JOURNAL: Iran, Israel and Missiles

"Hopefully, this event (the Iranian test firing of intermediate rang missiles), it will serve as a catalyst that will finally gel all of the different factors that have been out there that will allow us then to act with our friends and allies in a most effective fashion and modify Iranian behavior, but we cannot allow a second Holocaust." John McCain (July 9th, 2008)

The wild card in any potential conflict between the West and Iran has always been Israel. It alone considers Iran + nuclear weapons an existential threat (the lack of identifiable existential threats to the West is the primary reason conventional warfare in an age of global interconnectivity will become very rare). As a result, Israel has been engaged in a fierce internal debate over whether to accept Iranian nuclear development (which, according to Israeli estimates reaches a tipping point in the spring of 2009) or delay the program through an attack. Iran nearly decided that debate with this week's very provocative and well timed missile tests (particularly of Shahab-3, a missile with a range of 1,250 miles). Missile launches are the ultimate in provocation given that Israeli civilians, less than two years ago, suffered a month long barrage of Iranian missiles -- if this had occurred against US civilians, we would have already attacked/invaded. This, in combination with uncertainty of the upcoming US elections (see McCain's 'greenlight' above), makes an attack by Israel on Iran almost certain.

NOTE: Thomas Barnett is thinking along similar lines with "All systems go for war."

Comments

[londamium]

Weeell, according to Israeli estimates, the Iranian nuclear programme has reached alarming tipping points in 2005, 2006, 2007, this year, next year.....and next year the estimated tipping points will be pushed out to 2010, 2011 etc. Can you explain to me why the Israeli assertions about Iranian tipping points in those earlier years, which have all now passed, led to no action, and why, in this particular instance, it's different?

The Israeli "assertions" are not factual markers of anything substantive, they are political markers designed to pressurise the US into doing something, anything, preferably a reprise of Desert Storm ......just as long as they don't get involved in direct diplomacy and begin the normalisation of diplo-political relations.

Let's be serious about this for a moment - the US has been asserting since the early 1980's that Iran will have a nuclear weapon within 5-10 years, and 28 years later that judgement probably still stands - ie if the Iranians WANT to go down this route, that's what it will take. According to last year's NIE, the Iranians haven't had a weaponisation programme since 2003 - and reading between the lines, this actually means that the US intelligence community assumed that one existed by default ( ie not on the basis of any solid, factual evidence ) up until 2003, and then got the IAEA to check their homework over the subsequent 3 years, the implication being that they got a failing grade.

Iran has been testing Shahab-3's, and variants thereof, every year since 1998 - they tested one last year during another VERY well publicised multiple missile test demo during one of their semi-annual military exercises; it didn't generate quite the level of shrill hysteria that's being expressed this time around. Then again, last year the press didn't go into great hysterical detail about how the IAF summer excercises were a prelude to an attack on Iran, and the January 2007 UK press reports of Israeli preparations for such a strike - the IAF has been flying heroic practice missions in International airspace across the Med to Gibraltar - didn't get any play in the US at all.

Hizbullah using short-range artillery rockets, albeit with surprising strategic effects, during its summer 2006 border war is something of a stretch from "Israel suffered a month long barrage of Iranian missiles"; after all, the rockets stopped when the Israelis stopped bombing and agreed to a ceasefire - something that they could, and should, have done within a couple of days.

Frankly, it's a good thing that the US is more than 50km from the ME, as it would be intervening militarily in the region all the time....oh, wait, it already is.

[B9]

Barnett notes that attack on Iran is "stupid," but that is an understatement. I have written to my elected representatives, subject: "Madness in high places." If this war is pursued, it proves Bush and Cheney are mad, and as rich b*stards who will flee to Paraguay, they are eager to bring on the "end times" just because they can.

Stratfor.com see peace breaking out in the Middle East. Apparently that's too much for W.

It's time for the American people to take back their government.

[Jeff Carr]

What do you think about Robert Kaplan's argument that Israel cannot launch an air strike against Iran without securing the permission of the U.S. (since we control all the entry points), and that SECDEF Gates would never agree to that request. http://thecurrent.theatlantic.com/archives/2008/07/will-israel-attack-iran.php

[frank.leahy]

http://www.globalresearch.ca/index.php?context=va&aid=9437

If the United States attacks Iran either this summer or this fall, the American people had better be prepared for a shock that may perhaps be even greater to the national psyche (and economy) than 9/11. First of all, there will be significant U.S. casualties in the initial invasion. American jets will be shot down and the American pilots who are not killed will be taken prisoner - including female pilots. Iranian Yakhonts 26, Sunburn 22 and Exocet missiles will seek out and strike U.S. naval battle groups bottled up in the narrow waters of the Persian Gulf with very deadly results. American sailors will be killed and U.S. ships will be badly damaged and perhaps sunk. We may even witness the first attack on an American Aircraft carrier since World War II.

