The Podcast of the Lotus Eaters - FREEMIUM： Realpolitik #37

00:00:00.880 Hello, and welcome to another episode of RealPolitik. I am your host, Firas Maadad, and today we're

00:00:08.120 going to be talking about the war in the Middle East again, which seems to be expanding and

00:00:13.660 getting worse, and really there doesn't seem to be any kind of plan to resolve it. So let's

00:00:20.400 start maybe with some of the things that Donald Trump has been saying and to focus on that. He said

00:00:30.780 on the 6th of March, there will be no deal with Iran except unconditional surrender. After that

00:00:39.500 and the selection of a great and acceptable leader, we and many of our wonderful and very brave allies

00:00:46.940 and partners will work tirelessly to bring Iran back from the brink of destruction,

00:00:52.880 making it economically bigger, better, and stronger than ever. Make Iran great again.

00:01:01.100 Asking for unconditional surrender in the first week of the war seems to be a little bit extreme,

00:01:06.620 and Trump seems to have gone on a tilt because the president of Iran did something which seems to have

00:01:14.320 been not agreed by the rest of the leadership. He apologized to the countries in the region

00:01:19.960 for Iran's attacks against them and said that Iran would only be attacking countries that

00:01:25.900 were allowing their territories to be used against it, which is kind of understandable.

00:01:34.240 That actually opened a brief window for diplomacy that could have allowed some talks and some

00:01:39.780 communications. But Trump, by insta-reacting, closed that window because he said that Iran is being

00:01:47.640 beat to hell, has apologized, and surrendered to its Middle East neighbors. Iran is going to be the great

00:01:56.060 loser of the Middle East, and this will be for many decades until they surrender or more likely

00:02:03.440 the country. And it tends to be that when you threaten a country with total collapse and total

00:02:09.780 destruction, they don't like it very much. And here we have to sort of remind you of what we said last

00:02:17.040 week about Shia theology. The entirety of the Shia identity is based on the supporters of Ali and his

00:02:28.320 children, the nephew and son-in-law of the Prophet of Islam, Muhammad, having failed to back him in the

00:02:36.960 Battle of Karbala in southern Iraq. And so for the Shia, their slogan is death over humiliation.

00:02:44.480 And what Trump seems to be offering them is either humiliation or death, and they tend to choose death.

00:02:50.000 They could be quite stubborn that way. So, so far, there is no evidence of any talks between the

00:02:58.320 Iranians and the Americans. There is no evidence of any talks between Hezbollah and the Israelis,

00:03:04.960 because Hezbollah has been activated since we last spoke, and it's now going on the offensive against

00:03:10.640 Israel. And things to be quite stuck. So this is a good moment to sort of assess the strategies of the

00:03:18.960 different sides and to try to understand what their real capabilities are. And how does this seem to

00:03:26.240 be going? Now, Trump said that he wants tankers to go through the Strait of Hormuz and just show some

00:03:34.160 guts, by which he means risking getting sunk. And he claims that there is nothing to be afraid of

00:03:41.440 because the Iranians don't have a navy and the US has sunk all of their ships.

00:03:46.080 Here, it's good to look at a map and to sort of compare different things and try to understand

00:03:52.320 what we're talking about. When you had the Houthi shut down Bab el-Mandab, the Strait at the entrance

00:03:59.520 of the Red Sea here, they were operating from this area northwards. And arguably, their main concentration

00:04:07.920 of power was along Hodeidah here, meaning that ships could go through the Strait and then get attacked.

00:04:16.720 And then in all of the instances where the American Navy escorted ships and the Houthis attacked,

00:04:24.160 they were able to go ahead unimpeded. And this was because the Houthi were in control of this territory

00:04:30.240 here from Ma'rib through Sana'a down to Ibn Ta'ez and then up north and this coastal area. And they

00:04:38.240 were firing at ships as they were in transit. The geography of Hormuz is quite different. The geography

00:04:46.560 of Hormuz basically gives the Iranians three different directions from which they can attack

00:04:53.520 ships as they go through the Narrows. And that makes it a lot more risky because the Iranians

00:05:00.080 aren't going to be using their navy, which is incompetent and, as Trump has said, is largely

00:05:07.680 destroyed. The Iranians will be using drones and ballistic missiles fired from pretty close by

00:05:14.400 with lower detection times because the ships are stuck in the middle of the strait. So the risk that is

00:05:20.400 being taken is going to be considerably larger. And while this area in general has been pounded,

00:05:28.960 what we saw with the Houthi was that even after 45 days of American attacks using two aircraft

00:05:35.600 carriers, they were still able to attack ships. Not damage them or sink them while they're being escorted,

00:05:42.960 but still able to conduct enough attacks. And so in this configuration,

00:05:49.040 as the ships go through the bend here, they're going to be a lot more vulnerable. And that's why

00:05:55.200 shippers are hesitant, which is logical at the end of the day. Which brings us to understanding maybe

00:06:04.400 the Iranian strategy and why they are refusing talks. I mean, the conversation between Iran and the US,

00:06:12.080 such as it is, is going so badly that Witkoff and Kushner, who were supposed to visit Israel and maybe see

00:06:18.960 if it's time to end the war and declare victory, simply decided not to show up, which tells you that

00:06:24.960 things aren't really going great. And the Iranian strategy is this, essentially. What they have

00:06:32.560 successfully done is cause enormous damage to the radar systems of the United States throughout the

00:06:44.080 region and to the bases that the United States is using to attack Iran. So they've destroyed a radar

00:06:51.680 in Qatar, another in the UAE, a third one in Kuwait, I believe, another one in Bahrain, another one in

00:06:59.760 Jordan. So the Iranian play at the opening of the war was to attack as many radars as they could,

00:07:08.320 so that detecting and therefore intercepting their missiles would be harder. And to do that,

00:07:14.400 they used a very heavy wave of attacks in the initial days of the war. But now, because the

00:07:20.400 detection capability has been degraded, and even some of the replacement radars have been attacked,

00:07:27.120 they don't need to maintain the same tempo. So I'm seeing here in the comments that, okay,

00:07:32.240 the number of Iranian missiles has gone down and has gone down significantly. And this is absolutely true.

00:07:37.440 The Iranians are firing much less. That's because of two reasons. One of them is their capability has

00:07:45.680 also been degraded. That is not in dispute. The other reason is because they don't need to fire

00:07:53.440 as many missiles as they needed to. What the Iranians are trying to do is to completely paralyze the

00:08:00.080 economies of the Gulf and to shut down energy shipping, to shut down even energy production,

00:08:06.880 to shut down aviation, and therefore to cripple the global economy. That's the play that they're

00:08:13.920 engaged in. And so you're seeing European gas prices spike, not as badly as they spiked during the

00:08:21.920 Russian invasion of Ukraine, for instance, but still a significant enough spike to basically damage

00:08:29.680 every single manufacturer in Europe. There's a very real risk of physical energy shortages,

00:08:36.960 that there simply wouldn't be enough oil on the market to meet demand. This can be ameliorated by

00:08:44.000 various countries opening their strategic petroleum reserves, but even that is seen by the markets as a

00:08:50.960 sign that there is going to be a shortage into the future. And since those markets mainly operate on

00:08:57.040 futures contracts rather than on spot contracts, this price event is going to carry over into the months

00:09:06.880 ahead. Plus there's going to be enormous damage to agriculture. Something like 45% of all urea exports,

00:09:15.120 which are necessary in the production of fertilizers, come through the Strait of Hormuz.

00:09:19.680 And with these being shut in largely because shipping is shut in, the impact of that is going to be

00:09:27.840 higher fertilizer prices right before the planting season, meaning that farmers will need to recover

00:09:34.880 their costs down the line, meaning that food supply for the coming year is going to be damaged.

00:09:42.240 You plant in March, you harvest in September. The inputs that go into the March planting

00:09:49.520 are what you factor in when you price in September. So the food inflation shock wave is going to carry

00:09:58.080 over into the future, just as the energy inflation shock wave is going to carry over into the future.

00:10:05.200 So the Iranian strategy here doesn't require them to maintain the same rate of fire indefinitely.

00:10:13.920 They don't need to do that. What they need to do is to do what they did to Dubai airport.

00:10:19.440 When yesterday there was talk of Dubai airport opening, the Iranians landed a drone in it.

00:10:25.920 And just with one drone, they managed to keep it shut down. They don't need to physically destroy the

00:10:32.240 infrastructure. They need to keep everything bottled in. Requiring the American Navy to go

00:10:38.800 deep into the strait and fight its way through there, especially with the naval base in Bahrain

00:10:45.360 having been largely destroyed and the fuel depots in Bahrain having been largely destroyed,

00:10:51.120 meaning that the ships need to exit the strait to refuel and then come back.

00:10:55.120 That is where the Iranians will actually reveal what capabilities they have against shipping.

