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Iran is a tiny little country that yields an unbelievable amount of power in the world. As the world’s fourth largest crude exporter in the world and OPEC’s second largest oil producer – Iran can have a significant impact on the global economy.

Now……here is the “What if?”

What if Israel finally decides that it cannot allow Iran to move closer to obtaining nuclear weapons…..and takes action. What actions? I suggest that Israel would militarily strike Iran with either conventional or possibly even tactical nuclear weapons. It is possible that due to the secure nature (deep underground facilities) that Iran maintains for its nuclear development – Israel may have no choice but to strike with their nuclear capabilities.

So – what will the effect be should this happens?

I believe the worst case scenario is that Iran could close the shipping lanes traveling through the Strait of Hormuz. Even for a short period of time – this could severely effect the price of gas as well as other petroleum products. So – gas at $5.00, $8.00 – even $10.00 per gallon. This would be disastrous to the economy of the world – let alone the United States.

Massive inflation would occur as suppliers of most all products of any kind begin to raise process to compensate for the rising fuel costs. Imagine continuing to bring home your current paycheck – but having to pay $12.00 for a gallon of milk, $6.50 for a loaf of bread, and $3.75 for a can of soup? How about going to McDonald’s and getting a Happy Meal for $7.00? Obviously – your money will not go very far and providing for your family would become difficult very quickly.

Even if you were able to pay for the gas to get to work and pay for food to feed your family – the domino effect that would occur from the serious decline of consumer spending would create a violent ripple through the US economy. People would not be buying new couches, new iPods, new cars, computers, stereos, game systems, etc. The result of this decrease in consumer spending would be a drastic increase in unemployment due to businesses trying to respond and reduce cost/overhead in order to stay in business.

Will something like this happen? I believe that Israel will eventually strike Iran. To what extent the damage will be and how will Iran react – who knows.

All I know is I will be as prepared as I can possibly be. Hurricane Katrina impacted New Orleans and gas prices rose to levels never seen before – that was nothing compared to what could happen with Iran.

Something to consider……

Take care all -
Rourke