The Nature of the Iranian Threat

THis is a compelling read. As I research around this topic - the relationship between Iran and China, the increasing tensions over dwindling oil supplies, the size of the US national debt, the US balance of trade problem with China, the spread of the "Religion of Revenge", the picture that emerges is that the English-speaking world is in a very, very delicate position. The following article sums things up so well that I present it here in its entirety.Worth the read:

REALITY OF IRAN HOJATIEH THREAT
STILL NOT SINKING IN
By Alan Peters
© 2005 Alan Peters

Indications of radical changes in the dynamics of the 3-month-old Iranian government, politically, philosophically and in their potential to do irreparable global damage without flinching or concern has begun sending shivers down some analysts' spines. However, this has yet to reach policy decision makers or the mass media.

Iran's Supreme Ruler, "ayatollah" Ali Khamenei's hasty revisions of the national ruling structure, delegating some of his own authority to the Expediency Council, chaired by rival "ayatollah" and former President Hashemi Rafsanjani, reflects unusual action to counter-balance the power-grab by newly inaugurated President Mahmoud Ahmadi-Nejad.

The unannounced moratorium on policies and procedures of all Iran's government ministries has been equally attributed to Rafsanjani's efforts to take control of Judicial, Legislative and Executive bodies through the broadened Expediency Council powers - and to Ahmadi-Nejad's cabinet implementing new regulations that suit their views. Specially, after warnings to the Expediency Council from his hard-line allies in the Majliss (parliament), not to mess with the Legislative system.

Persistent reports emanating from Tehran of solid rocket fuel capability and long range Shahab-3 missile tests, with emptied North Korean designed nuclear warheads, providing serious concerns, the nuclear component has begun taking second place to Iran's ability, even unintended, to damage global economies resulting (in worst-case scenarios) in worldwide financial meltdowns.

The 27-year, overtly hostile but comparatively "reasoned" approach toward the Western world and foreigners by the previous generation of senior Iranian Mullahs, with their accumulated overseas personal financial interests – even overflowing bank accounts outside Iran, has clearly ended. This has yet to permeate onto the desks of leaders in the Western world.

Analysis and evaluation based on prior status quo and parameters, with some adjustment for new players – as was the case with former changes of President and Majliss (parliament) deputies – no longer holds water. Any more than understandable, logical evaluations had a place with genocidal, paranoid Pol Pot of Cambodia.

Greater and lesser indicators mentioned below of mindsets, policies and philosophy, show "C" note changes, particularly to SME's (subject matter experts) on what drives "neo-Iran".

OVERVIEW

Less than three months ago, on August 15, 2005, Mahmoud Ahmadi-Nejad took office as the new "selected" President of the Islamic Republic of Iran with huge doubts over validity of the elections.

· He immediately purged nearly all senior central and provincial governing positions of older generation clerics and officials and replaced them with his military colleagues of the elite Islamic Revolutionary Guards Corps (IRGC) – about 350,000 strong, in which, prior to becoming Mayor of Tehran, he had been a commander.

· His neo-Islamic Republic, harking back to Khomeini times, has instructed all airports and domestic or international airlines operating in Iran to remove all foreign words or characters from their signs at ground locations across the country. In the same vein, clothing designers, hired for this purpose, have started creating a national Islamic style for everyone to wear. Strict imposition of restrictions on movies and audio, allowed to lapse to some extent by the previous President Mohammad Khatami, has been re-instated.

· Bassiji paramilitary (anti-demonstration and Islamic enforcement strike forces) have had their authority widely expanded to suppress dissent without any restraints and for the past month, Revolutionary Guards have begun appearing at posts on street corners and in a highly increased number of patrols.

(Still unclear was the showing up of only 1,400 Bassijis at an event when 20,000 should have appeared, though they have continued attacking students and by-standers with knives and clubs with their customary brutality).

· Residents of Tehran and its outer suburbs of late witnessed unannounced military exercises that involved the use of live munitions and firepower – and on an almost nightly basis in the hills East of Tehran.

Officials have tried to explain such activity as an eradication of communities and townships around Tehran, populated by criminal elements fleeing justice and becoming a threat to national security.

· Brigadier-General Mohammad Kossari, head of the Security Bureau of the IRGC stated, "Iran intends to become a superpower and will drive all foreign forces out of our region". What was previously sheer hyperbole now has a basis in serious executive policy and planning in Iran's new government.

· Hassan Abbasi, Head the Center for Security Doctrines Research of the IRGC has become Ahmadi-Nejad's prime advisor on Foreign Affairs. He lately announced, "We have a strategy drawn up for the destruction of Anglo-Saxon civilization". (An attitude supported by the tenets of Hojatieh - see below).