00:11:04.880 And so Trump is essentially threatening death and damnation, but we haven't fully seen what the

00:11:12.320 Iranians can do in terms of the strait. Now, if the American Navy starts organizing convoys and they

00:11:19.920 are escorting ships out of the strait and they're keeping it open, there is still going to be a

00:11:25.840 geopolitical risk premium, which means that the prices would be higher because the insurance costs

00:11:31.280 are going to be higher, because every other cost is going to be higher. And my understanding is that

00:11:37.600 insuring a ship that would have cost $250,000 before the war started now costs $3 million.

00:11:45.600 This insurance rate will stay up and costs will stay up and the price of energy will stay up,

00:11:53.920 but not to the same extent. So the Iranians will be able to do continuous damage to the world economy

00:12:00.320 in terms of inflation, even if things get somewhat better. And Trump is asking for unconditional

00:12:07.520 surrender, which fundamentally goes against the ideology of Iran. That's why after the Supreme Leader

00:12:14.800 Ali Khamenei was killed, the assembly of experts who are 88 religious scholars tasked with overseeing the

00:12:22.880 work of the Supreme Leader and selecting his replacement, they chose Ali Khamenei's second son,

00:12:30.240 Mujtaba. And this is a guy who is deeply involved in the inner workings of the regime. He knows the

00:12:37.280 economic side through his influence over his father's financial empire, which extends into

00:12:44.320 all kinds of charitable, quote unquote, establishments that actually are major economic actors in Iran.

00:12:53.760 And they're called the Bunyads. And they control maybe 30% of the economy. Another 30% is controlled

00:13:00.480 by the IRGC and then the 40% is everybody else. He can basically communicate with both the merchant

00:13:12.880 classes and the religious establishment and the IRGC and therefore provide regime continuity.

00:13:20.560 And the message from the Iranians in having elected Mujtaba is a big F you to Trump. No, we're not going to

00:13:30.000 give up. We're not going to surrender. And the reason they feel that they are in a strong enough position

00:13:37.280 is because the tempo of the war has changed. And the reason the tempo of the war has changed is because

00:13:43.360 a lot of these bases and these radars have been successfully or sufficiently damaged in order to

00:13:51.280 make it viable for Iran to use a smaller number of attack drones and ballistic missiles and hypersonic

00:14:00.400 missiles to achieve their objective. And that's kind of what we're seeing in terms of what's coming out of,

00:14:08.000 say, Haaretz. Haaretz is saying that the IDF, the Israeli defense forces,

00:14:17.920 are admitting that they're struggling to intercept Hezbollah's drones from Lebanon,

00:14:22.240 which it's a different interception system than that that is used against Iranian missiles,

00:14:32.320 is what I want to say. Because against Hezbollah drones, you use the Iron Dome system,

00:14:37.440 whereas against the ballistic missiles, you use a combination of HATS, Arrow, and the THAAD interceptors.

00:14:45.840 But they're struggling with those. And the reason that that is important is because when Hezbollah

00:14:51.440 activated, the first thing that it did was attack radar bases in Israel so that it would use the

00:14:59.840 drones to damage their radars to make it easier for the Iranians to attack with bigger missiles.

00:15:07.440 So that's the synergy between the two sides. And one of the things that we're seeing, according to

00:15:12.320 the Israelis, is coordinated attacks between Iran and Hezbollah. Now, why is this important? It's

00:15:19.520 important because it means that there is command, control, and communication that is still ongoing

00:15:27.440 between Iran and Hezbollah, despite the early shock and awe attacks that the Americans and the Israelis

00:15:35.920 have engaged in. If they can still coordinate and cooperate, it means that there is still command and

00:15:42.400 control, which is, I would say, very important. And the question then becomes, how are they communicating?

00:15:52.080 Well, given Hezbollah's humiliation when it tried to buy its own communication equipment like the pagers,

00:15:59.360 they're probably going to rely on China. And if the Chinese systems are difficult to access for

00:16:06.560 American intelligence, then that's a real problem for Israel and the United States.

00:16:13.120 And you see the results of this in this kind of video, where you are seeing

00:16:19.680 serious damage and impact by Iranian missiles in central Tel Aviv. We don't fully know the extent of

00:16:27.840 damage in Israel because, as you know, there's an office of the Israeli military sensor,

00:16:35.200 and he sits on top of all media production, both domestic Israeli and foreign. And if you don't obey the

00:16:43.200 military sensor, you very quickly get deported. So the Chinese sent a crew to see one of the impact sites,

00:16:51.200 where an Iranian missile had fallen, and within five minutes security forces were there telling them

00:16:57.840 to just go away immediately. So the Israelis are hiding the extent of damage that they're taking.

00:17:04.960 Mind you, the Iranians themselves are taking enormous damage. There is no disputing that.

00:17:12.240 The Israelis blew up pretty much the entirety of the fuel storage capability

00:17:17.600 that the Iranians had up and down the country in all kinds of places, especially in Tehran.

00:17:24.000 And they argued that these were linked to refineries that benefit the IRGC.

00:17:29.280 Well, obviously, most things in the Iranian economy either benefit the IRGC,

00:17:35.440 or they benefit the clerical establishment. That's simply how the economy works.

00:17:40.000 In the same way that most things in the Western economy

00:17:43.120 benefit either BlackRock, or Vanguard, or State Street, or one of these types of investors.

00:17:49.360 So it's a bit of a lame argument to say that this doesn't affect civilians,

00:17:54.880 it's only an attack on the IRGC. But that's a separate conversation for later.

00:17:59.520 What seems to be happening, though, is that with the damage to the radars,

00:18:03.840 the Iranians can afford to fire a smaller number of missiles, and to still cause damage with these

00:18:13.200 missiles. And that is evidence of a somewhat successful strategy. Obviously, time will tell

00:18:20.880 how successful it is. But what I'm trying to do here is to explain to you what the Iranian approach

00:18:26.800 to war is, and to say that a decline in the rate of fire from the Iranians doesn't really matter

00:18:35.920 so long as political objectives are being achieved. And the political objectives here

00:18:41.440 are being achieved relatively well. So basically, a bunch of American tankers that were deployed in

00:18:48.400 Saudi Arabia and the Prince Sultan airbase left to Europe. And that's either because the Saudis said,

00:18:57.280 you can no longer operate out of our territory, because we take the Iranian threat to attack our

00:19:03.360 energy infrastructure more severely, quite seriously. Or it's because these bases have

00:19:09.760 been damaged enough by Iranian missiles. But the end result is the same. Because one of the things

00:19:16.480 that the Iranians are working on is to make it obvious to the Gulf states that they can't have security

00:19:23.280 without the Iranians having security. Meaning that if the Gulf states still give the Americans access

00:19:31.200 to their bases and to their airspace and to their territory, they themselves aren't safe.

00:19:37.440 And so what we've seen on the back of that is that basically there's been force majeure declared

00:19:46.320 by Kuwait, there's been force majeure declared by Bahrain, by Iraq, by Qatar, and the Saudis are reducing their production.

00:20:00.320 Essentially, the Iranians have forced the countries of the Middle East to participate in an energy blockade.

00:20:09.200 And the problem, unlike what Trump is saying, isn't that the ships are too cowardly to go through the strait,

00:20:16.400 and risk being hit by missiles and drones by the Iranians? The problem is that the Gulf states

00:20:24.000 have been forced to engage in an energy boycott against the West, because they know that the kinds

00:20:30.560 of missiles that are now being used against Tel Aviv, that are penetrating Israeli air defenses,

00:20:38.560 can be used against their own energy far more effectively. And so you're seeing the Iranians

00:20:44.800 attack some targets still in the Gulf states. The apology from the Iranian President Pezashqian,

00:20:52.080 it was completely disregarded by the IRGC, and the IRGC went on numerous, enormous rants against him.

00:21:02.640 But the end result is that they've succeeded in imposing this energy blockade. And the Gulf states

00:21:08.880 still believe that if they were to try to break that blockade and export energy to the rest of the world,

00:21:16.000 their own infrastructure actually gets destroyed. The energy in the Gulf basically has a number of very

00:21:25.680 vulnerable choke points. These include some storage facilities in the city of Fujairah,

00:21:34.800 here on the other end of Hurmuz, and these have been attacked. They include the Habashan facility

00:21:45.200 somewhere around here in the middle of the UAE, which is kind of an energy city, where pretty much all of the

00:21:52.640 processing of the energy gets done. So it all gets done in this kind of facility. What happens is that

00:22:00.880 there's a bunch of pipelines that go out into the oil fields, the pipelines terminate here in this

00:22:06.880 facility that you see. It gets processed and then it gets pipelined again to the export terminals in Abu Dhabi

00:22:17.040 and on the other side in Fujairah. But that's a huge single point of failure. And if the Iranians hit it

00:22:23.920 with three, five, six ballistic missiles, it's destroyed for five years, ten years. As opposed to what's

00:22:33.200 currently happening, which is hitting storage facilities with a drone, which slows down the

00:22:39.040 process of exports, but it doesn't cause a permanent crippling of the energy industry. And that's a big

00:22:48.400 facility in the UAE. There's another one, Apeke, in Saudi Arabia. There is Mina Ahmadi in Kuwait, which has

00:22:55.760 been kind of hit, but not as badly as it could be. And these various bits and pieces of infrastructure

00:23:02.880 can be destroyed with larger ballistic missiles, which the Iranians still have, which they need

00:23:09.200 to fire at a lower rate, which are the main threat that is being wielded against the region.

