BATTLESHIPS FRONT AND CENTER

Stratfor just issued its first of the month update on the deployment of the US Navy. There has been a lot of activity. Battle strike forces have moved into positions near North Korea, and Iran. The USS George Washington and other ships are now stationed in Japan, between the eastern ports of Russia and the Middle East. The USS Ronald Reagan has been in the Arabian Sea for several months, supporting US operations in Afghanistan. The USS Iwo Jima and its complement just left the Mediterranean Sea via the Suez canal and is now just south of the Ronald Reagan.


Was all this movement made to intimidation Russians or Iranians or was it part of the Paulson $700 Billion Dollar "Oh My the World is Coming to an End" scare tactic? Did the public rush into gold and t-bills at the bottom of the stock market because of the financial crisis or are they concerned about international affairs? Probably the former as few pay attention to international affairs.


Or, is there more to come? Will the USA follow through on the previous "mini blockade" that kept Iran from selling oil during the month of May? The Russians have prevented new UN sanctions, but the previous "mini blockade" was done under terms of prior sanctions, which have not been repealed. Should the USA enforce a gasoline delivery blockade to Iran, there is little that Russia could do. Iran has been working feverishly to convert autos to run off of natural gas. The Russian Navy is in route to the coast of Somalia, where a Ukrainian ship, carrying Russian tanks, has been hijacked (did the USA encourage the pirates?) and other Russian ships have made port at Syria. In any event, he Russian Navy does not hold a candle to the US Navy. The USA does not want to do battle with the Russians, but the Russians are even more certain that they do not want to do battle with the USA. Who knows how many submarines are lying in wait?


It is possible that the US and our European allies have privately given Iran a final deadline to stop making nuclear bombs. The delivery of our most sophisticated radar defense system to Israel (staffed and maintained in private by US forces), two or three weeks ago, and the sale of F-35's to Israel suggest that the US is prepared for any response, from Iran or Russia. Because several deals have been very close to conclusion, I very much want to believe that the US has issued a final deadline and that Iran will follow the obvious best route, which is to conclude the final steps to a deal.


Syria has demonstrated its support for a pending deal by massing troops along its boarder with Lebanon. Yesterday, Syria admitted that it has not been able to stop the smuggling of arms from Iran to Hezbollah. Syria has called on the government of Lebanon to provide assistance. These are signs that Syria wants the negotiated deals between Israel and Lebanon and between Israel and Syria to be concluded.


It is hard for me to believe that several major battle groups have been deployed just to show Russia or Iran that we have them. The price of crude oil continues to remain stubbornly high, even after the Saudis have started producing 500,000 barrels per day no yet another new field and in the face of billions of barrels of new discoveries in Brazil and, yes, in the face of the end to the moratorium on US offshore drilling. The price of oil and gold continue to be held up in part by geopolitical risks.


With or without the successful conclusion of a deal with Iran, the Obama plan, which was to have withdrawn from Iraq a year ago, was clearly the wrong choice. Iraqi soldiers continue to take the place of US forces in battle. Death rates continue to fall and the political reconciliation process continues to make progress. The coming next vote in Iraq will show that the people have bought into the concept of democracy!