When it comes to following the money, there’s no one better than Simon Dixon. His work in this field is more than comprehensive. Every week he does a deep dive, and he does many interviews as well, like this one. Having said that, I don’t always agree with his predictions, because following the money is rational, but many aspects of the world are not, and humanity definitely is not. There is a differences between planned outcomes and actual eventualities, especially at times of extremely high tension. Wars can easily take on a life of their own, especially when conflicting religious imperatives are involved. Billions of humans becoming increasingly desperate, as food and fuel become increasingly expensive or scarce, can overwhelm the best laid plans of mice and men, so to speak.
Dixon believes that the war in the Gulf is performative, and intended to manage a transition to multipolarity as the centre of power shifts eastwards. I see it as the last gasp of a dying empire determined to cling to its former status is the primary global hegemon by trying to subdue a key node in the power shift. Iran is a critical energy producer in an extremely strategic location geopolitically. It’s a necessary transit country for trade routes of all kinds through Asia. Obliterating it, as Trump has promised to do if Iran chooses not to capitulate completely to unreasonable American demands, would prevent the growing Asian cohesion around finance and trade. This outcome is unlikely however, as the empire is ill-equiped to prevail against a foe it has desperately underestimated. Any renewed attacked would likely result instead in the destruction of the Gulf monarchies and Israel, which is already faltering. Its own armed forces are warning the leadership that its policy of aggression against all its neighbours is tearing the country apart. The Gulf monarchies have no desire to see their energy infrastructure destroyed either, as would happen if Iran is attacked again, and they have bought considerable influence over the empire. If World War Three breaks out it may be more likely to result from an escalation of the war in Ukraine rather than in West Asia.
I agree with Dixon that several parties stand to benefit from the continued closure of Hormuz. Oil exporters are benefitting from higher prices, and prices stand to increase as the futures market eventually converges with the spot price. The World Economic Forum (WEF) is achieving its goal of depriving the population of fossil fuels and material prosperity, and its ultimate goal of population reduction would naturally follow from this. The US empire technical industrial complex may get their chance to implement their surveillance panopticon and pre-crime police state once deprivation results in widespread civil unrest. The latter does depend on the continuation of the fragile AI bubble however, and the build out of 5000 extremely expensive unpopular data centres, for which no adequate energy supply currently exists, nor can one be established in any reasonable timeframe. Data centres are likely to be declared a national security imperative in order to circumvent objections and justify printing trillions to construct them, or to bail out the companies caught in the AI bubble’s circular firing squad.
One of the US empire’s goals of the war is to cut off China’s energy supply and prevent its rise, but this is unlikely to succeed. China has accumulated large reserves of many commodities, including energy, they have land access to energy from both Russia and Iran, and they’ve built out a great deal of ‘renewable’ energy infrastructure. Most of this isn’t actually renewable, as it requires non-renewable inputs, and the lifespan of these projects is limited, but for the time being their emphasis on electrification will be beneficial. China has developed AI very differently, and in a much more useful way, which is also very much cheaper. They apply it primarily to maximising the efficiency of the factory floor rather than encouraging the population to drive themselves into psychosis with it. China’s economy is not doing as well as generally perceived though. It’s real estate market, which represented some 25% of GDP, was structured as a ponzi scheme and now is collapsing. Unrest is growing rapidly in what is a highly authoritarian, low trust country with no state support systems and no means for people to change anything that isn’t working. Wages are going unpaid more and more frequently, adding to the stress on society.
China has already won the trade war with the American empire, due to its control over the supply of rare earth minerals. These are not actually rare, but the ability to refine them is, and China has a virtual monopoly on the process. Building out processing facilities elsewhere will take a long time, and without rare earths, the empire cannot replace the weaponry it’s using up in both Ukraine and the Gulf. Stocks of various missiles and interceptors are already substantially depleted. Power is inevitably moving eastwards, and the US empire appears increasingly to be caught in Thucydides Trap, as President Xi pointed out to Trump on his recent visit to Beijing. The old empire is in decline, but intends to fight that decline with everything it has left. This is a recipe for a very expensive failure, and one that will shred the fabric of American society.
The US is currently engaged in a massive wealthy transfer from the poor to the super-rich, aided by pervasive and obvious corruption by the ruling Epstein class. The shift from expansion to economic contraction always benefits the rich, as they buy up everyone else’s assets at distressed prices. Extraction from the population at large is proceeding rapidly and is going to accelerate until a breaking point is reached. Then either the population is locked down in a police state, or it overwhelmes the elites in a revolution. The ballroom that Trump is obsessing over is actually a bunker meant to protect him from the American people once unrest reaches fever pitch. This could happen sooner rather than later, given that interest rates are going to spike as a risk premium, adding greatly to the cost of debt servicing in a country already drowning in debt at every level. Federally, a mountain of debt originally borrowed under ZIRP conditions (zero interest rate policy) will now have to be rolled over at approximately 5%, which may precipitate a debt doom loop. Attempts to forestall this by pictching stablecoins to the rest of the world at retail level may fail due to the dependence on critical undersea internet cables running through the strait of Hormuz, which Iran is now claiming control over, and could destroy is attacked again.
So many subsystems of reality with global impact are approaching critical failure modes all at once. As boxer Mike Tyson used to say “everyone has a plan until they get punched in the face”. The plans for a relatively smooth transition to a multipolar world may get more than a metaphorical punch to the face. The result could be decades of chaos.