[adam]

Frank,

Agreed, but why stop there? A US attack on Iran is going to have an impact a lot closer to home, without any shooting back by the Iranians at all.

Lets take oil. At the moment oil's around $138 a barrel, some days it goes up, some days it goes down, but the trend since the US invasion of Iraq is uniformly upwards. The Russians are saying that they expect oil to hit $200-250 sometime soon, so are Goldman Sachs - and they called $100 a barrel successfully, so they have credibility.

But throw in a US attack on Iran, a major oil producer with a geographical bottleneck that also impacts oil, and its all systems go. Oil prices at that stage are impossible to predict, although there are some saying that $400 a barrel is possible.

$400 a barrel translates into a price of $12 a gallon for the person at the pump. For some Americans that drive long distances to work, that makes work unaffordable. Can people afford that? Can businesses? Can society? If so, for how long? Most people in the US live month-by-month, so whatever happens in the US will be fast, if the Iranians can string things along for just 2-3 months then the US will be hurting badly.

Kosovo, against a smaller, weaker opponent which had already been involved in several wars took 4 months, and in those 4 months the US managed to hit very little Yugoslavian military kit (although they did attack an oil refinery which, in any attack on Iran, will be a sign of complete military madness).

One of the brighter things that the extremist pro-war groupie Rupert Murdoch (owner of Fox News) said in the run-up to war was that the best guarantee of prosperity was oil at $20 a barrel, a price last seen under Clinton (in fact in 1999 oil was just barely over $15 a barrel). That's probably true, so $200-400 a barrel guarantees, presumably, poverty.

I think its fair to say that economic breakdown in the US is far more significant than, say, some fighter pilot being shot down for the average American (and for that matter the planet).

[frank.leahy]

Apologies...I should have noted that my comment above was a quote from the url: http://www.globalresearch.ca/index.php?context=va&aid=9437, not my own words. Worth a read of the whole thing.

[jukic]

Could someone please clarify the following for me? Seymour Hirsch, in an interview on Democracy Now, made it clear that Israel did not have the capabilities of attacking Iran, therefore the US would have to do it. This is because of Iran's anti-aircraft capabilities from what I remember. So why is there all this talk of Israel attacking Iran?

[John Robb]

Jukik. Hirsch is wrong. Israel doesn't need to be complete, they just need to set the ball in motion.

Londamium. Short answer: deep US recession = Obama.

[londamium]

John

Not really a credible scenario - the political risks are, to put it bluntly, monstrous.

However, what you are acknowledging is the rather awkward reality that the Israeli timetable is a political one, tied to the US electoral cycle and the imminent departure of the US administration that was supposedly going to be manly enough to go to Teheran, not a security one that is tied to a set of objective circumstances or actually existing threats.

Now, let's take a look at the timetable over the next few months. Anyone think that there'll be an attack in the run up to or during the Olympics? No, of course not: the Chinese have long memories, and, frankly, any such action against one of their principal crude oil suppliers will be viewed as a supremely hostile act if it takes place during their showpiece.

That takes us up to the end of August - and we're into the depths of the Atlantic hurricane season, we've had two more months of deepening US economic misery and rising fuel prices, winter heating season is round the corner, and the conventions that mark the kick-off of the US presidential election. This means that in the 60-70 day interlude between the closing ceremony and the election the Israelis are going to initiate a sequence of events that will, as a by-product, lead to Americans freezing to death over the winter. I'm sure that more than a few people will make the connection and wonder if this is a better option than engaging in direct diplomacy without silly preconditions ( the only option that, currently, remains off the table ).

I don't have a lot of time for the notion that Cheney will somehow engineer something in the Nov-Jan interlude - they'll have the Obama transition team looking over their shoulders at EVERYTHING, whispering threats in their ears, and this will apply to the Israelis as well.

Was digging through some old notes today, thought that this might be fun:

Israel Wire, Dec. 1998: "Israeli intelligence and security officials have revised their estimates of how long it will take Iran to develop a nuclear weapons capability. The previous estimate of 5-7 years has been changed to 2-3 years."

Yediot Aharanot 16/2/99: "intelligence sources say that Iran has crossed the point of no return in the acquisition of nuclear weapons."

AP 9/7/01: "Israeli Defence Minister, Ben-Eliezer, says Iran could have a nuclear weapon by 2005."

