Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Why There's Resistance to the Iran Nuclear Deal

Politics / Iran Jul 24, 2015 - 05:55 PM GMT

By: ...

Politics

MoneyMorning.com Dr. Kent Moors writes: Years ago, when I was doing monthly analysis on Iran's oil and gas industry, one of the biggest quandaries was trying to make market sense out of what came from the leadership in Tehran.

Well, the past 72 hours and the July 14 Iran nuclear deal have brought me back to those days.

Back then, it was not unusual for Iran's religious and political heads to shoot themselves in the foot economically every time they opened their mouths on policy matters. And Iran remains one of the most convoluted webs of power relationships and brokerages anywhere.


Recent statements from the Iranian Supreme Religious Leader, Ayatollah Ali Khamenei, and Iranian Revolutionary Guard Corps (IRGC) military commander, Major General Mohammad Ali Jafari, have certainly appeared to have thrown a monkey wrench into the recently negotiated nuclear deal between Iran and world powers.

In fact… it is almost as if they want to bait the U.S. Congress into rejecting the deal.

Here's why…

The Situation in Iran Grows Worse

In return for the International Atomic Energy Agency (IAEA) monitoring its nuclear program, Iran for the first time in a decade has a genuine opportunity to increase oil and gas production, investment, and exports. All of which would inject very badly needed revenue into a domestic economy that collapsed some time ago.

As I have noted before, those who have warned about a flood of Iranian oil exports drowning the market simply do not understand how bad matters in Iran actually are.

Field operations are, frankly, a mess. The exchange of domestically trained technical personnel for experienced but now cut-off Western services has been a failure despite Chinese assistance, Iran's broader banking networks are illiquid, and there are few knowledgeable oil people left in Iran's oil ministry or state oil company.

Iranians have known deprivation, crippling inflation, high unemployment, a rapidly devaluing local currency, and the lack of essential products before. Virtually the entire period following the 1979 Revolution has witnessed such fallout.

But there is no question about what the Western sanctions accomplish…

They've made matters even more acute. They significantly restrict Iran's access to foreign oil export markets, cut it off from necessary access to hard currency banking abroad (mandatory since international oil/gas trade is denominated in U.S. dollars), prevent badly needed Western technology and expertise from entering the country, and severely cut into the profitability and revenue flow from the resulting decline of exports.

The leadership has no intention of opening main military compounds to outside inspection bases, nor will it curtail supporting Assad in Syria, Hezbollah in Lebanon, the Houthis in Yemen, or Hamas in Palestine.

The 5+1 (the five permanent members of the U.N. Security Council – the United States, UK, France, China, and Russia – plus Germany) early in the discussions had to decide whether a tangible ability to obstruct any move to an Iranian nuclear device took precedence over curbing Tehran's support of revolutionary movements abroad. The nuclear issue prevailed.

The Security Council's unanimous vote in favor of the pact should have bolstered the chances of the agreement's approval by Iran. Instead, it has unleashed highly provocative statements from the leadership.

Khamenei urges a continued opposition to "U.S. arrogance," claiming the two countries remain 180 degrees apart on just about everything.

Iran's Playing "Charades" with Domestic Consumption

But why is Tehran apparently trying to undermine the deal?

I see three main reasons…

First, much of this can be for domestic consumption. We have experienced strong denunciations in public while serious negotiations were taking place behind the scenes.

For example, consider back at the outset of American involvement in Afghanistan, a nation to the east of Iran in which Tehran has some direct interest. Iran strongly stated that any U.S. attempt to supply the Northern Alliance in the Afghan War by crossing Iranian air space would be considered an act of war.

At the same time, the country had agreed to allow Russian aircraft to cross that air space carrying American supplies to the Northern Alliance.

The problem these days is that some of these folks have been reading their own press releases and have begun to believe what is written in them.

The Power of the "Mullahcracy" Is Absolute

Second, the sanctions have provided some IRGC leadership the opportunity to profit from an extensive smuggling network. The lifting of sanctions would interrupt the money realized. Some of that subsidizes domestic charities, providing the unusual result that the truly needy have come to rely on handouts from smugglers.

But the main reason for these critical statements comes from a third and more fundamentally important source. There is a rising disagreement among the religious hierarchy itself.

Shi’a-majority Iran is unlike other Sunni-majority Muslim states. The ayatollahs wield considerable power; all public decisions must be approved by clerical councils to ensure they are consistent with religious law and the "spirit of the Islamic Revolution."

Normally, most of the clergy would prefer not to become involved in politics. They admit to not being good at it and have little interest in ruling in any traditional sense. But they will intervene if government decisions impact on the fabric of social life (a continuing area of strong religious influence) or orthodoxy.

This has set the conditions for an internecine power struggle within the clerical hierarchy. It is here that Khamenei is decisive. His control of the process and the religious leadership is absolute. There will be no acceptance of the agreement without his consent.

Ayatollah Khamenei: Having His Cake and Eating It, Too

In large measure, economic sanctions have limited impact on matters of primary national importance. The prevailing conclusion among policy analysts was that Iran would be acquiring nuclear weapons threshold capability shortly.

After all, cutting off Japan from oil did not prevent World War II, nor did sanctions result in offsetting conflict in a number of other situations subsequently – Saddam's Iraq, Ghaddafi's Libya, and Putin's adventure in Eastern Ukraine, to name the more obvious recent examples.

Khamenei may be structuring a "having one's cake and eating it, too" scenario. He has already declared that having nuclear weapons is against the teachings of the Koran. If he can entice the U.S. Congress to reject the deal on its end (thereby dividing the branches of government in Washington and guaranteeing a presidential veto), he sticks his finger in the "Great Satan" while occupying the defiant position at home and obtaining economic relief.

The nuclear accord does not end the matter. But it will signal that we have entered new and unchartered waters.

Urgent: From Dr. Kent Moors

"The timing is critical here. After three days of intense discussions with OPEC ministers and multi-national-energy CEOs in London, I saw something I had never seen before: conclusive evidence that the markets are perfectly positioned for a unique trade that I've been waiting to move on for the last seven years… I urge you to act quickly."  See all the details here.

Source :http://moneymorning.com/2015/07/22/three-reasons-behind-resistance-to-the-iran-nuclear-deal/

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules