Thursday, August 4, 2011

Iran revolutionary guards commander becomes new president of Opec

While the world watched a lone gunmen murdered over 60 people, other developments continued unfettered. Iran taking over as president of OPEC at a time with relations with US at an all-time low does not bode well for the price of oil. The US narrowly missed defaulting for the first time in history just a few days ago. The markets are still quite skittish and consumer confidence is not where President Obama needs it. Even a small increase in the price of oil could have a devastating impact on the US economy. The relations between the US and Iran has been hot for last few years and if cooler heads do not prevail, we could see a conflict over oil.

Egypt and Libya are still unresolved. If you read something other than Western media, you will see a different take on the events in Libya. It makes you wonder if NATO will be able to bring about a regime change through aerial bombardment (and by the way, who really asked for Gaddafi to step down?). On a related note, the Pentagon is trying to cut its budget (again) which means fewer troops and weapons in the future. The US State Department has quietly been pursuing a private security force in what seems to be an attempt to offset the reductions at the Department of Defense.

If the State Department does pursue private contractors (mercenaries), then we can see further deterioration of relations with the Middle East. Unlike the DoD, the State Department does not fall under the War Powers act. Private forces could be use and would be subject to any of the restrictions imposed on our military.

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