The current attack hysteria resembles a very similar series of flaps in 1995 and April 1996. Highlights from the Times: "an Israeli spokesman says that a Western-led coalition will begin a strike to prevent Iran acquiring nuclear capability. The attack will be on a secret nuclear installatioin in Neka, 100km North-East of Teheran." Shimon Peres is quoted: "Iran has the potential to procure nuclear weapons within four years."

[TM Lutas]

This is Iran signalling its budget needs an extra $5 tacked on the price of a barrel of crude or the mullahs aren't going to be able to live the fat life they've grown accustomed to, nothing more. There will not be a war this year with Iran. The risks are all on the downside. Iran needs to be repulsive in order for its current governing order to survive. Connectivity will kill them so if they sense too much connectivity they hang some more homosexuals, beat some more students, or play the rude boor at diplomatic gatherings.

Their economy depends on high oil prices so if they detect that the speculators' interest is flagging, letting fly a few missiles is just the ticket to shore up the state fisc. This explanation has the advantage of actually fitting the facts over a large number of years' events and not depending on the madness of anybody.

[londamium]

TM

It's a truth universally acknowledged that the Iranian economy is always terrible, whether the price of oil is $15 or $150. I'm quite sure that the Iranians will cope just fine with a terrible economy whilst oil is at $100 or more.

Considering that the Iranian economy managed to survive the Iran-Iraq war, the oil price collapse of the 1980's and the second oil price collapse of the 1990's in the wake of Desert Storm, it's an absolute banker certainty that the price of oil could halve tomorrow without there being any serious domestic ramifications, and the Iranian government would still be balancing its books.

Fun facts: Iran has forex reserves in Europe, the ME, Asia to the tune of $120 billion and virtually no external debt; the US owes it, depending on the price of gold, somewhere in the region of $10 billion. None of this is likely to change any time soon.

Now, let's be realistic here and ponder that the Iranians have been conducting military exercises at least twice a year, EVERY year, since the early 1990's, and have done at least one series of missile tests EVERY year since 1991 without getting much media attention. The current exercises have been scheduled for months; then again, I didn't realise that the Iranians actually controlled the western media!

The most hilarious thing tho' is that "connectivity" will kill the Iranians - you've got this completely backwards. The US has been trying to prevent Iranian connectivity for more than a decade, whilst the Iranians just work around it.

[TM Lutas]

londamium - In short, a country with no external debt and huge forex reserves simply does not impose gasoline rationing. Iran did. Your idea that the Iranians are swimming in cash simply does not comport with externally observable reality.

Yes, the US has been trying to isolate Iran. You seem to think that I entirely agree with US policy. Think again.

Iran cooperates with that isolation in some areas. Iran does not like the idea of Ayatollah Sistani and the hawza of Najaf swaying their youth to more traditional shia beliefs. There's a reason that Sistani is as at risk for assassination and it isn't entirely because of radical Sunni hit squads. It's pretty obvious based on large things and small that Iran is not trying to ingratiate itself with anybody and bites any outside hand that gets too close to them. They'll late pay their outside oil partners or stiff them entirely. They fairly famously shot up a Romanian oil platform when they tried to leave Iranian waters after the Iranians stopped paying for the rig. This is not how you win friends and influence people except to stay the hell away from you.

Regarding the missile launch coverage, the whole "hey we've got a missile that can reach Israel now" Iranian propaganda might have had something to do with the coverage this time. That the Iranians seem to have been lying is just fodder for another round.

And yes, I have no doubt that Iran can gin up a major western media conniption at will. All they need do is whisper about a provocation that will roil oil markets at a set time to people who are sophisticated media players and who speculate in commodities and watch out. Inside knowledge like that is not illegal to have and trading on it is a pretty good guaranteed bet.

[adam]

TM Lutas,

I left this a little while to give the excellent Londamium a chance to reply.

First I have to note that the CIA says that Iran has $60bn in foreign exchange to hand, and that figure is out of date. The one thing we can say about Iran is that they aren't particularly in debt; they ran the Iran-Iraq war on a shoestring compared to Saddam, who easily outspent them 10:1.

Your point about the petrol rationing is a bit of a blind alley - it applies to petrol that is on a very low subsidised price - in Iran its now 11 cents per litre after a 25% price increase - it was less than 8c per litre. International oil prices have rather more than quadrupled since 2002 so a 25% increase isn't much. The rationing was intended to cut down on fuel smuggling out of Iran.

And yes, most nations ration subsidised fuel . The UK certainly does for its famous Red Diesel, we dye the fuel and ration the vehicles that can use the fuel as its a lot simpler for tax purposes. If the dye turns up in your fuel tank and your vehicle isn't on the list, you're guilty of tax evasion.

Heck, there's even a terrorist angle, back in the Troubles the Cheeky Chappies of the IRA used to chemically remove the Red Diesel dye so that the fuel could be flogged for less than the market rate, giving them money for weapons.

