Who Is Winning the US-Iran War?

A quick scorecard, winners and losers:

Winners

Iran - their oil revenues have increased since the outbreak of the war. According to the Wall Street Journal, they're now selling 985,000 barrels of oil per day to China via the rail corridor that runs through the Stans between Iran and China. The marshalling yards for this traffic sit within Turkmenistan, and that's where loads are taken off standard gauge and placed upon the old Soviet wide gauge track. The trains are about 50 wagons long, 66 tons each wagon, and each oil tank holds about 400-500 barrels. Iran charge China's 'teapot' refiners Brent + $1.50. This compares with volumes of about 1.38m bpd via the Strait of Hormuz before the war. Thus, Iran in revenue terms is raking in about the equivalent of 1.5m bpd levels from before the war. They knew they were going to be attacked. Leading up they were shipping a lot of crude and simply parking it out there on the water. The US then lifted sanctions on this oil and Iran profited. They must have laughed. Iran also has rail links with Russia, Pakistan, and via the Caspian Sea and into Russia's Volga-Don canal system and ultimately the Black Sea. Iran now has complete control of the Strait of Hormuz, and it remains shut to those it considers its enemies. 

Israel - they are now the US's only remaining ally in the region. They would have noticed the rise of the UAE, Qatar, Bahrain, Kuwait and in particular, Saudi Arabia. These states have been selling their soft power, with Saudi Arabia using sports promotions like LIV Golf to sell themselves. Israel won't have been happy with this overall, and now they can sit back and watch these states distance themselves from the US.

Russia - they're happy with the high oil prices. They've shut down the pipeline from Kazakhstan to Germany, likely motivated by the incentive of lifting prices.

Losers

USA - their attack has resulted in a massive strategic defeat. They've compromised food security and the world economy generally. American farmers will be livid as the attack on Iran came just before planting - not good timing.

Gulf States - they were mistaken in thinking the US could protect them. Dubai may come back to an extent, but people will never forget, and zero tax doesn't help one bit when a bomb may land on your bonce.

Asia (apart from China) - all Asian countries have been compromised and they'll likely move toward greater independence and away from the US.

China - they'd prefer the Strait of Hormuz to open, for conflict to end. They won't be greatly adversely affected but given their merchant outlook, they'd profit from less conflict, not more.

Oceania - they stand to go out of existence if they don't quickly get their act together. 

Africa - famine is possible, and their oil fields and refineries are only just now being built. This war came at a bad time for them.

Europe - deindustrialisation has proven to be a fool's errand. They're badly exposed with high cost structures and with few allies.

North, South and Central America (apart from the US) - they've been compromised, but countries like Canada have gained from their own oil sales to Asia. The picture is patchy, but overall a loss.

The war has benefited very few interests, and harmed most. End the war now.

What Now for Iran?

It appears Iran is settling in for a long war of attrition. Their drone and missile strikes have fallen away, but they're still continuing, albeit at a lower tempo. What I think they're now doing is setting out to cause enough disruption to effectively destroy the Gulf states, and humble Israel.

The Strait of Hormuz appears to be operating like a toll road. Iran are allowing through only those they approve of. Then, they have overland routes from China and Russia for resupplying its arms industry.

No uprising occurred amongst the people of Iran. This looks to have been a minority protesting, such as students, with no widespread support. That's disappointing and there appears no viable strategy for going in on the ground. 

Another angle relates to Iraq. Various militias aligned with Iran may now rise up. Thus, the US and Israel may have made a rod for their own backs.

All said, oil prices are likely to stay high for the foreseeable future.

Australia Joins War

Is this a wise move? China obtains most of its imported crude from Iran, while Australia relies on China to buy its output from its mines. Won't this aggressive act by Australia result in backlash from China?

Message - Don't Panic

Here's a rational explanation as to why the closing of the Strait of Hormuz is NOT an apocalyptic crisis. Although I'd add that some regions will be far more seriously impacted than others. The Far East, South-east Asia and Oceania being top of that list. China has stopped exporting fuels, which further restricts supply to the region.

How Much Do Chinese Know About the World?

Chinese people, when asked questions in the street, do not seem to know that much. They appear to be as bad as Americans, but with better humour. Rather strangely, they did know 9/11 was New York, but someone thought the capital of the US was Boston.

