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US war on Iran will hit everyone in the pocket
To state that it will result in thousands, if not millions, of dead bodies, should be enough to convince that war between the US and Iran is a bad idea.
But if more evidence is needed, we could think of the current world economy as a child on its knees begging for mercy and an outbreak of war would be to put a bullet between its eyes.
Firstly, already inflated oil prices would be driven higher, either due to a physical restriction of supply or the effect of speculation and forward buying as world traders prepare for instability in the Middle East. Production and transport costs across all products and services will increase and those hit hardest would be countries most reliant on imports for their source of fuel, such as South Africa.
Secondly, wars are an expensive hobby and if the US has any hope of overthrowing the Iranian regime it is going to need a lot of finance. Having spent the past few years desperately wringing out any source of cash to bail out failing industries and service critical debt levels, the only option left for the US is to “print” dollars in one form or another. This increase in money supply in an already oversaturated world economy will send inflation levels even higher, decrease real wealth levels, and cause havoc in the currency markets.
The net effect on the value of the dollar itself would depend on two conflicting effects. The increase in supply would theoretically cause it to depreciate, further decreasing the level of dollar-denominated wealth across the world. This is likely to be countered, however, as we saw during the financial crisis, by investors and currency traders fleeing emerging markets and riskier currency holdings in favour of the more secure and stable currencies such as the dollar and euro or gold.
Amid the global turmoil, emerging markets will see investments dry up and their currencies plummet in value without the vibrant global markets to take advantage of the increase in exports that a weaker currency usually promotes.
There is a popular argument that wars support an economy and encourage growth. That the production of arms, employment of soldiers, and training of intelligence and medical services, for example, boost spending in the economy, create employment, and therefore fuel the economy.
Wrong. This is like saying repairing a broken wall in your house is an extension to the building. In reality such expenditure is doing nothing more than circulating money around the economy rather than advancing it and apart from the technological spin-offs from warfare, there is no benefit to the growth of the economy. If the US redistributed just a fraction of its war budget to infrastructure, education and public health, its economy would be growing at a far greater pace than it is now.
A war between the US and Iran is not some distant tiff that is only to be cared about by the sympathetic humanitarian within us. It would be a disastrous clash between two superpowers that both play a significant role in the well-being of the global economy.
Transmitted through the mediums of inflation, exchange rates, investment, international trade, mobility and availability of labour, health, production and real wealth the effects of such a war will be felt by every economically active individual across the globe, whether they control an international resource supply or simply sell newspapers on the street corner.
Warfare as a solution to the doubts over Iran’s nuclear activity is to be vehemently opposed as regardless of your location or political standpoints, it will end up affecting your financial security.