So, in short, Iran has at least the same reserves in foreign exchange as the UK does, despite being a poorer nation.

"Iran cooperates with that isolation in some areas. Iran does not like the idea of Ayatollah Sistani and the hawza of Najaf swaying their youth to more traditional shia beliefs."

Good luck on getting that one to fly. Sistani has had to move towards a more activist position in recent years, despite his personal Quietist beliefs. Iran is sending a lot of people on pilgrimage to Najaf - in fact they've just finished building a massive airport there for pilgrims. Its one of the very few construction projects in Iraq that was successful since 2003. Najaf is also a Sadrist stronghold and all the groups expect to make masses of cash out of the pilgrimage trail.

"There's a reason that Sistani is as at risk for assassination and it isn't entirely because of radical Sunni hit squads. It's pretty obvious based on large things and small that Iran is not trying to ingratiate itself with anybody and bites any outside hand that gets too close to them."

No. All the evidence is that Iran works very well with others. They have genuine allies in the government of Iraq, unlike the US. You'll need to come up with better than some vague statement about it being "pretty obvious" when the broadly accepted reality-based position is the reverse.

Look, if Iran wanted Sistani dead (they don't - although Paul Bremer did talk about getting another Grand Ayatollah), he would already be so - he lives in a small compound right in the middle of Basra, now a very pro-Iranian city. The reality is that Iran gets on with Sistani, and Sistani gets on well with SCIRI and other Iranian backed groups as well as the Sadrists. Sometimes he supports them completely, sometimes he'll have a slightly different view, but they all work together pretty well. In the last election he put his name and photograph on their election literature and posters. This time he's less keen for non-runners to be on posters (he's a Quietist, remember).

As for the rest of your assertions the evidence is that Iran gets on with its neighbours, including Syria and Iraq. Syria has recently agreed more defence cooperation with Iran, Iran actively backs groups in Western Afghanistan for things like reconstruction. Iraq's leader pops over to Tehran for high level discussions. In fact Iran's leader can safely enter the Green Zone in Iraq, and has done so.

"They'll late pay their outside oil partners or stiff them entirely."

Shrug. That's the 3rd world for you. Everyone needs an expediter. It even applies outside of the oil business. Back in the 1990s when I worked for a company that had been closely involved in selling torture equipment to Iraq (well, officially and legally it was police riot gear like batons, for the well-known Iraqi riots, and not for some poor sucker in a cell) we had an Iraqi fixer on retainer in order to get paid.

We rang him, he rang his uncle, money got passed around, everyone was happy (except the poor sucker in the cell, but at least he was savaged with quality British equipment, not shoddy French stuff).

"They fairly famously shot up a Romanian oil platform when they tried to leave Iranian waters after the Iranians stopped paying for the rig.This is not how you win friends and influence people except to stay the hell away from you."

Oh God, not this one. I remember when the US far-right went haywire over this in 2006. The facts are that first there was a commercial dispute, then a court order from Iran was sent - by helicopter - to the oil rig, because the Romanians had failed to carry out their contract. That's what we know. The Romanians claim that they were shot at, the Iranians say that they weren't. No independent witnesses were available, neither were bullet holes. Maybe the Iranians missed every shot - its quite possible.

The Rumanian company involved is run by a former confidence trickster who ran a Ponzi scheme, claimed to be bankrupt, and then found $150m to buy six oil drilling platforms - presumably down the back of the sofa. So this is not exactly Mother Theresa as a witness, but he claims to hate Iran, which is enough for the US far-right.

Now this is where it gets interesting. The US far-right couldn't understand this concept, but its worth mentioning now. Iran isn't a monolithic country. The Iranian companies involved are not favourites of the Iranian government (the companies are run by former members of the previous administration) and its highly unlikely that they'd have got military backing for an attack. In reality the year before, in 2005, the Iranian government actually went after Oriental Oil Kish and its vice-president Nasseri because of his close, personal links, with a former US company called Halliburton.

"Regarding the missile launch coverage, the whole "hey we've got a missile that can reach Israel now" Iranian propaganda might have had something to do with the coverage this time. That the Iranians seem to have been lying is just fodder for another round."

Not really. The Iranians have missiles that can reach Israel and, as the Israelis are announcing their plans to attack Iran to everyone, it seems a little ludicrous to say that the Iranians cannot say that they'll shoot back.

Whether the missiles shown in the famous photos are Shahab-3s is still another matter. Its been a few years but as I recall ballistic missiles launch upwards, not at an angle, and every photo I've seen of the Shahab-3 launching has it going straight up.

The ones in the photos are launching at an angle, so my guess would be that they are air defence missiles.

"And yes, I have no doubt that Iran can gin up a major western media conniption at will. ...Inside knowledge like that is not illegal to have and trading on it is a pretty good guaranteed bet."

Unlike the Israelis who, merely have to hint that they are planning an attack on Iran and the oil price goes up. I guess no Israelis or Israeli allies play the commodities market. In this case sauce for the goose is also sauce for the gander.

[TM Lutas]

I believe that the CIA's forex estimates for Iran as much as I believed their estimates on the continuing viability of the USSR. The Iranian economy is very opaque and I suspect that nobody quite knows where all the money's flowing. So it's useful to examine related issues. Does Iran act like a country that's got lots of cash?

If Iran could maintain the gasoline subsidy, the Ahmadinejad government is the one who would have tried. They did not so I find it reasonable that it was because they could not. The ministries are riddled with political true believers and the last major technocrat seems to be the head of the central bank who, so far as I can tell, is pissed that inflation's doubled and the government's spending like there's no tomorrow.

If you could kindly give me a link showing me that there is a legal, unsubsidized petrol market in the IRI then you'd be right, it is a blind alley. But I suspect that you can't because there isn't. Were there a two-tier tax structure as the UK's red/white diesel scheme one could simply fiddle with who could get subsidized fuel and the rich would pay more. Iran did not do that and I've never seen any announcement that they've made such adjustments in the past. Perhaps I've been inattentive. Perhaps you're simply incorrect.

You do seem to like to throw around red herrings though. Paul Bremer's completely irrelevant. As to the Romanian incident, the Iranians seemed to believe (much as they've attempted at Bushehr) that one's partners are obliged to continue working even when you stop paying. That was the nature of the commercial dispute. Unlike the Russians who simply fly out their technicians when they want their money, the Romanians were operating under the disadvantage that oil platforms cannot simply be abandoned at sea.

Serious countries don't do this. People tend not to want to deal with you when this sort of thing happens. But Iran does this and not just with Romanian companies headed by who knows who. If they've got money (which you assert they have) and they have huge problems with oil depletion (which the world's geologist universally assert) then this sort of payments problem should simply not exist. But they do, and with high profile, bet the nation initiatives like oil drilling and the Bushehr nuclear power station. You can wave away the oil rig and frankly if this was the only incident, you'd have a leg to stand on but you can't wave away the missed payments to the Russians over Bushehr and the major slippages in schedule that this has caused.

Furthermore, it's arguable that Total, SA meant Iran's missile tests when it said the conditions were not right to invest in Iran. But hey, the Total pullout doesn't matter much because Iran is swimming in cash and doesn't actually need outside investment. Says you.

As for the missile photos, the fakery of the photo and the Shahab-3 fake are two different falsehoods. You're combining them and trying to cast doubt on your own creation, straw man much?

Your final red herring is about Israeli's playing the commodities market. Who said that Israel couldn't play the same game? But let's be serious here, cui bono? Iran's national fisc benefits when prices go up so it's possible a short term oriented government might play that game. Israel's national fisc gets hammered so beneficiaries would have to be private actors whose interest is separate from their government and who don't care. That's quite a different dynamic so this one even fails as a red herring.

As for Sistani, the bottom line is that he's a religious leader who's publicly and repeatedly said that the IRI's regime is based on a heresy and he's got the education and the influence to make that opinion matter. Iran doesn't dare kill him because he's that revered but they get along with him? Pull the other one.

[shappir]

The whole issue seems pretty straightforward to me:

1. Iran will continue down the path of nuclear armament regardless of any sanctions - they've effectively stated this numerous times

2. Given enough time they will eventually manage to develop such armament

3. As John stated, Israel considers Iran + nuclear weapons an existential threat. Ultimately that beats any other consideration

Therefore the question is not if Israel will attack Iran, the question is when. Or maybe also who: whether it is Israel that conducts the attack or the US.

That Iran may be several years away from nuclear weapons is not that significant in this context. Israel must attack before Iran develops such weapons, and it doesn't matter so much if it's 3 years before or 3 months.

In fact other factors are much more significant, such as Iran's purchase of S-300 anti-aircraft missiles from Russia. Israel may feel compelled to attack before these missiles are delivered and deployed.

[adam]

Shappir,

Sorry, but simply no. There is no evidence that Iran is looking to develop nuclear weapons, and an awful lot of competent people have looked. Both the Russians and IAEA, who are far closer to the deal than anyone else, are clearly saying that Iran isn't looking at nukes.

Furthermore Iran has stated that they are not looking at nuclear weapons. Nuclear weapons are considered to be unislamic in Shi'ite Islam(a fatwa on August 9, 2005; to be fair some ultraconservatives have issued a fatwa saying that nuclear weapons in defence of Islam are perfectly fine but they're not the government).