The person who thought China fought Vietnam in the Vietnam War was nearly right as China did invade Vietnam soon after the Vietnam War ended. But so many thinking India was in Africa was really unforgiveable. I laughed at how often England got a mention; their soft power is clearly still evident.

Silver Price on the Rise

The markets generally know where things are headed and right now there is a rush to delivery of the physicals. China is leading the charge.

Is China Lying About Its Population?

I wonder, does China have a population of 1.4 billion? The claim is that they're lying, and their population is much less. There are ways of working out what their population is, without having a census. We could look at the number of telephone connections, how many cars are on the road, how many flights from city to city, that sort of thing. 

Another way of looking at it is to compare China with India, where we know how many people there are. We can look at the congestion, keeping in mind the difference in territorial space available for occupation. Bear in mind too that both countries have uninhabitable areas, where it is too mountainous, or there is no water.

Below, I've inserted a map, placing India over China. Lifestyle factors have to be taken into account, such as how many people in a family live under one roof. However, it is hard to ignore reports of empty cities in China. You will have seen the stories of cities that are new, that could house a million people, but where they're mostly empty, with only 20-30k living there. When I see such stories, I think they've built in too much capacity, but the population did not grow to fill the space. That may indicate population decline.

I simply don't know the answer, I'm just putting it out there for consideration:

China v India

China Collapsing?

This could be propaganda, but if there is any truth to it, then the world is going into a serious downturn. The below report says that migrant workers in China are going home early, well before the Chinese New Year as there is no work. These workers are itinerant day workers, they work in places like restaurants and construction sites. They drive the Chinese economy.

Migrant workers come from the rural areas into the cities. Their incomes keep their families back in the villages alive. Their early return is a serious problem as they boost the population in rural areas, and they must be fed. This leaves less food crops to be sold. 

Seeing this, I thought Australia is in serious trouble too as they rely on China buying their mine output. Currently, Australia is desperately promoting itself to try and keep immigrants coming in, bringing their skills and money with them. New Zealanders should think very carefully about whether going to Australia is a good idea because if their economy does collapse, there will be no lifeline for them, and the NZ government will not pay for them to come home.

America Develops Permanent Magnet Zero Rare Earth

About fifteen years ago, China unofficially stopped selling rare earths to Japan, heavily impacting their car manufacturing. America took note and started developing permanent magnets that did not require rare earths, the result, Niron Magnetics. 

Niron Magnetics make permanent magnets 50% stronger, using the most magnetic material yet known, iron nitride. They have a factory being built in Sartell, Minnesota.

I always advise, best to not piss-off America too much as they do find a workaround.

https://www.nironmagnetics.com/news

Venezuela's Oil

I've been thinking of a reason the US may be about to take Venezuela, and the only explanation I can think of is that they want its oil. Venezuela has the world's largest oil reserves by far, yet it only pumps daily about 10% of what it should be pumping. That's because, after decades of economic failure, their oil equipment is broken.

Right then, so what I think the US could do is take control of Venezuelan oil. To do this, they wouldn't need to occupy the whole country. All they'd do is control those areas where the oil fields are located, and also control pipelines and port facilities. Study the map to see where those assets are located.

Venezuela is surrounded by adversaries. Guyana is part of the Commonwealth and a former British colony, and likewise, so is Trinidad and Tobago. Then, to the west is Colombia, which is now fully developed and a member of the OECD. Only Brazil may be an ally of Venezuela, but it's through a jungle and undeveloped areas too far south.

The scenario would be to first crush all of Venezuela's oil exports, then occupy the oil fields. They'd need to take out Venezuela's military assets as well, and leadership in Caracas. But they'd just destroy the government and military assets, not take them on head-to-head.

Why is this a brilliant strategic move? If the US does this, then China is cooked. What has this got to do with China?

China controls the so-called renewables sector, wind and solar energy generation, and it controls EV battery production. If the US starts pumping Venezuelan oil at ten times its daily rate right now, the price of gasoline will halve and wipe out the renewables sector overnight. Why would anyone buy an EV, or install solar panels, or a wind turbine when oil is cheap and limitless?

Venezuela's Oil Assets

VW Partially Suspends Production

This is consistent with my claim that no matter what happens, Europe will wriggle around and convince themselves that everything is China's fault.

China's Rare Earth Dominance Explained

New Zealand has rare earths, just no-one knows about it. The whole country is rich in this stuff.

