I can state my position in relatively few words. It appears that it does not really matter much whether Romney or Obama becomes the President. Foreign and defense policies will be unchanged. Economic policy will be very little different as both guys hire the same type of economists and have the same relationship with Wall Street. There will be squabbling over health care and anything that benefits the bottom 80% will be cut back a little.

The Republican primary process has likely annoyed independent voters and the Tea Party is now focused on socially conservative issues. Congrats to those who lured them away from financial and economic matters. The most likely outcome is that neither party gets control of both houses and neither gets 60 seats in the Senate. Conseqently, the current deadlock continues. For those who believe that the current paralysis and drift can't continue, disappointment is likely. The "automatic" spending cuts that are supposed to come by next year are not really carved in stone. The new Congress can simply ignore them or vote them down.

Going forward, fiscal policy will be largely frozen so any effective measures will have to come from the Federal Reserve. The impact on the markets will be interesting once that becomes clear and it will a take a major, painful crisis to break the Congressional logjam.

One caveat: if we have a good-sized, real Black Swan event before November, something could unstick. A mere war with Iran might not be enough. Failure of a few minor European countries might not be enough. Think Big.

Here we are in Year 10 and how time has flown.

There is very little news from Iran and any negotitations. Israeli envoys are visiting European governments to discuss matters nuclear. Either talks are going well or we are now in an ominous moment.

Syria is cooking along nicely. We now have reports that the regime is intercepting arms shipments headed for the rebels which may mean we are near the next phase. The Americans are solemnly and reluctantly mentioning that the UN peace plan appears to be a complete crock. All we lack now is a Turkish incursion and a NATO-led no-fly zone. Tune in next week.

North Korea had an embarassing test failure after launching their peaceful ICBM prototype. The proposed trajectory was interesting: the missile was to travel west of Seoul over open water and impact somewhere between Okinawa and the Philippines. Apparently China and Russia do not want the route passing over their fraternal territories. It blew up about 100 km west of Seoul. This is interesting to some of us as that was pretty much the point in the boost phase where somebody would have hit it with an interceptor missile. So pick one: incompetence, sabotage or interception. Now they appear to be preparing a nuclear test. The last one was a damp squib and another failure or partial failure will go hard on the technical staff. I imagine that there are openings in the rocket program by now.

In Libya, the government will now longer subsidize the militia groups. How very forceful. Of course, the stronger groups just take what they want in their zone of control.

Australia is now planning to withdraw their combat troops from Afghanistan. The last Western country out should turn out the lights. They will not be lit again anytime soon.

Doug Casey is promoting a property development in northern Argentina as a great place to escape future economic and social upheaval. Check out his main web site for details. He has a very elaborate argument as to why Argentina is a great place to go and one that could get better. It seems to boil down to good, cheap wine and beef and hired help that get low wages.

Argentina has some interesting negatives:

1. They regularly default on their debts and go through bouts of hyperinflation.

2. The population seems to alternate fascist military oligarchies with thieving populist oligarchies.

3. Foreigners have the same property rights as locals. The government plunders them whenever they feel the need. As well as seizing YPF from the Spanish, they've emptied private pension plans and used foreign exchange reserves for current expenses.

4. It's against the law to publish any objective analysis of inflation. It's probably running around 20-25% at the moment.

5. Travel restrictions and currency controls have been implemented and get steadily more stringent. There is no guarantee that you will be able to leave as easily as you got in. It's also possible that one can pay North American prices for a Casey casa and then have trouble visiting it. I'm sure that one of the local police will enjoy living in your house.

6. Casey seriously proposes that if New Zealand was capable of a serious turnaround during their financial crisis, so would Argentina. This is silly on the face of it. New Zealand has a long history of stable government and politicians as honest as most places. Argentina has neither.

Really, why wait for The End of the World As We Know It? TEOTWAWKI is already underway in Argentina.

Check out Surviving in Argentina: http://ferfal.blogspot.ca/ - the older posts are very enlightening.

A third U.S. carrier battle group is on its way to the Mediterranean and/or Red Sea. It's built around the USS Enterprise, the first nuclear carrier, which is on its last commission. Since it will go out of service in 2014, the vessel can be viewed as potentially expendable. A variety of escorts and minesweeping assets are also staging to the area, so the Americans will soon have adequate assets in the region for any actions that they may care to take.

There is also a French carrier in the Mediterranean with a small but useful air group and an amphibious landing group based on an American landing ship that is as big and capable as other people's carriers. It might operate some Harriers but will most likely primarily fly helicopters in support of the embarked Marine unit. Overall, this is much more in the way of assets than is strictly required for a show of force.  Many levels of action are possible and it could be that such resources are regarded as the minimum necessary to keep the Straits of Hormuz open.

Since much of the Iranian nuclear program is in hardened facilities, it may be viewed as too difficult or uncertain to prevent them from testing a bomb. Another strategy presents itself, and that is one of destroying their ability to deliver a nuclear weapon. This would mean suppressing the Iranian air force and navy and destroying airport and seaport facilities. Likewise, their rocket and missile forces would need to be hunted down. Rockets big enough to deliver crude nculear weapons (500 kg+) are not small and testing requires fairly large and visible surface installations. All this is within the reach of the U.S. and its allies in the Gulf. It may be that the aforementioned players may not even want Israel involved, especially if it involves flyovers.