00:23:16.880 That's why you're getting an energy boycott, or that's why you're getting an energy embargo.

00:23:23.280 And that still functions, even with a lower rate of attacks.

00:23:28.720 And if you're watching media in the Middle East, which for my sins I have to do,

00:23:36.400 on every single Arab media channel broadcasting out of the region, Arabia in Saudi Arabia,

00:23:42.720 Jazeera in Qatar, Sky News in the UAE, you're constantly hearing the presenters' phones going off

00:23:52.240 with alerts coming in of incomings.

00:23:54.400 And what this means is that there is a small, steady tempo of attacks by drones that are being

00:24:05.920 used to hit all kinds of targets to cause enough damage to make it expensive and to remind these

00:24:14.000 countries that worse can be done against them. So that's how the Iranians are playing their hand.

00:24:20.400 They knocked out a bunch of the radars relatively successfully. Hezbollah is being used to knock out

00:24:27.440 Israeli radars, especially in the north. And that allows them to shut down energy, shipping, and aviation

00:24:40.640 for the whole region. And this is before the Houthi get activated. And the Houthi in Yemen are certainly

00:24:48.960 going to get activated because the Gerald Ford is supposedly on its way from the eastern Mediterranean

00:24:56.880 through the Red Sea and onwards into the Indian Ocean to participate more fully in the attacks against

00:25:03.520 Iran. But what is that going to do? When the Houthi see that ship passing, they're going to throw

00:25:11.920 everything that they have at the carrier and the strike group that is coming with it because carriers

00:25:18.320 never travel on their own. They travel with a pair of destroyers and frigates and aegis cruisers,

00:25:25.520 I meant to say, and all kinds of things. And so they will try to draw down the interceptors

00:25:36.320 that these ships have before they reach the Iranian theater so that the Iranians have an easier time

00:25:44.960 attacking them. And what you're seeing essentially is that this strategy is spreading across the region.

00:25:54.320 So in Iraq, because there is talk of the Kurds being used as foot soldiers to enter into Iran and to

00:26:03.200 try to cause chaos in Iran and engage the Iranian security forces and military in a ground war,

00:26:10.080 you're seeing the Iranians lobbing drones and missiles and so on at the headquarters of the

00:26:18.560 Kurdish militias that are supposed to be used in that role. And things are so bad that the Syrian Kurds who

00:26:26.800 were used by the United States against Islamic State and then discarded when the Turks wanted them

00:26:32.880 discarded. These guys are saying to Iranian Kurds, don't partner with the United States, they're going

00:26:39.440 to turn around and betray you. And all over Iraq, you're seeing attacks against American interests,

00:26:46.880 including in the south. I think Halliburton was hit in Basra. And the idea is to cause so much damage

00:26:54.480 to American business interests all over the region that the region isn't worth staying in for American

00:27:02.560 businesses, meaning that the big lobbying influence that tries to keep the U.S. in the Middle East is

00:27:08.640 gone because they've lost so much. And what we're seeing is that the Iranians have pretty detailed

00:27:14.560 knowledge of Americans movements. So when the Americans moved some personnel to a port in Kuwait,

00:27:23.680 that got hit. When they moved a bunch of guys from the Navy into a hotel in Bahrain, the hotel got hit.

00:27:32.080 And that's because there are so many Persians in the Gulf and there are so many Shia in the Gulf. Plus,

00:27:38.320 probably the Chinese are helping the Iranians with their intelligence and their communications.

00:27:45.440 And if you look at it from a Chinese perspective, they have nothing to lose by backing Iran.

00:27:52.640 The more the Americans get bogged down against Iran, the more they deplete their resources.

00:28:00.720 And the easier it is for China to one day take Taiwan. So they view this as a potential win for them.

00:28:10.560 Plus, the Iranians are not imposing an embargo on exports to China. And China has the option of

00:28:17.520 investing a lot more in Central Asia in order to boost the production of everything from coal to uranium

00:28:24.880 to natural gas to oil to try to compensate for at least some of its dependence on the Middle East.

00:28:32.320 And Russia and China are working closely together and they're building more pipelines between them,

00:28:37.280 meaning that the Russians are going to make the effort in order to prioritize China

00:28:42.320 because they themselves rely on Chinese components for their own military.

00:28:46.880 So what the Americans have done is sort of increase the synergy between China, Central Asia and Russia.

00:28:52.960 And if the nightmare scenario for a maritime power like the United States is a united Eurasia,

00:29:01.440 they are willing into being precisely that nightmare by engaging in this war.

00:29:09.360 And it doesn't seem that there is any kind of strategy on the part of the United States other than

00:29:15.040 destroy them. But you need to have some kind of viable political objective.

00:29:20.320 And when Trump says things like, I'm going to choose the next Iranian supreme leader,

00:29:26.320 and I'm going to make sure that he's on board with me, like it doesn't really work.

00:29:32.880 And if it is going to work, it is going to take a long war, which the global economy cannot afford.

00:29:40.480 So there is no viable process here. If this oil remains shut down,

00:29:51.360 you're going to end up in chaos in countries like Jordan, and Egypt, and Lebanon, and Morocco,

00:30:02.240 and Tunisia, and Bangladesh, and India, and Pakistan. Because all of these countries have something in

00:30:09.440 common, they rely on Gulf investments, they rely on the Gulf states having enough money, and they rely

00:30:17.440 on remittances from the Gulf. So the longer the war continues, the bigger the pressure on these

00:30:24.720 countries' economies. And the Iranian play is we will cause global chaos rather than surrender.

00:30:31.920 And when you are of that mindset, you're probably not going to give up in a week or two.

00:30:39.200 This is probably going to have to be a pretty long war to make somebody with that ideology actually give up.

00:30:45.600 And given that the Shia are quite messianic in their thinking, yeah, you can see this war continuing for a

00:30:53.840 while. And remember, they don't need to maintain the same tempo. Now for China, because the Iranians

00:31:02.880 aren't blockading shipments to them, and because they have Russian shipping as an alternative source of

00:31:08.640 supply, and because if there's going to be a physical shortage, the Russians are going to give

00:31:15.440 priority to the Chinese rather than to South Korea, or Japan, or maybe even India,

00:31:25.520 they're going to end up paying a much higher cost in energy. That is going to make the Russians richer.

00:31:32.000 That is going to make it easier for the Russians to fight in Ukraine,

00:31:35.520 especially because the interceptors and the air defense systems are being prioritized for the

00:31:40.480 Middle East. But the Chinese will survive this. And the Russians would rather allow other countries

00:31:48.240 fail, on which they do not depend for their own manufactured goods, than allow China to fail.

00:31:55.920 So if you're Russia, who are you going to give priority to? Probably India, because India really

00:32:01.600 matters to Russia, as we've explained in the past. The Russian dream is to be able to contain China

00:32:07.760 somewhat, in partnership with India and Iran, and definitely China, because they need China in order to

00:32:18.720 pursue their war in Ukraine. So yes, the Chinese are going to pay a higher cost, but everybody else is

00:32:25.920 going to suffer more than they are. And when it comes to the economy, it's all about your competitive

00:32:32.960 advantage. It's not just about what you're paying, it is also about what everyone else is paying.

00:32:41.200 Because if everyone else is equally suffering, but you're suffering slightly less, you are at a more

00:32:47.920 advantageous position than, say, Europe, which the Russians are obviously going to deprioritize,

00:32:55.920 with the exception of a couple of friendly countries, like maybe Slovakia and Hungary,

00:33:00.960 who are stuck in the middle of their own fight with Ukraine.

00:33:05.280 So there doesn't seem to be a strategy to address this.

00:33:10.080 And on the microchips front, there is a huge amount of helium that comes out of the Gulf.

00:33:18.320 The helium is necessary in various cooling processes in the manufacturing of semiconductors.

00:33:25.360 The Chinese went ahead and tried to build a much bigger helium production capability for their own,

00:33:32.000 and they are going to use that. And you will see countries turning to all kinds of economic nationalism,

00:33:40.080 where any domestic production of critical goods that are made unavailable by the blockade

00:33:49.520 on the Strait of Hormuz are going to be banned to export markets. And they will prioritize domestic markets.

00:33:58.560 And arguably, for Trump, in a midterm year, he doesn't want to see $5 oil.

00:34:05.440 So he will have to restrict energy exports out of the United States

00:34:10.480 in order to make sure that oil prices in the United States are at a good enough price.

00:34:16.640 Of course, all of these impacts are going to be mitigated by the release of

00:34:23.680 enormous amounts of strategic reserves. China has 1.3 billion barrels of oil.

00:34:30.160 Japan has a pretty decent amount of storage. European gas storage is really a problem.

00:34:36.880 And with the Qataris shutting down LNG exports, that's going to be a real problem for them.

00:34:43.520 But you will see people releasing their strategic reserves. But over time, there's going to be shortages.

00:34:49.920 And the shortages are going to trigger more economic nationalism.

00:34:54.320 And what this war ends up doing is that it integrates China, Central Asia and Russia more closely,

00:35:01.520 whereas it disintegrates globalization for other parts of the world.

00:35:04.960 And the Europeans, because of the perfidy and foolishness of their leaders, end up paying a bigger price.

00:35:17.040 And it has to be said that regimes like Iran's are almost never toppled just by an air campaign.

00:35:24.400 It doesn't really work that way. To actually impose your will on somebody, you have to deploy soldiers on the ground.

00:35:35.200 Or you have to impose regime change by just killing enough of the leadership.

00:35:39.840 But as we said in the previous episode, the command of the IRGC has been deliberately decentralized since 2008,

00:35:51.360 because they've been worried about a decapitation strike for that long.

00:35:54.720 And the more the Americans kill political leaders in Iran, the stronger the IRGC becomes.

00:36:02.720 And because they see this as a war for survival, where if they come out of the war without some kind of

00:36:10.960 we were steadfast, we survived, and therefore we were victorious narrative, they're not going to be able to govern Iran.

00:36:18.080 They're going to have to stay in the fight for as long as they physically can.

00:36:25.200 And given that Yemen took 45 days and ended with the Houthis still in power,

00:36:33.040 you can then project and say, well, it's going to take at least 45 days for the Iranians to be fully defeated.

00:36:43.200 Because again, it's not about the volume of missiles.

00:36:47.280 It's about retaining the ability to cause damage if energy exports resume, if flights resume, if shipping resumes.

00:36:57.760 That's the name of the game.

00:37:00.560 And the success of this is shown by the fact that the Americans have left Saudi Arabia's Prince Sultan airbase.

00:37:07.440 And it's shown by the fact that Gulf states like Kuwait and Qatar and Saudi Arabia and Iraq and probably the UAE have all had to restrict their exports,

00:37:22.000 even though this is not the result of just physical damage.

00:37:28.400 It is the result of the Iranians threatening them and saying, if you disobey us, we will destroy you.

00:37:34.560 So this is where we are in the war right now.

00:37:40.080 And it doesn't really seem to be going particularly well for the United States.

00:37:44.880 And all of this is aside from the fact that, you know, even if the Americans destroy Iran and destroy the regime,

00:37:58.720 it may not solve the problem in the Gulf.

00:38:02.800 Let's sort of take a pause here and think about history.

00:38:07.440 Way back when, in between 1100-something and 1250-something, you had something called the Hashashin.

00:38:16.940 Now, who were the Hashashin?

00:38:19.580 They were wonderful people.

00:38:21.980 Legend has it that these guys would, these guys were fanatical Shia, first of all.

00:38:29.700 And legend has it was that these guys would have their people smoke a bunch of dope

00:38:34.780 and then take them to a place where there was a lot of water and a lot of beautiful women and so on,

00:38:41.460 and tell them that this is paradise.

00:38:43.300 Paradise, and that if they wanted to go back to paradise, all they had to do was to assassinate somebody.

00:38:49.840 And they had a string of fortresses, especially along the Syrian coast and in Iran.

00:38:56.200 And what you get if you collapse the Iranian regime could easily be Hashashin with drones, assassins with drones,

00:39:03.540 whereby instead of actually submitting to the United States,

00:39:07.380 these guys go full-on fanatical and use the mountains of Iran and the mountains around the Persian Gulf

00:39:15.000 to just keep lobbing missiles into the region around them

00:39:19.500 and blackmailing all of the countries there

00:39:22.980 into giving them economic concessions and paying them money, otherwise they'd bomb them.

00:39:28.580 So even destroying the Iranians' regime doesn't actually guarantee victory.

00:39:37.120 And that's one possible outcome that we should consider.

00:39:41.260 Another outcome could be some kind of compromise.

00:39:44.960 Some version of Trump always chickens out.

00:39:47.800 Where he sees the damage to the economy, he sees this as deeply unpopular within the Republican Party,

00:39:55.840 although it seems that some people are lying to Trump and convincing him that it actually has support,

00:40:00.380 which is nonsense.

00:40:03.560 But Trump decides that, you know what, this is enough.

00:40:07.220 I can claim victory and walk away and say that this is fine.

00:40:13.740 But then what you get is that the Iranians gain credibility

00:40:18.540 because they would have survived an onslaught by the United States,

00:40:22.780 lost a bunch of their leaders,

00:40:25.580 suffered enormous economic damage,

00:40:27.900 but in the end survived.

00:40:30.400 And depending on how weakened the Iranians are,

00:40:33.860 that could be the exact moment where the Turks make a move on northern Iraq.

00:40:38.580 And we're already hearing noises from Israel that Turkey is the next Iran and Turkey is a threat.

00:40:43.740 And if they control the energy resources that are in this area and in Kirkuk especially,

00:40:50.980 the Turks end up the big winners of this.

00:40:54.620 And you could argue that this might pave the way for a Turkish-Iranian conflict

00:40:58.440 and this war escalating.

00:41:01.320 And you could obviously argue that a stronger Turkey is going to pave the way

00:41:05.500 for a Turkish-Israeli conflict,

00:41:07.840 which is where things are heading right now.

00:41:10.480 And let's say this becomes a three-month war

00:41:14.920 instead of a, you know, two weeks, 15 days war.

00:41:20.960 Well, obviously, the Iranians would have gained a lot more influence over the Gulf

00:41:26.440 because all of the Gulf states would know that unless they invest in Iran

00:41:30.960 and make concessions to the Iranians,

00:41:33.360 their assets are going to be hit.

00:41:35.300 And obviously, if you're Russia and China,

00:41:39.180 you're going to help the Iranian military to rebuild if the regime survives

00:41:43.480 because you want to make the next attempt by the United States more expensive.

00:41:50.740 And indeed, from the Iranian perspective,

00:41:53.460 they don't want to make this a short war.

00:41:56.480 They want to make this a longer war that is so expensive to the United States

00:42:02.720 that they don't come back and do this again.

00:42:05.980 And then the last possibility is that this goes nuclear.

00:42:12.640 And it could go nuclear, for example,

00:42:14.760 because the U.S. decides to walk away from the war,

00:42:17.400 but the Iranians say we're going to continue fighting Israel.

00:42:20.500 Obviously, that would initially, the Americans would say,

00:42:26.800 no, we want to fully back the war.

00:42:28.720 But if the Iranians say we will end the oil blockade if you end the war

00:42:32.840 and we will just keep lobbing missiles into Israel

00:42:35.720 until they give up against Hezbollah,

00:42:39.340 who knows how that plays out?

00:42:42.160 And the Iranians have enriched uranium 60%.

00:42:45.760 A viable bomb requires at least 80% enriched uranium.

00:42:51.020 The first bombs used in World War II were 80% enriched.

00:42:55.560 Maybe they could get to that number.

00:42:58.540 So there is no way to think through

00:43:02.480 how badly can this damage the world

00:43:05.620 because countries like India are going to be screaming

00:43:09.100 over energy prices and food prices.

00:43:11.780 So is Pakistan.

00:43:12.780 So is all of Africa.

00:43:13.900 So is big chunks of Latin America.

00:43:16.560 And if there is a physical oil shortage,

00:43:19.020 that ends up leading to demand destruction

00:43:21.380 because governments will say,

00:43:24.100 well, either we have to supply fuel to industry

00:43:26.780 or we have to heat homes and give electricity to homes.

00:43:32.040 So a long war like this can be immensely destructive,

00:43:37.100 not to mention the various ways in which it could expand.

00:43:41.740 Already Lebanon and Hezbollah are fully at war

00:43:46.760 and Hezbollah seems to be holding its own for now.

00:43:52.540 And they're surprising the Israelis with their capabilities,

00:43:55.920 meaning that they've been able to recover

00:43:59.780 from the earlier defeat.

00:44:02.500 And they have obviously dispersed their military far more.

00:44:08.040 And they're seeing this in more existential terms

00:44:11.040 because the things that are happening in Lebanon

00:44:14.060 is that on the one side,

00:44:16.180 the government is working towards a peace treaty with Israel,

00:44:19.060 which Hezbollah absolutely doesn't want.

00:44:22.380 And if it is going to happen,

00:44:24.300 they want it on their terms.

00:44:26.580 And the Israelis are never going to accept Hezbollah's terms

00:44:29.480 and vice versa.

00:44:30.220 So there's a real threat of this Israel-Lebanon war

00:44:35.380 lasting for a long time.

00:44:37.740 And Iran saying,

00:44:39.320 we're not going to end the war against Israel

00:44:42.260 unless it ends the war against Hezbollah.

00:44:45.580 And then you see different pathways

00:44:47.740 towards this getting worse.

00:44:50.500 So North Lebanon,

00:44:52.140 this Tripoli area here,

00:44:53.960 up through Halba,

00:44:55.980 up through Qibayyat,

00:44:57.320 and even in parts of Hirmil,

00:45:00.160 this is a very Sunni area.

00:45:02.480 And they absolutely hate Hezbollah with a passion.