Rare Earth Supply and China

It seems to be taking the US forever to realise that China holds the better hand. America expended its stockpiles of rare earth elements by supplying Ukraine, and others, and now that it needs to replace its ordnance, China says, No, we're not going to help you do that.

The US has painted itself into a corner.

Another Announcement of an Announcement

Once again the New Zealand government announce something that is not yet set in stone. This time they've announced the builder of the new Cook Strait RORO ferries, except there is no signed contract and the actual ships and what they'll look like are as yet unknown.

Wake me up when something definite happens.

https://www.rnz.co.nz/news/national/575895/shipbuilder-for-new-interislander-ferries-announced

Peters said Ferry Holdings Limited and GSI were still in negotiations, which meant details would not be disclosed until they were completed, alongside port agreements with CentrePort and Port Marlborough.

"We intend to make an announcement before the end of this year detailing our agreements and how we have saved the taxpayer billions by cancelling project iReX and returning to the no-nonsense solution we started in May 2020."

Trump's 100% Tariff Gamble

China controls the supply of rare earth elements. The US doesn't seem to have a solid grasp of this and it has also been using its ordnance by supplying Ukraine and Israel, meaning that without China resupplying these critical elements, US production will have to be scaled back.

The world is in a strange place at the moment.

China Introduces More Restrictions on Rare Earths

I'm starting to think the White House is caught in some kind doom loop, where they're agreeing with one another, but everything they're thinking is complete nonsense.

The following video is a classic example; Donald Trump suggests suspending all imports from China, and then some woman pipes up talking about a pending golden age for farmers, or something. 

Firstly, the USA cannot afford to suspend imports from China, and farmers are going bust under current trade policies.

Britain Weak

Sir Iain Duncan Smith points out just how weak the UK has become. It buckles under pressure from China. Is the UK now just China's branch office?

Revealing Themselves

They do reveal themselves in the end, don't they! Former New Zealand Prime Ministers, John Key and Helen Clark are in Beijing at the moment, partying with all the other bad-boy leaders. Now we know who these two were really working for.

Study the photograph, John Key is on the left, while Helen Clark is on the right, both I've marked with an arrow.

Iran: Who Do They Like?

A bit of prejudice here and huge generalisations, but today I was explaining to someone the situation with Iran. In the last 25 years they've developed a lot. Everyone remembers the 1980's, but that's not Iran today. All those old warmongers are retired or long since passed away. 

I explained it like this: Iran looks at its neighbours, Turkmenistan and Afghanistan can be an exercise in trying to get along at the best of times. Pakistan are OK but a bit of a problem too. Armenia shares very little in common, and Azerbaijan relations are frosty as Iran competes for the Caspian Sea against them. Turkey is distrusted, but Iran has grudging respect and needs them for stuff. Iraq is a cousin, maybe even a half-brother, the border is a colonial invention.

Of the major powers, China is a long way away and a source of nice food and cheap stuff, especially electronics. But they're too far away and too different to be fully trusted. Russians are not liked at all and deeply distrusted. Even more hated are the British, they are despised. How so? Look back at the Great Game played out throughout the 1800's. The two Great Powers competed for the region. Britain came out of it controlling Persia, now known as Iran (Afghanistan was found to be uncontrollable). In the early 20th Century, Britain formed the Anglo-Persian Oil Company and began stealing their oil. That company is today branded as BP - you may have heard of it.

But Americans, Iranians quite like them. They hate their government but they like their people. That's why Iranians when moving overseas head to Los Angeles. See Shahs of Sunset as a reality TV show looking at the phenomenon. It was hilarious, almost as good as the Kardashians.

Basically, Iran would like to be left alone, and then they'd start buying American stuff. That's because Americans tend to make stuff that works and it almost always turns up on time. Think Boeing and Caterpillar tractors. 

Long term, how do Iranians see themselves living? Deep down I believe they desire to be Italy, just not the religion. So, they'd end up living like Istanbul instead. 

Anyway, the better approach for the US is to bring Israel to heel and the US start doing business with Iran. 

Predictions 2025

I'm going to stick my neck out and say that I think these predictions will be 100% incorrect: The claim is that China is about to collapse, followed by Brazil. Then, the developing world will collapse. 

How likely is that? Too calamitous, I've been hearing about the imminent collapse of China and Brazil for decades now, and it hasn't happened.