· Ahmadi-Nejad has declared a plan to create an Oil Bourse (Exchange) in Iran to unlink oil pricing from the U.S. Dollar and use the Euro or barter instead, thus to break any grip the West and the Dollar have on oil supplies or trade and make Iran the top oil and natural gas broker within the region. (Unlikely to succeed but perhaps effective enough on a short-term basis to trigger a dollar crash which could destabilize global solvency).

· Having studied Urban Development at the University of Science in Tehran, Ahmadi-Nejad has started drawing up plans to relocate 25 million rural residents to existing urban centers to facilitate less costly provision of utilities and services. (Grandiose Stalinist or Hitlerian methods, exhibiting simplistic disregard of unintended consequences and social side effects).

· After his inauguration, Ahmadi-Nejad visited the grave of his hero, Ayatollah Rouhallah (soul of Allah) Khomeini then went to kiss the hand of his mentor and spiritual guide, Ayatollah Mesbah Yazdi, leader of the Hojatieh sect of Islam, who was instrumental in elevating Ahmadi-Nejad to his Presidential position.

MAJOR NEW COMPONENT

The newest and most dangerous component that lends credibility to the potentially mindless chaos and destruction that Ahmadi-Nejad and his clique could trigger comes from a look at his mentor, Ayatollah Mesbah Yazdi and his sect's deep-rooted beliefs.

The Hojatieh philosophy, considered by mainstream Shia Moslems as a lunatic fringe, was too much even for extreme hardliner Ayatollah Khomeini, whose disapproval sent them into underground, clandestine status in 1983, some four years after the Islamic revolution in Iran.

Censure from a man as ruthless and radical as Khomeini, who insisted that the Prophet Mohammad had not completed Allah's work in the world and that he (Khomeini) was born to finish the job of bringing Islam to its rightful place (as the only religion and to destroy unbelievers) - indicates how far off the Islamic radar the Hojatieh function.

Ahmadi-Nejad, a Khomeini adherent throughout his adult life, transitioned to his present, previously unpublicized role of acolyte to Ayatollah Mesbah Yazdi, himself a pseudo-Khomeini supporter, though not of Khomeini's Islamic revolution, in total concealment. (The Hojatieh took no part in the 1979 Khomeini revolution).

Nicknamed the "crocodile" and often referred to as the "crazy" Ayatollah, Mesbah Yazdi echoes Khomeini saying, "Islam permits spilling the blood of anyone who insults Islamic sanctities and no court is needed".

After his 1979 return to Iran, in early days, a companion asked Khomeini how he wanted the Ministry of Justice restructured and he replied, "Anyone who is against me is against Allah and must be killed where they stand. No other justice system is required".

HOJATIEH

Understanding the abruptly dominant Hojatieh philosophy becomes essential for any current analysis. Formed in the 1950's at the time of the late Shah, the group's primary motivation was to eradicate the Bahai faith and all its members in Iran over a philosophical clash about Imam Mehdi - the Lord of all Time and 12th descendant of Prophet Mohammad.

Shia Islam believes that the 12th Imam, a child named Mehdi, hid down a well 1,300 years ago and disappeared but will return to redeem the world. The Bahai religion, which declassified documents from the British Foreign Office appear to indicate Britain founded and organized artificially to splinter and weaken Iranian clergy influence, consolidated against British presence in Iran, claims their Prophet, Sheikh Baha'ollah, as the 12th Imam, who has already returned.

As devotees of the 12th Imam, the Hojatieh firmly believe he will return only when the world contains enough oppression, misery, tyranny and sorrow to warrant his coming. To hasten and facilitate the return, they believe in spreading evil, tyranny and misery and argue that standing in the way of all these delays his coming and their redemption.

Ayatollah Mesbah Yazdi, the power behind the scenes now helps formulate Iran policy, through President Ahmadi-Nejad, his submissive and a man called Mojtaba Somreh Hashemi, the President's mentor without whom, much to their chagrin, nobody in senior government can make a decision. Nor start a Cabinet meeting or access the President himself. Hashemi represents Ayatollah Mesbah Zadeh and had the same role when the new President was still Mayor of Tehran.

The Hojatieh receives full co-operation of belligerent, military Revolutionary Guard commanders - suddenly in positions of national executive authority as Cabinet Ministers. They brook no half measures, instantly ready to suppress any internal resistance – clerical or otherwise - including removal of Supreme Ruler Khamenei himself.