Nuclear power on the other hand is OK. Its a critical difference.

Israel has been accusing Iran of nuclear weapons development since the Iranian Revolution, the earliest delivery time I can recall is 1983 - which is around 25 years ago. On that basis Iran appears to be, shall we say, rather slow as the Pakistanis developed theirs in 7-10 years. The UK did it in 7-9 years (our nuke was 1954).

The reality appears to be that there is no actual nuclear weapons development in Iran, and that Israel really does like crying wolf. Iran + nuclear weapons may be an existential threat (why? Because Israel keeps threatening Iran...) but its a fantasy in best Power of Nightmares style.

The other side of that is that Israel may attack Iran because they have ordered some defensive missiles is, unfortunately, a sign of just how mad the Israeli leaders are. The missiles that Iran is installing are only useful if you start a war, so starting one because they will have the missiles makes no sense at all.

[adam]

TMLutas,

This is getting a little silly, and long. Lets take this to email.

You start by saying that Iran's broke, but cannot prove it, and then later say that Iran is doing rather well from high oil prices. Which is it? It surely cannot be both. I'm saying that they've done rather well for oil prices recently. I'm also saying that Iran isn't a rich nation (its in what is called the *3rd world*).

Now you may not believe the CIA, although they are - when not run by right wing lunatics - more or less competent enough to count. So who do do you believe? Even Memri (I feel dirty using them) report Irans FOREX at $70bn too. So, do you have any basis for your theory that Iran is broke? Anyone at all?

"Does Iran act like a country that's got lots of cash?"

Actually, yes. Iran acts in a very similar way to Norway and many of the Gulf states. The first thing that they did when they got money was to not spend lots of cash, they saved it. In the case of Iran the money went into the Oil Stabilisation Fund. That is the fund that the Iranians use to keep their national budget going in the poor times, when oil hits $15 a barrel as it did in the 1990s. Back in 2004 Iran had only around $15bn in Foreign Exchange, since then they've had something of a windfall in oil prices.

A reality is that not every nation is as spendthrift as the US (and the UK - we spent our North Sea oil money on Thatchers right wing theories). This is even more true in the Gulf than anywhere else - you may heard of the Sovereign Wealth Funds that the US banks keep selling themselves out to? That's them. The Sovereign Wealth Funds have punted $50-100bn into the US banks since mid-2007. They're also being tapped for a few hundred more billion this year. That's what nations with cash do - invest, not spend.

"If Iran could maintain the gasoline subsidy, the Ahmadinejad government is the one who would have tried."

Head hits desk.... The subsidies are still there! Petrol is 11 cents per gallon. 11! This kind of point is normally where I just laugh at how badly educated Americans actually are, but this is actually embarrassing. Look, the Iranians did try. In fact they have succeeded as the subsidies are still there. This was, incidentally, part of the 4th 5-year plan (2005-2009) on which the government was elected. The IMF advised them on how this change was to be done. Now you might be thinking 'pah, the IMF, evil bastards to a man, first up against the wall when the revolution comes'. And you'd be right. But they do know a thing or two about restructuring national economies.

Do you mean that Ahmadinejad would have kept the subsidies at the lower level if he had infinite money? Sure. What elected politician wouldn't? But infinite money is pretty rare.

If it makes you feel better the previous Iranian administration had completely dropped the ball on this one, so it had to be done now. Ahmadinejad was also one of the lead people arguing for this in the last election as he felt that too much of Iran's budget was taken up by this single issue.

"If you could kindly give me a link showing me that there is a legal, unsubsidized petrol market in the IRI then you'd be right, it is a blind alley."

Well, they tend to hide information like that in books (but http://www.iranvisitor.com is probably best for the basics.

Still, in the interests of education just go to get your local "Rough Guide to Iran". Its there under "getting around".

http://www.amazon.co.uk/Iran-Lonely-Planet-Country-Guide/dp/1741042933/ref=sr_1_2?ie=UTF8&s=books&qid=1216881278&sr=8-2

You see they have this thing called tourism and people hire cars which require petrol. The clever bit is that the tourist (or, lets face it, their chauffeur; anyone that wants to drive in Tehrans traffic when on holiday is Eddie Irvine) has to fill the car up so they need petrol. Its extremely cheap, but not on the rationed rate. About 25c per gallon if memory serves. Its so cheap that worrying about the price isn't a concern. If you're rich enough to drive from London to Pakistan the Iranian petrol price isn't going to break the deal.

I've just suddenly realised that you think that Iran is a monolithic nation with a Soviet style command economy where the state can forbid selling things and make it stick. Not even close. In Iran, if someone turns up at a petrol station with money they get petrol. The Iranians pretty much invented the idea of commerce, so they really do know a thing or two about it.