00:45:06.960 And we're seeing Syrian forces building up along the border

00:45:10.360 with the possibility of them going into Lebanon.

00:45:14.320 What would that do?

00:45:16.800 Well,

00:45:17.680 it could activate the Alawites in Syria

00:45:20.540 and drive them to try to expand southwards

00:45:25.260 with Hezbollah trying to move northwards

00:45:28.500 against the Sunnis.

00:45:31.060 And if this becomes a bad enough situation

00:45:33.580 for the Sunnis

00:45:35.480 along the Syrian coast,

00:45:37.580 and the whole Syrian coast in this area

00:45:39.340 is largely Alawite,

00:45:41.580 then who does that invite in?

00:45:43.960 Well, it invites in Turkey.

00:45:45.520 And if you're Cyprus and you're Greece,

00:45:49.820 you don't want Turkey

00:45:51.000 building up more capability

00:45:53.400 along what is essentially

00:45:56.700 the front line against Cyprus.

00:45:59.820 And that becomes a problem.

00:46:01.900 And already we're seeing

00:46:02.980 that Israel, Cyprus, and Greece

00:46:05.120 are working towards a military alliance

00:46:07.860 to contain Turkey.

00:46:08.900 And they're being backed by France in this.

00:46:10.660 So there's a pathway there

00:46:15.020 for this to end up involving the Turks

00:46:18.320 in a much bigger way.

00:46:20.220 And that quickly becomes disastrous.

00:46:22.760 And then the Israelis have to choose their poison.

00:46:25.920 Would they rather work with the Shia

00:46:27.740 who are hammering them with missiles?

00:46:30.220 Or would they rather risk the Sunnis winning?

00:46:33.520 And the Sunnis ending up

00:46:35.140 in a much stronger position against Israel

00:46:37.340 than the Shia ever could be.

00:46:40.660 And that can obviously rope in Europe

00:46:44.520 if, you know, Article 5 is activated,

00:46:48.400 if the attacks on Cyprus continue.

00:46:52.660 So it doesn't seem to me

00:46:54.080 that anybody has thought through

00:46:55.360 the second order consequences.

00:46:57.660 And indeed, this is natural

00:46:59.540 for the United States.

00:47:01.340 Because for the United States

00:47:03.520 to maintain its position as a superpower,

00:47:05.600 what it needs is chaos

00:47:08.980 in regions all over the world

00:47:11.200 in order to make sure

00:47:13.540 that no regional hegemon

00:47:15.880 anywhere in the world

00:47:17.360 becomes powerful enough

00:47:19.240 to challenge the United States.

00:47:20.800 The problem is that the policy

00:47:24.500 that is being pursued

00:47:25.660 is creating just such a hegemon,

00:47:30.280 which is China,

00:47:31.780 the world's manufacturing superpower,

00:47:34.240 partnering with Russia and Central Asia,

00:47:36.660 the world's natural resource superpowers.

00:47:39.220 while Europe ends up suffering endlessly

00:47:44.280 because of the foolishness of its leaders,

00:47:47.160 because of the waves of immigration,

00:47:49.960 because of higher energy prices,

00:47:52.020 and so on and so forth.

00:47:53.000 So there doesn't seem to be

00:47:55.520 a real plan beyond

00:47:57.120 we're going to bomb the Iranians

00:47:59.460 until they submit.

00:48:01.120 And maybe they will submit.

00:48:03.500 Maybe they do.

00:48:05.300 But if this becomes a three-month war,

00:48:07.480 let alone,

00:48:08.640 as has been talked about in some media,

00:48:10.980 a war that continues until September,

00:48:13.980 then we have a completely transformed world.

00:48:18.180 And with these energy prices

00:48:19.620 and with this level of debt

00:48:21.340 that's in the West,

00:48:23.000 you're going to get

00:48:24.180 a massive amount of inflation

00:48:25.460 and governments are going to be stuck.

00:48:28.920 If they raise interest rates

00:48:30.540 to manage inflation,

00:48:31.740 it'll kill off investment

00:48:32.860 and it will mean

00:48:34.500 that their debt repayments

00:48:35.600 are a lot higher.

00:48:36.840 And if they lower interest rates,

00:48:39.920 well, that is going to lead

00:48:40.900 to even more inflation.

00:48:43.280 And maybe that's their only way

00:48:45.020 of devaluing the debt.

00:48:46.780 And maybe that becomes the argument

00:48:48.580 for digital currencies.

00:48:50.060 We are going to fix prices

00:48:53.120 and do that through digital currency.

00:48:56.400 Who knows what exactly

00:48:57.900 is going to happen here.

00:49:00.120 But it looks like a mess

00:49:01.660 and the Iranians have a strategy

00:49:03.700 and the Americans don't.

00:49:06.520 And the Iranian strategy

00:49:08.300 is based on the premise

00:49:09.720 that at some point,

00:49:12.300 because of the economic pressure,

00:49:13.600 the Americans have to give up.

00:49:14.820 But what if the Americans don't?

00:49:18.100 Because they have

00:49:18.880 their own energy supplies

00:49:20.040 and they can restrict

00:49:21.580 energy exports

00:49:22.400 and let the rest of the world

00:49:23.540 deal with the foolishness

00:49:25.360 of net zero.

00:49:27.680 In which case,

00:49:28.600 everybody else pays the price.

00:49:31.360 The Israelis pay a heavy price.

00:49:34.060 But the U.S. ends up doing well

00:49:36.280 and that is good enough for them.

00:49:38.080 And already we're seeing

00:49:40.220 this war being used

00:49:41.520 as an excuse

00:49:42.200 to basically boost

00:49:43.800 defense production.

00:49:48.500 So they've promised Trump

00:49:50.640 that they're going to quadruple

00:49:52.240 the production of

00:49:53.700 PAC-3 interceptors,

00:49:55.860 FADs,

00:49:57.220 all kinds of other interceptors

00:50:00.000 that are necessary,

00:50:02.180 AMRA missiles,

00:50:03.480 standard missiles,

00:50:05.240 everything that they need.

00:50:07.060 So the war provides

00:50:08.340 a good excuse for that.

00:50:10.520 Boosting that production

00:50:11.520 at a sustainable price

00:50:12.720 requires

00:50:13.520 policing energy prices

00:50:15.640 in the United States,

00:50:16.820 which obviously makes

00:50:17.880 Europe suffer enormously.

00:50:20.520 The U.S. is saying

00:50:22.040 that they're going to accelerate

00:50:23.460 the production of the B-21,

00:50:25.800 their sixth generation bomber.

00:50:29.720 And so in this war,

00:50:32.500 even if the Americans

00:50:33.980 don't achieve anything

00:50:35.380 because they don't have

00:50:36.300 a strategy,

00:50:37.060 they still win.

00:50:40.060 And the problem

00:50:41.020 that the Iranians have

00:50:42.260 is that they're

00:50:43.440 a nation-state

00:50:44.400 fighting as an insurgency.

00:50:47.200 But things don't work

00:50:48.580 that way.

00:50:49.700 You can use insurgents

00:50:51.580 as proxies

00:50:52.660 if you have a nation-state

00:50:54.400 backing them.

00:50:55.800 But when a nation-state

00:50:57.340 turns itself

00:50:58.440 into an insurgency,

00:50:59.520 that's just a suicidal option.

00:51:02.480 Except that with Shia theology,

00:51:04.360 that is the only acceptable option.

00:51:05.920 And the IRGC still has

00:51:09.860 a pretty strong grip on power,

00:51:11.520 and the war is making people

00:51:13.160 more nationalistic.

00:51:15.380 And even Hamas,

00:51:17.000 stuck in Gaza

00:51:17.820 with everything getting destroyed,

00:51:20.360 was able to hold out

00:51:22.140 for 18 months

00:51:22.840 and keep fighting

00:51:24.480 for that duration.

00:51:27.580 So you could easily

00:51:28.620 see a situation

00:51:29.420 in which the Iranians

00:51:30.520 fight for six months,

00:51:32.720 and this thing

00:51:33.860 simply just

00:51:34.580 destroying

00:51:35.680 the world economy.

00:51:40.280 Let's see.

00:51:42.240 Shall we have a look

00:51:43.260 at some of the questions,

00:51:45.120 some of the comments

00:51:45.640 from you guys?

00:51:46.600 What do you guys

00:51:47.240 think about this?

00:51:47.980 Let us see,

00:51:50.860 let us see,

00:51:51.620 let us see.

00:51:53.300 Oh, there's a bunch of them.

00:51:57.400 This almost looks like

00:51:58.540 the U.S. is trying

00:51:59.260 to push Armageddon.

00:52:01.300 Because the Middle East

00:52:02.400 is the linchpin of Armageddon,

00:52:03.860 they may actually succeed.

00:52:06.060 Look,

00:52:06.620 we've spoken about this,

00:52:07.800 I spoke about this

00:52:08.540 on the podcast

00:52:09.560 on Monday,

00:52:10.520 where I discussed

00:52:12.100 how certain

00:52:13.520 groups in Israel

00:52:15.120 want to rebuild

00:52:15.940 the Third Temple,

00:52:16.600 want to build

00:52:17.100 the Third Temple,

00:52:17.980 and how parts

00:52:20.100 of the American

00:52:20.760 administration

00:52:21.460 believe that this

00:52:22.520 is the way to go.

