    Protecting he petro-dollar is a losing battle.

    Iran will shift toward East Asian markets, and trade with China will most certainly take out a leg from the petro-dollar’s table. And the new Nordstream pipeline also threatens to upend the petro-dollar table: Russia will continue to route around SWIFT (and do trades in other-than USD).

    The tipping point is very close. THIS is why the apparent insanity. I’d said it way back when Iraq was first attacked, WHY, in response to the clearly stupid story of Iraqi WMDs, that it was all a sign of sheer desperation. THE plan, as someone in the GW Bush administration put it, breaking everything was still better than letting it as it was: the direction things were heading is, well, the same as it’s heading now- all roads lead to the cliff for the petro-dollar. Next “goal” is so thoroughly confuse the American people that when crushing economic calamity hits they will not recognize the perpetrators in their midst (unlikely such perps will flee, as there is really no place to hide- Brazil might have been an escape destination, but that’s going to revert, so not safe for the economic hitmen and necons and neolibs).

    • Litchfield
      January 8, 2020 at 21:10

      “I’d said it way back when Iraq was first attacked, WHY, in response to the clearly stupid story of Iraqi WMDs, ”

      Immanuel Wallerstein was very clear in pointing out in early 2003 that the Iraq invasion *had* to take place, despite known absence of WMD, because Saddam had opened a euro-denominated oil exchange. That had to be stopped. And it was.

  5. Hide Behind
    January 7, 2020 at 13:38

    While I respect authors knowledge and expertise on ME affairs and his evaluations of true world economic I think that his dire predictions that a ME closure of oil availability to world would cause world wide depression.
    There would be panic pricing, but then oil pricing is already an artificially controlled price, and availability, commodity, and is in no way a rare commodity.
    About the closest one can come to fixed pricing of a commodity is that of diamond Industry where there are more diamonds by far in storage than on open market, so many in fact that in last three years diamond mining firms have either quit or vastly reduced mining activities.
    Opec has been cutting back on production both to raise prices and to placate concerns of what amounts to 20-50 times reserves and production by multiple nations.
    US, Canada, and Mexico together export far more oil than all of ME, and their total capacity could easily be doubled in six months and 20% in weeks.
    US oil reserves are huge, as large as what all ME has in Storage for monthly export.
    Russia could almost immediately, especially if partnered with US take care of all European needs.
    The oil from Africa is being restrained by worlds oil giants and way below capacity flow.
    US controls almost all of Venezuela’s foreign refineries and could at stroke of pen allow them to ramp up production.
    European allies of US together have very tightly controlled economic systems and cowed in place societies, societies who can be manipulated into rationing without a whimper.
    Israel has become a gas exporting nation and laying pipes to Europe markets.
    Libya is just about reunited, as far as reaching old oil/gas exports and pipelines from Africa are already coming into play.
    So yes a disruption on order of a depression, but cushooned, in Rest of world, but for Iran, total destruction and a genocidal attack by US/Israel, ME, France, Turkey BRITS and Queens bootlicking Aussie and canadians and others.
    How does anyone think that the amounts of debt way above 20 years of worlds gross GDP has not crashed our economic systems?
    Who is in control making sure it is not a problem, and kust who will in long term pay the fees to live in world where 99% of its wealth resides in less that 15% hands; hands that pay the next level of 20% bureaucrats in all nations to administer their wealth.
    In US 40%+ live at and below poverty level right now, and those above will ensure it is the poor who suffer before they do.

  6. rosemerry
    January 7, 2020 at 13:25

    Pepe never disappoints, and explains so clearly the often complex details. Thanks Pepe and CN.

  7. Bill
    January 7, 2020 at 12:14

    The GOP is thirsty for blood.

    • Robert
      January 7, 2020 at 13:31

      Yes and from President to dog catcher we need to vote them all out of office. Knowing of course the Democrats are just a slightly more palatable side of the same coin.

    • Drew Hunkins
      January 7, 2020 at 17:26

      Killary was every bit as bellicose toward Iran in ’16 as Trump.

    • January 9, 2020 at 02:31

      So true, this is why I always vote for the peace loving Democrats.

  8. Drew Hunkins
    January 7, 2020 at 10:41

    Escobar is spot-on with this analysis of course. However, there is one thing he hasn’t considered, and that’s the “mad dog” persona.

    Israel has always wanted to project the image of a crazy state in which no one knows what to expect from one minute to the next (sort of like the Joe Pesci character in “Goodfellas”). In Israel Shahak’s absolutely essential must-read book “Jewish History, Jewish Religion” he consistently opines throughout that one should never expect rationality from the Israeli state, that Israel indeed often acts in a quite irrational manner on the international stage. This is due to the fact that the very nature of the entire Israeli nation-state is built on irrational religious tenets.