The neo-Iran status presents a very different scenario from what we faced, uncomfortable as it was with the Ayatollahs in general, for the past quarter century. A recent cabinet meeting evidences the unconventional mindset of the new players running Iran and now addressing the world stage from their eyes:

President Ahmadi-Nejad's first deputy, Parviz Davoudi, submitted and the cabinet ratified in a formal meeting, an agreement between the cabinet ministers and the Shia 12th Imam, Mehdi, Lord of All Time, in a similar fashion to the pact they had all signed with Ahmadi-Nejad upon taking office.

The question then arose how to obtain the long dead Imam's signature on the document for ratification. Minister of Culture and Islamic Guidance, Saffar Harandi finally dropped the agreement into the Jamkaran well into which they believe Imam Mehdi descended 1300 years ago, where it joined tons of letters and requests from pilgrims over the centuries.

A large number of Ahmadi-Nejad's close allies are talking about preparing the grounds for the hidden Imam's imminent manifestation. Any hope for logical international policies from these leaders may be too much to expect – or for them to understand.

Total disregard for the well-being of the world community, so incredible a concept, even impossible to digest for Western minds (as was Pol Pot), has become a readily acceptable philosophy of Iran's new active rulers. With the reverberations of religious tenets of "ultra-conservative" Ayatollah Mesbah Yazdi, preaching apocalypse to his choir, encompassing everyone and everything.

The semi-clandestine nature of the Hojatieh over time, in no way hampers Mesbah Yazdi's influence in today's Islamic Iran. Apart from long roots in the poorer, superstitious populace through his Khomeini Institute, he was one of only two Ayatollahs to support Supreme Leader "ayatollah" Ali Khamenei in his bid to succeed Khomeini when every other Ayatollah, except Iraqi born Ayatollah Hashemi Shahroodi, the current Chief of Judiciary, rejected Khamenei's theological credentials. To become Supreme Leader has a prerequisite of being a Grand Ayatollah (Emulation Source for Shiite faithful).

As reward, Mesbah Yazdi requested and received funds to found and run the Imam Khomeini Institute to spread the teachings of Khomeini – providing a vehicle to gain support and standing in conventional Islamic circles – while strengthening the radical Hojatieh network.

AHMADI-NEJAD

The new Iranian President's personality profile provides another important input to the Iranian challenges the world could inevitably face, unless, as one SME notes, circumstances change dramatically or a nuclear take-out of the Islamic Iranian regime occurs. Israel seems increasingly willing to undertake action against Iranian facilities and despite denials, U.S. military strategists appear to have a massive conventional bombing plan of some 5,000 specific locations on their charts.

1. Still in his mid-teens when Khomeini took over, Ahmadi-Nejad is a product of post-revolutionary Iran and has no perception of the West except as an enemy to be confounded and defeated.

Studying Urban Development and rising to Mayor of Tehran did not provide him grounding for even national level concepts, nor has he any foreign affairs experience at all. His idea to move 25 million Iranians from rural areas to existing urban locations indicates simplistic, linear thinking.

2. Coming from impoverished circumstances, where his coppersmith father provided only a minimalist life, the new President has lived off very little all his life, including a meager military salary. Unlike most senior Mullahs and their entourages, who over the past 25-years have acquired riches, invested in overseas real estate and other projects and often have sizeable accounts in offshore banks, consequently a stake in keeping global economies steady, Ahmadi-Nejad has nothing to lose or to gain by factoring in "time wasting" and unfamiliar international components.

3. His strong proclivity to Ayatollah Khomeini's Valiate-Faghi guiding principles, which propound Islamic clerical rule and dominance of the world and his dedicated religious conduct as a daily part of his military lifestyle in the IRGC, easily puts him in the category of a religious fanatic, though secular in official title.

The underpinning to the problem is Iranian in nature, but the ability for Iran to do serious harm stems more from a combination of global weaknesses.

World currency markets, oil unlinking radically from the dollar (potentially to some extent through the Iranian Oil Bourse plan) and the political and personal ambitions of leaders in Europe, Russia, China and the Islamic world, combine to become a serious peril. Significantly, terrorist groups have also begun switching from purely bodily or property harm to attempting to destroy the financial well being of target countries.

Viewed in perspective, emerging anxiety about "neo-Iran" ponders a bizarre situation, far from wild conjecture, that will require drastic action to prevent. Existing dynamics might, at best, bring far reaching doldrums and financial pain to Europe and advanced Western nations, similar to that encountered in the USA during the Jimmy Carter administration, intertwining with aspects unrelated to Iran's intentional efforts to cause harm.