00:52:24.000 I don't think

00:52:24.980 that this is the actual

00:52:25.960 objective of the war,

00:52:27.680 but

00:52:28.520 these kinds of forces

00:52:31.120 drive escalation

00:52:33.220 and these kinds of beliefs

00:52:34.780 have consequences.

00:52:36.880 You can't understand

00:52:38.960 geopolitics

00:52:41.680 without understanding

00:52:42.860 the beliefs

00:52:43.580 that are animating

00:52:44.440 the different actors.

00:52:45.340 and for a big bunch

00:52:48.460 of the Israeli right

00:52:49.400 and a big bunch

00:52:50.420 of the evangelicals,

00:52:52.680 yeah, Armageddon

00:52:53.440 is a good thing.

00:52:54.760 Like I keep saying,

00:52:55.940 if you are certain

00:52:56.840 that, you know,

00:52:57.960 when the Second Coming

00:52:59.960 happens,

00:53:00.480 you're going to be

00:53:01.320 among those

00:53:01.820 who are saved,

00:53:02.760 I fundamentally

00:53:03.560 don't trust you.

00:53:05.080 But that's

00:53:06.080 kind of what we're seeing.

00:53:07.560 can you fully

00:53:10.720 defeat a messianic

00:53:13.000 leadership?

00:53:14.440 That's why I said

00:53:15.640 that one of the options

00:53:16.620 is Hashashin

00:53:17.660 with drones,

00:53:18.600 that they basically

00:53:20.140 get crushed

00:53:22.120 as a state,

00:53:23.200 but if you're Russia

00:53:24.740 and you want to

00:53:25.520 maintain a high

00:53:26.260 oil price,

00:53:27.480 you give these

00:53:28.660 crazies enough

00:53:29.720 drones

00:53:30.260 to cause enough

00:53:31.640 disruption in the

00:53:32.400 region

00:53:32.700 to maintain

00:53:34.640 your position

00:53:35.380 and to blackmail

00:53:36.680 Europe and the West.

00:53:38.600 So that's the

00:53:39.560 thinking here.

00:53:44.800 Let's see.

00:53:45.740 Arizona Desert Rat

00:53:46.800 says,

00:53:48.120 I would love

00:53:48.600 for the U.S.

00:53:49.100 to pull out

00:53:49.520 of the Middle East

00:53:50.060 and let the whole

00:53:50.680 region implode

00:53:51.380 on itself.

00:53:53.400 Unfortunately,

00:53:54.140 you get either

00:53:54.580 the Iranians

00:53:55.160 or the Turks

00:53:55.700 if that happens.

00:53:57.400 However,

00:53:58.040 I know there are

00:53:58.680 plenty of countries

00:53:59.420 and groups

00:53:59.880 who would still

00:54:00.520 attack the U.S.

00:54:01.320 and its allies

00:54:01.860 for simply existing.

00:54:02.820 Yeah, yeah, yeah.

00:54:03.760 Like the Muslims

00:54:04.300 are never going

00:54:05.040 to tolerate

00:54:05.640 the existence

00:54:06.220 of a Jewish state.

00:54:08.180 And even if

00:54:09.060 they were inclined

00:54:09.800 to do that,

00:54:11.260 it wouldn't be

00:54:12.440 this kind of state

00:54:13.580 animated by

00:54:14.880 such a chauvinistic

00:54:16.240 expansionist ideology.

00:54:19.440 That's part

00:54:20.160 of the problem.

00:54:21.960 Iran's plan

00:54:22.680 is clever,

00:54:23.560 although I wonder

00:54:24.360 why wouldn't

00:54:25.640 they fully cripple

00:54:26.500 the other Gulf

00:54:27.040 countries'

00:54:27.480 energy infrastructure?

00:54:29.160 The game here

00:54:30.220 is sort of

00:54:30.720 mutual deterrence.

00:54:32.320 So the Americans

00:54:32.920 began complaining

00:54:33.980 when the Israelis

00:54:35.600 attacked the

00:54:37.000 infrastructure

00:54:38.200 within Iran,

00:54:39.620 the energy

00:54:40.400 infrastructure

00:54:40.880 within Iran,

00:54:41.800 because they understood

00:54:43.260 that the Iranian

00:54:44.420 retaliation to that

00:54:45.780 would be to attack

00:54:47.660 the actual

00:54:49.160 full-on infrastructure

00:54:50.320 in the ports

00:54:51.920 and in the main

00:54:52.760 processing facilities

00:54:53.800 in the Gulf.

00:54:55.860 And so they would

00:54:57.880 try to maintain

00:54:58.980 this leverage

00:54:59.840 and keep this

00:55:00.440 from going

00:55:00.820 completely crazy.

00:55:01.580 The issue is

00:55:03.520 that the Americans

00:55:04.260 are thinking

00:55:04.860 about seizing

00:55:05.580 Khadig Island.

00:55:07.240 Now,

00:55:07.480 Khadig Island

00:55:08.040 is this location

00:55:09.240 just at the

00:55:10.820 very top

00:55:11.760 of the Strait

00:55:13.100 of Hormuz

00:55:13.720 where

00:55:14.860 most of the

00:55:16.620 Iranians'

00:55:17.400 own processing

00:55:18.340 happens.

00:55:19.600 So if you think

00:55:20.180 of Abqeik

00:55:20.840 or Habshan

00:55:21.680 in Saudi Arabia

00:55:23.100 and the UAE

00:55:23.860 respectively,

00:55:25.100 the Iranian

00:55:25.980 version of that

00:55:26.920 is this island

00:55:27.840 called Khadig Island.

00:55:29.340 And the Americans

00:55:30.900 are saying

00:55:31.440 that maybe

00:55:31.900 we just go there

00:55:32.660 and seize it.

00:55:34.140 Well,

00:55:34.380 then you guarantee

00:55:35.120 either that

00:55:37.020 an Iranian

00:55:37.580 insurgency

00:55:38.220 blows up

00:55:38.900 all of their

00:55:39.580 own pipelines

00:55:40.460 to stop

00:55:41.720 that oil

00:55:42.200 from being

00:55:42.720 exploited

00:55:43.360 by the United

00:55:43.940 States

00:55:44.460 or

00:55:45.720 that they

00:55:47.260 blow up

00:55:48.020 the processing

00:55:48.840 facilities

00:55:49.460 in neighboring

00:55:50.620 countries

00:55:51.240 and therefore

00:55:52.560 make this

00:55:53.140 completely

00:55:53.720 zero-sum

00:55:54.340 for everyone

00:55:54.940 and it

00:55:56.880 goes on

00:55:57.380 until

00:55:57.800 you get

00:55:59.000 Hashashin

00:55:59.520 with drones.

00:56:01.020 So that's

00:56:01.800 the play

00:56:02.500 here.

00:56:05.880 This is

00:56:06.520 starting to

00:56:07.280 sound like

00:56:07.840 Trump is

00:56:08.400 speedrunning

00:56:08.900 his own

00:56:09.360 version of

00:56:09.880 Vietnam

00:56:10.200 Afghanistan.

00:56:11.240 In other

00:56:11.540 words,

00:56:11.940 a pointless

00:56:12.420 forever war

00:56:13.160 that lasts

00:56:13.740 a couple

00:56:14.020 of weeks,

00:56:14.460 months,

00:56:14.780 but that

00:56:15.040 costs him

00:56:15.520 and his

00:56:15.740 masters

00:56:16.140 a lot

00:56:17.380 of goodwill.

00:56:19.000 I mean,

00:56:19.300 this is

00:56:19.620 really one

00:56:20.040 of the

00:56:20.180 big problems

00:56:20.620 for the

00:56:20.960 Israelis

00:56:21.340 that nobody

00:56:24.120 is afraid

00:56:25.120 anymore

00:56:25.600 of saying

00:56:27.060 that this,

00:56:28.360 just like

00:56:28.700 the Iraq

00:56:29.180 war,

00:56:29.680 just like

00:56:30.080 the Syria

00:56:30.500 war,

00:56:31.420 just like

00:56:31.900 Libya,

00:56:32.760 was being

00:56:33.500 done for

00:56:33.920 Israel.

00:56:35.660 And if

00:56:36.960 it's done

00:56:37.300 for Israel

00:56:37.920 and the

00:56:38.480 oligarchy

00:56:38.900 is benefiting

00:56:39.500 from it,

00:56:40.620 then the

00:56:41.380 public needs

00:56:41.920 to punish

00:56:42.540 Israel and

00:56:43.260 the oligarchy.

00:56:45.060 And after

00:56:45.920 the financial

00:56:46.460 crisis,

00:56:47.540 the 2008

00:56:48.200 financial

00:56:48.640 crisis,

00:56:49.700 there is

00:56:50.760 so much

00:56:51.340 goodwill

00:56:51.840 lost

00:56:52.440 between

00:56:53.900 the

00:56:54.320 government

00:56:54.700 and the

00:56:55.140 governed

00:56:55.540 all over

00:56:56.260 the world.