    So there’s always a chance the racist sadistic paranoid hegemonic artificial state of Israel could do just about anything, even something as insane that would lead to the Iranians closing the Strait of Hormuz, crashing the global economy.

  9. Jim
    January 7, 2020 at 10:24

    It would be nice if any of the insulting nicknames for Trump and pious observations regarding “ the appropriate time and place “ for military killings had any bearing, historically or in the present.
    The US policy for Persia and Arabia has been written for years. Every “ally” or strongman we have installed and supported has been used, set up, and knocked off. This is nothing new, and certainly not an “ impulsive “ move by Trump.

  10. Mark Stanley
    January 7, 2020 at 00:54

    All of the articles on Consortium have been good on this issue—here Pepe really hit the nail on the head:
    Soleimani was on a diplomatic mission for stability and peace in the region. I personally feel very bad about this. When the event occurred and I saw this guy’s image he looked like a gentleman general to me. I didn’t mention it because I thought they’d dig up some dirt on him and I’d look a fool. No general could pass the purity test, but so far I’ve seen little compost, sand, or topsoil. Israelis don’t like him. Cry me a river. Gentleman general still stands unless some data pops up. He was about my age. Who’s grandfather was he?
    To the general’s family and Iranian people:
    As an American citizen I apologize deeply for the travesty done here by our deranged leaders. My vote counts, and it is only one, but I am certain other voices would join me.

    • Robert
      January 7, 2020 at 09:59

      I agree with Mark and also apologize for this clown of a president’s actions. I am a disabled Vietnam veteran and I know a thing or two about out of control governmental policies. I am suffering for agent orange exposure related cancer and my first doctor at the VA was from Vietnam and my current oncologist is from Iran. It saddens and sickens me to see what is happening in the world. My son was wounded in Afghanistan. I would applaud the closing of the Straits of Hormuz… serve them all right. Besides we need to get off all oil products anyway.

    • rosemerry
      January 7, 2020 at 13:22

      One of my neighbors let me know why I do not follow the news media here in France, explaining to me that Suleimani was not really popular or “beloved” in Iran. The crowds at his funeral were forced to be there by the dictatorship.
      Looking at listening, I find this might be not the only person believing this and supporting the US move.

    • Frederike
      January 10, 2020 at 19:05

      I agree with Mark as well. Faces portray a person’s mentality and intelligence. The general’s image exudes intelligence and honesty, whereas the orange clowns face exudes stupidity, while he is trying to look intelligent, which he will never be, because he is intellectually and morally inadequate.
      The general is not known for any devious acts, whereas our clown is known for no other kind.
      In addition to having produced at least two dishonorable children, who recently have been investigated for real estate fraud, (one of them now an advisor in his establishment of crooks) he has produced nothing but lies and chaos.
      The general’s daughter is genuine and grieving. I, though I am not an American citizen by choice, but live in this country, apologize for the devious acts of the president in this country.

  11. Jeff Harrison
    January 6, 2020 at 21:43

    I don’t know that I agree that the Saudis had anything to do with this. I think it was entirely Israel and the deep state. I also think they’ve cooked their own goose. The Iranians can, as you point out, simply mine the straits. That would hurt both the Iraqis and the Saudis and would probably to a lesser extent, hurt Iran (only because American sanctions are already hurting Iran). Iran could come to a modus viviendi with everybody where they all kick the Americans out and Iran doesn’t mine the straits. Or not.

    Leave us not forget that it wouldn’t take long for the rest of the world’s financial system to implode in the event of a closure of the Straits of Hormuz.

  12. George Vukmanovich
    January 6, 2020 at 20:50

    The Strait of Hormuz could be effectively mined by plain old World War One style contact mines, just a few feet below the surface.of the water. These mines are so primitive that the only method of removal requires them to be destroyed where they are positioned. These mines don’t have timers and are non-magnetic so degaussing the minesweeper’s electromagnetic signature would be pointless. Secondly, Iranian minelayers would only need to mine two ship channels used by the oil tankers, one for incoming ships and the other for outgoing ships. The Strait of Hormuz at it’s narrowest point is just 21 miles across, with both lanes being only about 2 miles across, separated by a 2 mile buffer zone. If mined, insurance rates for ships passing through would reach prohibitive levels and the price oil and refined products would also sky rocket to point of having rationing imposed.

  13. Moi
    January 6, 2020 at 18:53

    Foreign policy US-style: Iraq is threatened with crippling economic sanctions for not wanting to be the proxy battlefield between the US and Iran.

    Makes mafia stand-over tactics look tame in comparison.

    Trump Bakr Capone al-Mar-a-Lago?

  14. Pedro del grifos
    January 6, 2020 at 17:07

    I love Pepe’s columns.

    • Bob In Portland
      January 7, 2020 at 14:53

      I’ve been following Escobar for years. His explanation of Pipelineistan was awesome. Explains the oil politics that the MSM assiduously ignores.

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