What Will Be The Economic Cost of A Nuclear Iran

The Economic Cost Of A Nuclear Iran -- Charles Robb, Dennis Ross and Michael Makovsky, Wall Street Journal

Sanctions and U.S. military force carry risks, but Tehran with a bomb would wreak havoc on global markets.

After the looming fiscal cliff, the next major challenge facing the United States will be preventing Iran from obtaining a nuclear weapons capability. Living with a nuclear Iran is strategically untenable. Like the fiscal cliff, this is a matter of both economic and national security. Preventing Iran from acquiring nuclear weapons carries various risks, but inaction has its costs, too—especially to the price of oil and, in turn, to the U.S. economy.

International sanctions against Iran have already restricted its oil exports, reducing global supply and putting upward pressure on oil prices. But a military strike against the Islamic Republic could disrupt the flow of oil in the region, as Iran might retaliate against the West by attempting to close the Strait of Hormuz, through which one-fifth of the world's oil supplies pass.

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My Comment: I am always skeptical of these economic forecasts ... but I do know one thing .... a military confrontation with Iran will not only put the global economy into a recession .... but the cost of such a military conflict will probably escalate (very quickly) into the tens of billions (if not more) in just the first few weeks. Then again .... if a nuclear Iran does use it's nuclear arsenal directly (or indirectly through a terrorist organization) .... the cost will be in the trillions.

Sighhh .... damned if you do .... damned if you do not. Edward Luce from the Financial Times is probably right .... this is President Obama's year of reckoning on Iran.