00:56:57.380 And this

00:56:58.040 only accelerated

00:56:59.180 with the

00:56:59.640 stupid reaction

00:57:00.300 to COVID

00:57:00.840 that you've

00:57:02.580 reached a

00:57:02.960 point now

00:57:03.580 where the

00:57:05.000 only way to

00:57:05.600 have credibility,

00:57:06.840 politically

00:57:07.100 speaking,

00:57:08.060 is to say

00:57:09.300 that I'm

00:57:10.520 going to

00:57:10.860 punish the

00:57:11.240 oligarchs and

00:57:11.920 dissociate from

00:57:12.600 Israel.

00:57:14.040 That's the

00:57:14.640 only thing

00:57:15.100 that can

00:57:15.440 unite the

00:57:15.940 left and

00:57:16.240 the right

00:57:16.580 and build

00:57:17.060 you a

00:57:17.300 winning

00:57:17.520 electoral

00:57:17.940 coalition.

00:57:18.500 And so

00:57:20.800 yeah,

00:57:22.420 you're

00:57:22.740 absolutely

00:57:23.260 right in

00:57:23.700 your

00:57:23.840 analysis.

00:57:24.500 It is a

00:57:24.880 pointless

00:57:25.120 forever war

00:57:25.820 that costs

00:57:26.440 him and

00:57:27.260 the oligarchs

00:57:28.060 an enormous

00:57:28.540 amount.

00:57:30.880 Arizona

00:57:31.360 desert rat,

00:57:32.240 the U.S.

00:57:32.680 can alleviate

00:57:33.560 the shortages

00:57:34.380 by using

00:57:35.040 its own

00:57:35.460 wells and

00:57:35.920 increasing

00:57:36.240 nuclear.

00:57:38.440 Well,

00:57:39.400 nuclear takes

00:57:40.080 a long time

00:57:40.700 to build.

00:57:41.480 That's the

00:57:41.820 main problem

00:57:42.260 with nuclear.

00:57:43.120 It takes,

00:57:44.640 you know,

00:57:44.920 I think the

00:57:45.640 UAE did it

00:57:46.400 very quickly

00:57:47.020 in seven

00:57:47.780 years,

00:57:48.480 five years,

00:57:49.560 something like

00:57:50.080 that,

00:57:51.100 in partnership

00:57:51.720 with South

00:57:52.180 Korea.

00:57:53.640 So it's

00:57:55.380 possible,

00:57:56.080 but it

00:57:56.460 takes a

00:57:56.800 long time.

00:57:58.200 And the

00:57:58.840 current

00:57:59.220 American

00:57:59.640 production,

00:58:00.900 with this

00:58:02.080 higher oil

00:58:02.780 price,

00:58:03.260 it can be

00:58:03.980 increased

00:58:04.400 further.

00:58:05.360 And that's

00:58:05.680 why the

00:58:06.020 Americans are

00:58:06.620 least affected

00:58:07.380 by this.

00:58:08.480 And the

00:58:08.820 U.S.

00:58:09.000 is going to

00:58:09.400 make money

00:58:09.940 out of

00:58:10.340 this.

00:58:11.320 And that's

00:58:11.920 what's stupid

00:58:12.440 about the

00:58:12.820 Iranian

00:58:13.080 strategy.

00:58:14.320 It's

00:58:14.840 punishing the

00:58:15.360 rest of the

00:58:15.780 world,

00:58:16.140 it's punishing

00:58:16.560 the region,

00:58:17.500 but it

00:58:18.500 isn't punishing

00:58:19.120 the Americans

00:58:19.700 as badly.

00:58:21.400 And the

00:58:22.000 objective here

00:58:22.600 is to

00:58:22.840 create deterrence.

00:58:24.480 So,

00:58:25.260 yes,

00:58:25.720 there are

00:58:26.100 these

00:58:26.540 solutions as

00:58:28.260 far as the

00:58:28.640 U.S.

00:58:28.860 is concerned,

00:58:29.880 but the

00:58:30.760 Chinese also

00:58:31.400 have their

00:58:31.760 own solutions

00:58:32.500 via Central

00:58:33.920 Asia and

00:58:34.340 via Russia.

00:58:35.500 But the

00:58:36.140 Chinese solutions

00:58:36.920 take longer,

00:58:38.140 except that now

00:58:38.880 that this has

00:58:39.320 happened,

00:58:40.320 they're definitely

00:58:41.180 going to

00:58:41.660 pursue them,

00:58:42.680 which in the

00:58:43.740 end makes the

00:58:44.320 entire Gulf

00:58:44.980 poor,

00:58:45.340 which in

00:58:46.720 the end

00:58:47.060 means that

00:58:47.600 all kinds

00:58:48.180 of countries

00:58:48.660 that depend

00:58:49.200 on the Gulf

00:58:49.660 being rich

00:58:50.240 get much

00:58:51.100 less investment

00:58:51.740 and remittances.

00:58:53.640 So,

00:58:54.180 the damage

00:58:55.520 from some

00:58:55.980 of this

00:58:56.280 is probably

00:58:57.100 going to be

00:58:57.600 permanent.

00:58:59.620 Drake

00:59:00.000 Keith says,

00:59:00.740 the point of

00:59:01.160 this war is

00:59:01.800 to keep

00:59:02.200 Netanyahu

00:59:02.760 and Trump

00:59:03.240 out of

00:59:03.620 prison.

00:59:04.500 I don't

00:59:04.940 see any

00:59:05.260 other reason

00:59:05.880 except the

00:59:06.640 insane prophecies

00:59:07.600 the leadership

00:59:08.280 of all sides

00:59:08.920 keep bringing

00:59:09.340 up.

00:59:09.640 for Netanyahu

00:59:12.500 this is,

00:59:13.800 as he has

00:59:14.260 said,

00:59:14.620 a dream

00:59:14.960 come true.

00:59:15.960 This is the

00:59:16.460 fulfillment of

00:59:17.060 all of his

00:59:17.440 dreams,

00:59:17.900 this is the

00:59:18.220 fulfillment of

00:59:18.780 all of his

00:59:19.120 ambitions,

00:59:20.060 except now

00:59:21.520 he's developed

00:59:22.300 an ambition

00:59:22.760 of destroying

00:59:23.300 Turkey,

00:59:24.020 which is a

00:59:24.720 whole different

00:59:25.080 ballgame.

00:59:27.140 And you can

00:59:27.800 see that if

00:59:28.300 this works

00:59:28.860 against Iran,

00:59:30.180 they're going

00:59:30.640 to try to do

00:59:31.220 the same

00:59:31.540 against Turkey

00:59:32.240 in the

00:59:33.620 foreseeable

00:59:34.100 future.

00:59:34.560 And basically,

00:59:36.440 as I said

00:59:37.000 on the

00:59:37.340 Peter McCormack

00:59:38.060 show,

00:59:39.100 no matter

00:59:40.500 what you

00:59:40.900 do,

00:59:41.580 no matter

00:59:41.940 who you

00:59:42.280 vote for,

00:59:42.860 you get

00:59:43.120 John McCain.

00:59:44.700 Because remember,

00:59:46.160 when it comes

00:59:46.980 to Iraq and

00:59:47.460 Afghanistan,

00:59:49.180 George W.

00:59:50.120 Bush promised

00:59:51.240 a more

00:59:51.680 restrained

00:59:52.420 American foreign

00:59:53.100 policy before

00:59:53.900 being elected.

00:59:55.940 Then Obama

00:59:56.820 gets elected

00:59:57.500 and he

00:59:59.220 promises a

00:59:59.820 more restrained

01:00:00.380 foreign policy

01:00:01.140 and he

01:00:02.620 delivers

01:00:03.340 Libya

01:00:04.400 and Syria.

01:00:06.800 And then

01:00:07.620 you got

01:00:08.040 Biden and

01:00:09.080 he actually

01:00:09.620 delivered a

01:00:10.480 withdrawal from

01:00:11.200 Afghanistan

01:00:11.720 in the dumbest

01:00:13.580 way possible,

01:00:14.360 in the most

01:00:14.760 humiliating way

01:00:15.560 possible,

01:00:16.140 and arguably

01:00:16.900 the military

01:00:18.880 wanted it to

01:00:19.780 look humiliating

01:00:20.780 so that they

01:00:21.660 could teach

01:00:22.220 any other

01:00:22.740 president that

01:00:23.360 if you say

01:00:23.800 no to our

01:00:24.320 wars,

01:00:25.120 this is what

01:00:25.980 we will do

01:00:26.360 to you.

01:00:27.640 But then you

01:00:28.400 got Trump

01:00:28.820 again and

01:00:29.980 he delivers

01:00:30.620 an Iran war.

01:00:33.140 So it's

01:00:34.040 getting to

01:00:34.520 a point

01:00:35.020 where voting

01:00:35.900 doesn't

01:00:36.240 matter.

