"The great Bilderberg secret of 2019 had to do with why, suddenly, the Trump administration has decided that it wants to talk to Iran `with no preconditions.'
"It all has to do with the Strait of Hormuz. Blocking the Strait could cut off oil and gas from Iraq, Kuwait, Bahrain, Qatar and Iran – 20% of the world’s oil. There has been some debate on whether this could occur – whether the US Fifth Fleet, which is stationed nearby, could stop Tehran doing this and if Iran, which has anti-ship missiles on its territory along the northern border of the Persian Gulf, would go that far.
"An American source said a series of studies hit President Trump’s desk and caused panic in Washington. These showed that in the case of the Strait of Hormuz being shut down, whatever the reason, Iran has the power to hammer the world financial system, by causing global trade in derivatives to be blown apart.
"The Bank for International Settlements said last year that the `notional amount outstanding for derivatives contracts' was $542 trillion, although the gross market value was put at just $12.7 trillion. Others suggest it is $1.2 quadrillion or more.
"Tehran has not voiced this `nuclear option' openly. And yet General Qasem Soleimani, head of the Iranian Revolutionary Guards Corps’ Quds Force and a Pentagon bête noire, evoked it in internal Iranian discussions. The information was duly circulated to France, Britain and Germany, the EU-3 members of the Iran nuclear deal (or Joint Comprehensive Plan of Action), also causing a panic.
"Oil derivative specialists know well that if the flow of energy in the Gulf is blocked it could lead to the price of oil reaching $200 a barrel, or much higher over an extended period. Crashing the derivatives market would create an unprecedented global depression. Trump’s former Goldman Sachs Treasury Secretary Steve Mnuchin should know as much.
"And Trump himself seems to have given the game away. He’s now on the record essentially saying that Iran has no strategic value to the US."
--- Pepe Escobar, Asia Times, June 5, 2019
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Well it may not be a sure thing that you can "take to the bank," but Pepe Escobar may be right. Is anyone in their right mind prepared to run the risk of a new global economic and financial catastrophe triggered by a war between the United States and Iran? Undoubtedly, many war games have been played in recent months on just how such a war would proceed. Recent US public leaks of cyber attacks against Iranian computer systems associated with their radar and air defenses raise the question of US capabilities to strike targets inside Iran. But IRGC has vast numbers of fast boats capable of swarming US Navy vessels, commercial tankers and other ships transitting the Straits. The likelihood of a panic on derivatives markets associated with oil price spikes is real. So Pepe is probably addressing the BIG collateral damage associated with the creeping steps towards a new Gulf War.
In the next few days, President Trump will be in Osaka for the G-20 meeting. He is set to meet with Russian President Putin and Chinese President Xi Jinping, among other world leaders. No doubt the prospects of a new Gulf War will be high on the agenda in those private talks. No doubt the economic consequences will be on the minds of all those leaders. Talk about a "lose-lose" proposition.