Speaking of which, North Korea is getting ready to test an ICBM under the guise of launching a research satellite. I believe that the U.S. and the Japanese may have been responsible for two previous test failures where the missile appeared to blow up durring the boost phase. USN and Japanese Aegis destroyers have a long-range intercept capability during that phase, since the missile has a very large thermal and radar signature immediately after launch and is not moving all that fast. What is different this time is that the Japanese have openly stated that they will shoot the rocket down if it appears to be headed over their territory. There has appeared to be almost no international reaction.

This takes us back to the Persian Gulf. If the Iranian air and sea forces are suppressed, the U.S. is free to base missiles in the area capable of shooting down any Iranian rocket during the boost phase. They really only need to cover the western part of the country and and I would imagine that the emirs would be happy to make a contribution to such efforts.

On another front, the Syrian regime is slowly being destabilized. The rebels are making it difficult for Assad to rule and appear to be growing in strength. Note that it is more important that they appear to be doing so, whether it is true or not. Over a period of time, there could be significant defections form the regime, just as in Libya, leading to a situation where various army units being to fight each other. Once that happens, the end game is in sight.

Libya is actually a good model. A highly centralized state fell apart leaving a power vacuum. The locals have no recent experience of governing any other way, and are split into hundreds of militias and armed groups, often mutually hostile for a whole list of reasons. The French, British and Italians are the sponsors of a number of these groups and are happy if the country remains disorganized and weak. After all, it makes it far easier to dominate the oil industry.

Syria's neighbors wold be quite happy to see it similarly weakened. The alliance with Iran goes away and they would no longer be in a position to intervene in Iraq and Lebanon. The Turks would be more than pleased to dominate the north, eliminating another inconvenient front with Kurdish rebels.

At the heart of the Middle Eastern struggle, we have a three-cornered war. The corners of the triangle are the Shia in Iran, the Sunni Emirs and Kings, and the Israelis. Each has its allies and puppets and overshadowing all, the U.S. attempts to play a vague game that varies between administrations. But they always come back to trying to balance a romantic desire to protect Israel and a more material desire to influence the flow of oil from the Persian Gulf.

Up till now, the war has been waged in the classic cold-war mode. Periodically, the Israelis engage the puppets of the Shia: Hamas in Gaza and Hezbollah in Lebanon. Regular assassination attempts are made on diplomats, scientists and spies though those have become more frequent and deadly. Everyone insults each other and threatens dire consequences. The U.S. has been the wild card for some time, having crushed the regimes in Iraq and Afghanistan. It seems likely, however, that we are about to enter a new phase, on a larger scale.

Current indicators are that the players are preparing their populations for war. A bomb goes off near the HQ of the Islamist party that runs Turkey. Iranian media shows video of a pipeline explosion near a major refinery complex in Saudi Arabia, which the Saudis promptly deny. All but one of the Republican presidential candidates vow to take action against Iran to prevent them from having nuclear weapons. The president of Israel appears on the View to charm the women of America and to let them know what a threat Iran is to all its neighbors. The PM of Israel does a press conference with Obama, who swears eternal friendship. Obama urges calm and no loose talk about war and Netanyahu reiterates that Israel will defend itself in any way that it sees fit, relying only on itself if need be. The list goes on and on.

Iran has had some recent success, with American forces being expelled from Iraq by the Shiite politicians. The Americans were blindsided by the Koran-burning incident which has been used against them with great skill in Afghanistan and elsewhere. Countering that is the relentless media campaign about Syria, with small-scale urban uprisings playing the role of a righteous civil war against an evil opressor. Of course Senator McCain urges the bombing of Syrian forces to alleviate the suffering of the inhabitants and everyone then contemplates what that led to in Libya. Of course, if the Americans disable the air defenses of Syria, Israel has a clear run to Iran, since Iraq has no effective air defenses of any kind.

In the Arabian Sea, the U.S. has two attack carriers and an amphibious landing carrier in position for a campaign against Iran. Two more attack carriers could be in the area within ten days or so and the Gulf emirs would no doubt allow the use of their bases for staging further air power. U.S. strategic bombers are always available to cart large tonnages of GPS-guided bombs.

So let us consider various agendas: the Saudis and Turkey wish to create a friendly Sunni-dominated puppet state in Syria to reduce Iran's reach. The emirs consider an Iranian nuclear capability as an existential threat just as much as the Israelis do. The Iranians feel that they are already surrounded by hostile powers with nuclear weapons and clearly feel that war would unite the population under the rule of the Ayatollahs.

Israel is cultivating the Ajerbaijanis who have a lot of oil, border on Iran, and are related to the Turks. There are many Azeris in Iran. In the southeast, there are a lot of Baluchs. Iranian Baluchs are subverted by Sunni Pakistan, Pakistani Baluchs are subverted by Iran. Pakistani Shia are subject to pogroms by the Sunni majority. Everyone is subverting somebody in Afghanistan. Iran would dearly love to bring their whole nation on side, dominate Shia in the surrounding countries and to weaken their neighbors at the same time. Let us not forget that most of the Saudi oil facilities are in an area inhabited by an oppressed Shia minority and the Shia are substantial minorities or even majorities in most of the Gulf emirates.

It would be possible to continue at length: this situation extends from the Mediterranean to India and inland to Russia and China. In a previous blog entry, I described how a war could begin the Persian Gulf. We can now add Syria to the list as I have trouble believing that Iran would simply allow Assad to be overthrown.

Consider this a war warning. The sequence of events is hard to predict but I'm beginning to think that no one is really in control any longer and the agendas are now controlling their creators, not the other way around. The mullahs, colonels and spymasters will determine our fate.