"But I suspect that you can't because there isn't."

Yeah. There is, but ask yourself this - can I really cannot be bothered to do your basic research for you? You're claiming that, in your world, no-one in Iran can buy petrol outside of the ration. A massive statement like that requires some massive evidence. From this angle you're looking pretty empty.

"Were there a two-tier tax structure as the UK's red/white diesel scheme one could simply fiddle with who could get subsidized fuel and the rich would pay more."

Why on Earth would they want to do that? Iran's not a socialist country. The UK on the other hand has a strong post-war history of progressive taxation (or 'squeezing the rich until the pips squeak' to mis-quote Dennis Healey).

"Iran did not do that and I've never seen any announcement that they've made such adjustments in the past."

Are you really arguing that Iran should copy the basic theories of UK tax law? Errm. OK. Seems a little... demanding. I'm pretty sure that most nations would look a little askance at being ordered to take on the basics of another nations tax theories.

"Perhaps I've been inattentive. Perhaps you're simply incorrect."

More likely you have no idea what you are talking about.

"You do seem to like to throw around red herrings though. Paul Bremer's completely irrelevant."

Not irrelevant. Bremer really did talk about getting another Grand Ayatollah. The position is for life, and as any Englishman knows Thomas a Beckett died for a lot less. Of course as any Iraqi knows Moqtadr al-Sadrs father and brothers died on exactly the same basis under Saddam.

" As to the Romanian incident, the Iranians seemed to believe (much as they've attempted at Bushehr) that one's partners are obliged to continue working even when you stop paying."

There was a court case at the time. The Iranians argued that the Romanians had signed a deal and the Romanians argued that they had signed a deal. Both sides disagreed on what the deal said. My point was, and remains, that its a bit more complex than the American far-right were willing to deal with.

As I recall at the start of this you had Iranians shooting up oil platforms in best US police Waco-style for no reason at all. That didn't happen.

"That was the nature of the commercial dispute. Unlike the Russians who simply fly out their technicians when they want their money, the Romanians were operating under the disadvantage that oil platforms cannot simply be abandoned at sea."

That is the disadvantage of uninsured oil platforms bought with the proceeds of fraud - although the one in question was on its way to Bahrain (I think Bahrain, really cannot be bothered to check). On the other hand its also the disadvantage of courts and legal processes.

You've moved from the Iranians were shooting the place up to accepting that they were doing what, quite legally, they had a right to do. Courts are like that when people try and slip away without letting the judge do his stuff.

"Serious countries don't do this."

Get real, kid. Legal service of warrants and court orders happens every day in on planet Earth. Commercial / civil courts in both the US and UK are quite happy to send police or bailiffs to places to secure assets under legal examination or court ruling if they think that there is a good chance that the asset will do a runner to the detriment of one of the sides.

"People tend not to want to deal with you when this sort of thing happens. But Iran does this and not just with Romanian companies headed by who knows who."

So with groups other than your chosen example? You chose it, not me, and *I* knew who the Romanian company was headed by (hint: its not Voldemort) so when you say 'who knows who'... the answer is me. Its not my fault that your example fell apart on you when it hit cold, cruel reality.

"If they've got money (which you assert they have) and they have huge problems with oil depletion (which the world's geologist universally assert) then this sort of payments problem should simply not exist."

Payments issues and contractual disputes are, unfortunately, almost an eternal issue - death, taxes and law of contract. On planet Earth this is nothing to do with either money or geology but plenty to do with two sides in mutual incomprehension.

You'll have to trust me when I say that there actually is a reason that lawyers exist in every culture and that simply dragging them out and hanging them won't help.

"But they do, and with high profile, bet the nation initiatives like oil drilling and the Bushehr nuclear power station. You can wave away the oil rig and frankly if this was the only incident, you'd have a leg to stand on but you can't wave away the missed payments to the Russians over Bushehr and the major slippages in schedule that this has caused."

Yes, I can. Its another contract dispute. A slightly different one, and far larger in scale, but still its all about the deal. This was, incidentally, hammered out at a meeting with the two national leaders in October 2007. At the highest levels that's what has to happen. The agreement was that the nuclear power station would be finished to the timetable (and as with all big projects... we can always change the timetable! Just my little joke).

Look, if you're arguing that the Russians are worried about Iran then earlier this month (13 July as it happens) Gazprom signed a memorandum of understanding with the National Iranian Oil Company on a joint venture for exploration and development of gas and oil fields in Iran, and to build refining and transport facilities in Russia, Iran, and "third countries" (which we're guessing is probably Libya).