CURRENCY

The U.S. Dollar plays the role of the world's primary currency and nothing else can presently substitute for the dollar's mandatory use for oil purchase and oil trading, which has to be in dollars. Nevertheless, based on supply and demand principles, U.S. money is about 40-50% overvalued.

Central Banks find themselves crammed with a surplus of dollars, which they hold beyond logical considerations just to maintain equilibrium in world trade and commodities – mostly out of self-interest and self-preservation.

Quite to the contrary, Ahmadi-Nejad and his clique have neither such compunctions nor personal wealth to protect. A negative run on the dollar would change the economic face of the earth and delight the Hojatieh mindset and religious aims of spreading misery.

A glut of dollar holdings by Central Banks and among Asian lenders (China reportedly has hundreds of billons in U.S. Treasury bonds) plus the current low interest rate offered to investor/lenders by the USA has been putting the dollar in jeopardy for some time.

Including, potentially, by some inexperienced Third World central bank employee, who seeing an over stock of dollars in the bank's currency portfolio, decides to diversify their holdings.

Were that person to offer several billion dollars on the market, they would trigger a panic sell-off by everyone else. A twitching finger on currency's hair-trigger can shoot down the dollar without any purposeful ill intent. Most estimates place the likely drop to "floor levels" at a rapid 50% loss in value for a presently 40% overvalued Dollar.

Not too long ago, a mid-level official of the Korean Central bank casually mentioned currency "diversification" at an obscure lunch. The U.S. Stock Market fell by 100 points in 15 minutes, because of an implied desire for Korea to decrease its dollar holdings. What would the drop have been had he actually sold dollars?

When a group called "Long Term Capital Management", a hedge fund of derivatives – something fully understood by probably less than half a dozen people in the world – failed, U.S. Federal Reserve Chairman, Alan Greenspan had to help bail it out to save the dollar and the U.S. economy.

This fund had Nobel Prize winning economists writing their trading algorithms and top-drawer traders involved and still went down in flames. What about the expertise level of other hedge funds trading daily in the USA - some 8,000 of them?

About $6,000 Billion (easier to conceptualize as "huge" instead of a mere "six trillion") worth of derivatives trade on the international market – daily - so the already built-in prospect of disaster surpasses all possible defensive safety measures.

Compare this daily volatility to the annual USA national budget of approximately $1,900 Billion (less than two trillion) of revenues and $2,350 Billion (2.35 trillion) in expenditures.

While economists scoff at the currency market being unable to right itself in the face of fluctuations, if left to its own devices, introduce into this at best "delicately balanced" economical environment, a hostile "Hojatieh" Iran's lack of any desire or motivation to help prevent global economic mayhem.

OIL BOURSE

While a regional Oil Exchange attempted by Dubai failed, partly because they play by international rules and monetary exchange norms, Iran's Bourse, in Euros or in barter trade agreements and Hojatieh willingness to sacrifice the world and its own people to achieve its religious ends of bringing back their 12th Imam, presents a special set of givens. Specifically in the area of damage to world financial stability, as opposed to a conventionally deemed "successful", venture for Iran.

Experts from the International Petroleum Exchange (IPE) and New York Mercantile Exchange (NYMEX) have apparently already confirmed the feasibility of the project, bearing in mind Iran's much greater reserves of petroleum products with which to operate and weight the market.

Realistic argument posits that the Iranian oil fields are old and require huge investments to continue production or to keep them at anywhere near current levels. New oil fields will take time to come online and hamper the speed of Iran's negative activity. In addition, Iran's natural gas fields, the second largest reserve in the world after Russia, have yet to be developed fully and cannot provide a big enough supply to make a significant immediate difference in the markets.

Because U.S. sanctions on the sale of American technology to Iran, the most modern systems for effective, large scale liquefaction of natural gas have been denied to Iran and hampers their ability to bring important liquid natural gas prominently into the mix.

While the Bourse may be wishful thinking as a constructive revenue source for Iran, according to Western standards of logic and assessment of success, missing from the equation of production targets and capability is that oil-currency - not oil or natural gas itself - is the principle fulcrum and danger factor.

If the Euro became the reserve currency and choice of oil producing countries, the U.S. would have to purchase Euros to purchase oil, the reverse being the case today with countries having to pay a "Dollar Tax" to buy oil in dollars.

Experts agree the effect over only a very few years would be devastating to the status of the dollar globally. Then, Euros (in their role as petro-currency) would affect the U.S. Dollar, U.S. economy and the interest rates America must offer to attract buyers. Former U.S. Reserve Chairman Paul Volcker has already placed the likelihood for a Dollar crash in the next five years at 75%.