01:00:38.040 And that's

01:00:38.700 a really

01:00:39.060 dangerous

01:00:39.480 point for

01:00:40.140 a democratic

01:00:40.620 system to

01:00:41.160 be in.

01:00:42.440 You've got

01:00:43.120 to throw

01:00:43.540 the voters

01:00:44.100 a bone.

01:00:45.040 You've got

01:00:45.420 to give

01:00:45.800 them some

01:00:46.300 concessions.

01:00:48.560 So regardless

01:00:49.440 of what the

01:00:49.980 point of this

01:00:50.740 war is,

01:00:51.420 if it's to

01:00:51.920 sort of keep

01:00:52.400 Trump and

01:00:52.820 Netanyahu

01:00:53.240 out of prison

01:00:53.700 or whatever,

01:00:55.620 it's leading

01:00:56.460 to a situation

01:00:57.240 where everybody's

01:00:58.020 getting much

01:00:58.460 more radicalized.

01:01:00.740 And objectively,

01:01:01.620 this is not a

01:01:02.140 good thing.

01:01:04.160 Because radicalized

01:01:05.380 people do

01:01:05.900 radical things.

01:01:07.680 And you could

01:01:08.080 argue that things

01:01:08.940 have gotten so

01:01:09.960 bad that there

01:01:10.500 are only radical

01:01:11.100 solutions.

01:01:12.700 But once you

01:01:13.740 get into

01:01:14.320 non-democratic

01:01:15.400 solutions,

01:01:16.820 these are by

01:01:17.600 definition violent.

01:01:19.780 And trust me,

01:01:21.060 you don't want

01:01:22.320 civil war.

01:01:23.620 It's an

01:01:24.320 absolutely horrible

01:01:25.160 thing to have.

01:01:25.900 So the

01:01:29.500 main problem

01:01:30.180 with this

01:01:30.620 war is the

01:01:31.320 extent to

01:01:32.180 which it is

01:01:32.840 discrediting the

01:01:33.720 system as a

01:01:34.440 system.

01:01:36.180 And that's

01:01:37.020 the main

01:01:37.420 impact.

01:01:38.280 And that's

01:01:38.720 how people

01:01:39.120 like Trump

01:01:39.900 and the

01:01:40.440 oligarchy

01:01:40.960 and the

01:01:41.540 Democratic

01:01:41.940 Party and

01:01:43.340 the GOP

01:01:43.860 establishment

01:01:44.500 are going to

01:01:45.720 pay for it.

01:01:47.360 It is going

01:01:48.240 to end up

01:01:48.740 completely

01:01:49.140 discrediting

01:01:49.720 them.

01:01:50.280 It already

01:01:51.040 has discredited

01:01:52.200 them because

01:01:53.660 from a just

01:01:54.300 war theory,

01:01:55.060 there is no

01:01:56.120 justification

01:01:56.560 for this

01:01:57.160 war.

01:01:58.600 The key

01:01:59.700 part of

01:02:00.660 what a just

01:02:01.100 war theory

01:02:01.600 is that it

01:02:03.080 has to be

01:02:03.680 defensive and

01:02:04.380 necessary.

01:02:06.640 And the

01:02:07.660 benefits of

01:02:09.040 going to

01:02:09.560 war have

01:02:10.820 to exceed

01:02:11.420 the costs

01:02:12.020 of war.

01:02:13.220 And there

01:02:13.960 should be a

01:02:14.540 reasonable

01:02:14.880 chance of

01:02:15.540 success.

01:02:16.800 And you

01:02:17.520 should distinguish

01:02:18.220 between

01:02:18.660 combatants and

01:02:19.440 non-combatants.

01:02:21.640 When you

01:02:22.440 bomb the

01:02:23.680 energy

01:02:24.000 facilities,

01:02:25.060 of a

01:02:25.540 country,

01:02:26.920 and when

01:02:28.580 you bomb

01:02:28.920 hospitals and

01:02:29.680 schools,

01:02:30.200 which has

01:02:30.540 already

01:02:30.800 happened,

01:02:31.860 you're not

01:02:32.460 distinguishing

01:02:32.940 between

01:02:33.260 civilians and

01:02:33.780 non-civilians.

01:02:36.260 When you

01:02:37.060 say that

01:02:38.040 we're just

01:02:38.620 going to

01:02:38.900 bomb

01:02:39.400 everybody

01:02:40.120 indefinitely,

01:02:41.600 when there

01:02:42.460 was a

01:02:42.960 political

01:02:43.300 agreement on

01:02:44.300 the table

01:02:44.860 that would

01:02:45.320 have removed

01:02:46.120 a nuclear

01:02:46.580 threat,

01:02:47.960 you can't

01:02:49.980 argue that

01:02:50.500 this was

01:02:50.840 necessary.

01:02:51.280 And by

01:02:53.420 definition,

01:02:54.220 given where

01:02:54.680 the United

01:02:55.020 States is

01:02:55.600 and where

01:02:55.920 Iran is,

01:02:56.980 this is not

01:02:57.440 a defensive

01:02:57.880 war.

01:02:58.940 Because the

01:02:59.560 United States

01:03:00.000 are not

01:03:00.340 defending

01:03:00.740 themselves.

01:03:02.500 You could

01:03:03.160 say, well,

01:03:03.660 they're defending

01:03:04.120 an ally,

01:03:04.900 but it was

01:03:05.640 the ally that

01:03:06.500 said that

01:03:06.840 they were

01:03:07.100 going to

01:03:07.380 attack

01:03:07.720 anyway.

01:03:09.160 And that

01:03:09.800 itself was a

01:03:10.540 revealing

01:03:10.840 statement.

01:03:11.340 When somebody

01:03:11.920 like Rubio

01:03:12.500 says, oh,

01:03:14.140 well, the

01:03:14.800 Israelis were

01:03:15.400 going to do

01:03:15.820 it anyway,

01:03:16.240 you finance

01:03:18.280 them and

01:03:19.020 you give

01:03:19.520 them their

01:03:19.940 weapons.

01:03:20.740 You can

01:03:21.120 say no to

01:03:21.660 them.

01:03:22.560 What you're

01:03:23.040 saying is

01:03:23.560 that you

01:03:23.840 got cucked

01:03:24.400 by the

01:03:24.700 oligarchy.

01:03:26.860 And it's

01:03:27.540 this discrediting

01:03:28.460 of the

01:03:28.820 system that

01:03:30.320 is the

01:03:30.600 main price.

01:03:32.260 And if

01:03:32.520 you're the

01:03:32.880 Iranians,

01:03:33.560 you understand

01:03:34.200 this stuff.

01:03:35.660 Because the

01:03:36.320 Iranians

01:03:36.720 understand things

01:03:37.620 like the

01:03:37.960 American

01:03:38.260 midterms and

01:03:38.960 their impact.

01:03:40.020 They actually

01:03:40.880 get the

01:03:41.440 American

01:03:41.740 political

01:03:42.120 system.

01:03:43.060 And they

01:03:43.680 get Western

01:03:44.340 political

01:03:44.700 systems.

01:03:45.420 They don't

01:03:45.760 approve of

01:03:46.280 them, but

01:03:47.960 they're

01:03:48.180 intellectual

01:03:48.580 enough to

01:03:49.000 understand

01:03:49.400 them.

01:03:51.020 And so

01:03:51.500 if you're

01:03:51.980 Iran and

01:03:53.360 you can't

01:03:53.800 beat the

01:03:54.260 U.S.

01:03:54.580 militarily,

01:03:55.680 you just

01:03:56.600 tear down

01:03:57.140 the system

01:03:57.740 that allows

01:03:58.580 the United

01:03:59.040 States to

01:03:59.600 exercise these

01:04:00.320 wars.

01:04:01.480 And to do

01:04:02.320 that, you

01:04:02.720 need to

01:04:03.000 survive.

01:04:04.480 And that's

01:04:04.860 the blending

01:04:05.400 of political

01:04:06.000 strategy and

01:04:06.660 military

01:04:06.920 strategy,

01:04:07.700 which is

01:04:08.620 why they

01:04:08.960 knocked out

01:04:09.360 their radars

01:04:09.860 first, and

01:04:10.580 now they're

01:04:11.000 okay with a

01:04:11.620 slow rate of

01:04:12.140 fire, because

01:04:13.480 they've already

01:04:14.800 shut down

01:04:15.440 energy,

01:04:16.980 aviation, and

01:04:17.840 shipping in

01:04:18.220 the region.

01:04:20.920 Anyway, that

01:04:22.300 is it from me

01:04:22.840 today.

01:04:23.400 Thank you so

01:04:24.080 much for

01:04:24.380 joining me, and

01:04:26.420 I'll see you

01:04:26.800 again next

01:04:27.260 week.

01:04:27.720 And if you're

01:04:28.200 a first-time

01:04:28.840 viewer, please

01:04:29.460 become a

01:04:29.820 subscriber so

01:04:30.660 that we can

01:04:31.820 talk next

01:04:32.280 week.

01:04:32.540 Take care.

The Podcast of the Lotus Eaters - March 10, 2026

FREEMIUM： Realpolitik #37 ｜ Has Anyone Thought This Through？

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