"Furthermore, it's arguable that Total, SA meant Iran's missile tests when it said the conditions were not right to invest in Iran. "

On the other hand its absolutely certain that Total could not get insurance for war-risk on its oil kit for Iran - a war could see Total bankrupted as the US isn't going to miss any opportunity to hit stuff owned by "cheese eating surrender monkeys" in their modern idiom. Throw in the fact that the US has just (this month) closed down a Norwegian oil drilling operation for dealing with Iran and Total can take a hint.

Gazprom doesn't have the same concern - its effectively part of the Russian state so their last-chance insurer is the Russian taxpayer, and they can, frankly, tell the Yanks where to go.

"But hey, the Total pullout doesn't matter much because Iran is swimming in cash and doesn't actually need outside investment. Says you."

Never said that. I said that they have more foreign exchange cash than the UK does (true, we have around $30-45bn). They want outside investment (who doesn't? Even the US is screaming for more outside cash - the US must have $2bn a day, every day) and technical skills (like most 3rd world countries Iran is weak on technical skills). The result: Total pulls out, Gazprom comes in.

"As for the missile photos, the fakery of the photo and the Shahab-3 fake are two different falsehoods. You're combining them and trying to cast doubt on your own creation, straw man much?"

Not really. I was merely pointing out that the missiles that were said to be Shahab-3s weren't. Maybe we read different newspapers but the one I got had the missiles labelled as such in the article. Either way I wondered out loud if the "fake" wasn't actually a Shahab-3s, which was my point.

"Your final red herring is about Israeli's playing the commodities market. Who said that Israel couldn't play the same game?"

Well, you did say that Iran could and strangely forgot to mention Israel. I merely pointed out that both sides could do it - which makes your entire point, at best, extremely biased and your continuing defence of it below, is rather odd.

" But let's be serious here, cui bono? Iran's national fisc benefits when prices go up so it's possible a short term oriented government might play that game."

Finally you're serious? OK. Not sure I am. Its Sunday and frankly last night was a bit of a blur. Still, we can agree that Iran, which sells lots of oil, makes money when the oil prices go up. Imagine that.

A short term government might play what game though? Threaten war to increase prices? Sure. OK. Just to check... name 2 nations that were announcing their plans to "bomb bomb bomb... bomb bomb Iran"?

Really? Its Israel and the US. Gosh and Golly Captain Midnight!

And Iran said that they'd shoot back? Imagine that! Cor! Wow! Blimey O'Reilly! What a shocker! Stone the crows! Weak men swoon at the thought, and strong women are weeping!

Iran's comments on their willingness to shoot back might have rather more to do with the Israelis and the US actually threatening war than oil prices.

The essential problem with your point hasn't altered. Sauce for the goose is still sauce for the gander.

"Israel's national fisc gets hammered so beneficiaries would have to be private actors whose interest is separate from their government and who don't care. That's quite a different dynamic so this one even fails as a red herring."

Simply no. To say that is to misunderstand Israeli politics - the private actors are the same people as the government, they merely don't care much about anyone other than themselves. I think you may be confusing the reality of Israeli government with the TV show "The West Wing". A very small public example: just after ordering the attack on Lebanon the Israeli chief of staff sold all his shares, as he knew that the stock market would fall the next day. He made about £20k on the deal.

Look, reality check, the Israeli government is a right wing one - caring about the ordinary taxpayer isn't on the list.

"As for Sistani, the bottom line is that he's a religious leader who's publicly and repeatedly said that the IRI's regime is based on a heresy and he's got the education and the influence to make that opinion matter."

Sigh. He said that during the longest land war of the 20th century between Iran and Iraq when Iraqi Shi'ites were absolutely vital to the Iraqi military. On the other hand he does work quite closely with the Iranian backed SCIRI group, and was a key element in founding the United Islamic Alliance. Times change.

Look, I can see your confusion. You are having problems with the theological / political dispute that Sistani is having with a dead man. Ayatollah Khomeini was a proponent of a specifically Islamic political theory called velayat-i-faqih. This theory says that governments with authority over Shi'ites should be run by religious clerics in accordance with Islamic law. A more traditional Shi'ite position — often called quietism — holds that clerics shouldn’t get involved in day-to-day affairs and should serve as an authority independent from politics. Sistani's a quietist.

In short its a dispute over the religious nature of government, sort of similar to Republicans arguing that the US is a Christian nation, and everyone reality-based saying its not.

"Iran doesn't dare kill him because he's that revered but they get along with him?
Pull the other one."

Well I never said that they wanted to kill him. I said the exact reverse - Iran *does not* want to kill Sistani - he agrees with them on many things and can be seen as an important ally which has its own views - but really, only the Americans are "with us or against us" kind of people; Iran is rather more nuanced.