The Iranian Oil Bourse's trade in Euros instead of dollars could possibly hasten the crash and the percentage of likelihood. Some feel Volcker was unable to assess Federal Reserve matters knowledgeably but with experts like George Soros and Warren Buffet putting their own billions into betting against the dollar, Volcker's comments gather strength.

If major oil and natural gas supply and trade quantities become easily available only in Euros or barter, Central Banks will have ever less reason to overstock their portfolios with U.S. currency and will eventually begin replacing unwanted Dollars with necessary Euros, unleashing a dollar decline of great proportions.

Any crash would bring Iran, with a wealth of oil and natural gas reserves with which to barter with China, Russia, India and Far East nations, to the fore as a new superpower, in a future scenario where money or devalued currencies might have much less, little or even no value.

The latest flavor of Islamic Republic would suffer only tangentially and try to obtain all their needs through barter or exchange. Their life styles would remain similar to what they had until very recently as military men and whether the populace is unhappy – preferably so for the Hojatieh – means little or nothing in their big picture.

At very best, the USA would enter another Carter administration era financial pattern:

1. Interest rates were so high nobody could afford to finance a house, so this market sector, like many other big-ticket items such as automobiles, slowed to almost a halt in some instances.

2. Grocery items had multiple superimposed price stickers as the cost of goods rose faster than customers bought them. Imported retail merchandise normally sells or distributes through national chains like Walmart or food chains, so a drop in the dollar makes these more expensive for the buyer and leads to layoffs as the retail chains find their sales volumes and profit margins eroded.

3. The price of energy shot up so much people resorted to wood burning stoves to stay warm at a price they could afford. The quality of life went down.

4. People on fixed incomes could no longer afford to live and the more solvent could not keep abreast of rising prices and interest rates. A drop in the dollar immediately cuts into the value of saved money.

5. Running a business became almost impossible as the price of goods and materials skyrocketed. Sales to a greatly less solvent market plummeted and marketing assumptions needed for advertising, budgeting and planning became wild guesses at best.

What might happen if the dollar devalued rapidly? Global ruin.

With economies so interdependent and interwoven, a global not just American Depression would occur with a domino effect throwing the rest of world economies into poverty. Markets for acutely less expensive US exports would never materialize.

The result, some SME's estimate, might be as many as 200 million Americans out of work and starving on the streets with nobody and nothing able to rescue or aid them, contrary to the 1920/30 Great Depression through soup kitchens and charitable support efforts.

Iran would most likely intentionally sabotage any return to stability and market balance/adjustment with their fossil fuels; their newfound nuclear deterrent probably discouraging use of force against them until too late.

A close look shows Ahmadi-Nejad holds the key to throwing the world into the tribulations of the Weimar Republic of Germany after World War I. High inflation and interest rates drove the value of the Mark into the ground and allowed Hitler to present himself as a savior.

To provide an adequate cash flow to the working class, Hitler promised to pay them once a week, then twice a week, then once a day. When this failed, he allowed workers two hours off work every day to trundle wheelbarrows full of German currency, which barely sufficed to buy a loaf of bread.

Iran succeeding in unlinking the Dollar as the primary currency for oil purchases, were it to occur, creates the same outcome for the USA and consequently within short time frames for the rest of the civilized world.

To deny history repeating itself with Ahmadi-Nejad's Hojatieh minded governing group filling in for Hitler, suggests a refusal to face and counteract an indescribable menace beyond the reach of Western logic but totally in alignment with this specific brand of Islamic fervor to intentionally create an apocalypse. Then to impose Islamic rule on a shattered world.

CONCLUSION

Apart from the use of nuclear arms by the West to bring down the new regime in Iran, only an internal effort by the old-guard Ayatollahs to overcome Ahmadi-Nejad and his allies, at the clear risk of a civil war they would lose, has a hope of preventing a potential global Depression.

Few other counter measures come to mind. Mostly because of the shortcoming of the global "family" of nations to withstand mindless nihilism and an untrammeled desire to destroy in the name of their 12th Imam.

When Iran's lately announced pull back from subsidizing refined gas prices domestically and import of this fuel takes hold on the population, who will suddenly be unable to afford to operate vehicles, the dissatisfaction could translate into riots and open a new window to remove the Islamic regime of whatever flavor.

In-depth bombing, specifically of all Iranian military and nuclear facilities at that time – possibly the 5,000 locations mentioned above – would weaken or remove any government ability to suppress the riots and allow a smooth overthrow of the current regime.

The unanswered question – as was the case in Gulf War I with Iraq and Saddam Hussain – will be with what or with whom to replace it.