7 Potential Economic Effects Of A War With Iran

[Purveyor]

As each day passes, war in the Middle East seems increasingly likely. The truth is that Israel will never allow Iran to develop nuclear weapons, and Iran is absolutely determined to continue developing a nuclear program. So right now Israel and Iran are engaged in a really bizarre game of "nuclear chicken" and neither side is showing any sign of blinking. In fact, even prominent world leaders are now openly stating that it is basically inevitable that Israel is going to strike Iran. For example, Italian Prime Minister Silvio Berlusconi recently made the stunning admission that the G8 nations "absolutely believe" that Israel will attack Iran. But a conflict between Israel and Iran would not just affect the Middle East - it would have staggering implications for the rest of the globe.

So just what would a war between Israel and Iran mean for the world economy?

The following are 7 potential economic effects of a conflict between Israel and Iran....

#1) The Price Of Oil Would Skyrocket - One of the very first things a war with Iran would do is that it would severely constrict or even shut down oil shipments through the Strait of Hormuz. Considering the fact that approximately 20% of the world’s oil flows through the Strait of Hormuz, world oil markets would instantly be plunged into a frenzy. In fact, some analysts believe that oil prices would rise to $250 per barrel.

So are you ready to pay 8 or 10 dollars for a gallon of gasoline? What do you think that would do to the U.S. economy?

The truth is that every single transaction that we make every single day is influenced by the price of oil. If the price of oil suddenly doubles or triples that would absolutely devastate the already very fragile U.S. economic system.

#2) Fear Would Explode In World Financial Markets - Even without a war, the dominant force in world financial markets in 2010 is fear. We are already seeing unprecedented volatility in financial markets around the globe, and there is nothing like a war to turn fear into a full-fledged panic. And what happens when panic grips financial markets? What happens is that they crash.

#3) World Trade Would Instantly Seize Up - Once upon a time the economies of the world were relatively self-contained, so a war in one area would not necessarily wreck economies all over the globe. But all of that has changed now. Today, the economies of virtually every nation are highly interdependent. That has some advantages, but it also has a lot of disadvantages.

If a war with Iran did break out, nations all over the globe would start taking sides and world trade would seize up. The global flow of goods and services would be severely interrupted. That would be enough to push many nations around the world into a full-blown depression.

MORE...

http://www.benzinga.com/10/06/353308/7-potential-economic-effects-of-a-war-with-iran

[Vinnie From Indy]

1. You can bet that Goldman-Sachs already has strategies ready to go to exploit

a war with Iran.