Prime Minister Tony Blair spent the New Year weekend in Palm Beach, Fla.,
where he received many handshakes and messages of goodwill, including from some
of our staff!
He deserved this show of support because he more than anyone in the free
world has remained loyal to America in its war on Terror. Such support has cost
him dearly, perhaps even his position as prime minister.
As we said in a piece about him in Financial Intelligence on Sept. 7, "The
way in which he has maintained the special relationship with the United States
demonstrated political ability of great quality. His loyalty to both President
Clinton and President Bush illustrated a rare ability to rise above party
politics in the nation's interest."
Blair's loyalty is particularly admirable since the British parliament, if
given a "free vote," would have resoundingly reflected the view of the majority
of British people, in voting against the war in Iraq.
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The unpopularity of what is seen by most British people as an unjustified and
senseless war in Iraq, has cost Blair his premiership.
As we said in September, Blair "was the youngest prime minister since Lord
Liverpool in 1812." I was a member of the House of Commons when Blair was first
elected. In my opinion, he was a star from the beginning. My only regret was
that he was not a conservative.
His election as prime minister in 1997 promised bright days ahead when viewed
through Socialist spectacles. Ten years later, the political climate for his
Socialist party is dark, forbidding, and already raining fire and brimstone at
grass roots.
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In September, Blair was all but forced out of office by his Parliamentary
Party. However, he hung on to office with amazing tenacity.
By hanging on to office, Blair has, in the minds of many in his party,
reduced the chances of his successor (most probably Gordon Brown, currently
chancellor of the Exchequer) retaining a majority at the next general election.
Blair himself has come in for even more criticism, as his Socialist promises on
social services, health, and immigration have come unwound.
In these circumstances, one may wonder why he clings to power so tenaciously,
rather than leaving quietly with accolades of his party.
As we said in the November edition of our sister publication, FIR, we believe
it is for a reason that will cause great turmoil, possibly only temporary, in
most world financial markets within the next 20 months (i.e., before the next
U.S. general election).
We have long forecast a U.S. led and supported, but possibly Israeli fronted,
pre-emptive attack against Iran's nuclear facilities.
According to some of our best-placed sources, this attack will happen, before
the next general election.
When it does, expect major turmoil in the world's financial, currency, and
commodity (especially gold) markets. This is one major reason that we have urged
our readers to stay heavily weighted in cash, short-term government bonds and in
gold and "close to the door" in the more market sensitive investments.
We believe that continued British diplomatic support is of great importance
to the American government as it nears a decision point on this strike.
Given the unpopularity of the whole Iraqi adventure in the United Kingdom, we
believe that no new prime minister (like Gordon Brown) would dare risk his
political survival and that of his party by supporting an American-led strike
against Iran.
Therefore, as we said in FIR (November 2006), "Prime Minister Blair, Bush's
greatest ally, is tenaciously holding on to office in the face of massive
demands for his resignation, in order to be ready to support any military move
by Bush against Iran."
We feel that this remains the situation today. While we feel strongly that an
attack will occur, unless Iran agrees to stop its nuclear program, we are
uncertain as to timing.
We always felt the expected attack would be launched after the 2006 American
elections.
Some now feel that every day of waiting will make an air attack less effective
as the Iranians dig their facilities ever deeper. However, with the accuracy of
today's precision guided weapons (PGWs), we understand that repeated bombing
with PGWs can reach down to almost any distance below ground level.
In this respect, we note the recent posting of yet another American carrier
group to the Middle East. We also note a step-up in anti-Iranian political
rhetoric in Washington.
We understand that five air attack waves are now deemed sufficient to reach and
destroy the intended targets.
America can therefore afford to wait in order to engineer a diplomatic excuse,
more acceptable to most important nations.
In this respect, we note the recent posting of yet another American carrier
group to the Middle East. We also note a step-up in anti-Iranian political
rhetoric in Washington.
Assuming the attack goes in as we think it will, what about access to Gulf oil?
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Well, the Allies have a large ground force already in the Gulf and America is
now planning a "troop surge." These would be very conveniently paced if push
comes to shove in Iran.
Finally, we note that the world is currently awash with oil, at falling prices.
So, sooner may well be better than later for the attack to be launched.
If so, stand near the door for some time while the great amount of international
political protest unfolds until the dust settles.
Depending on the military success, however, both Bush and Blair could come out
smelling like roses. The next few months may tell a most interesting story.
Editor's Notes:
