This (Could) Mean War

It All Depends on Israel [The Daily Reckoning] April 15, 2024 [WEBSITE]( | [UNSUBSCRIBE]( This (Could) Mean War Portsmouth, New Hampshire [Jim Rickards] JIM RICKARDS Dear Reader, As you know by now, this weekend Iran attacked Israel with a combination of drones, cruise missiles and ballistic missiles. While we don’t have the exact number, reports indicate that the attack included about 300 drones and missiles in all. The attack was primarily focused on military and intelligence installations, not major population centers like Tel Aviv. It apparently caused little damage, as Israel (with possible help from the U.S. and U.K.) shot down most of the Iranian strike package. A young girl was seriously injured in the attack, but overall, there were very few casualties. It’s not surprising that the great majority of drones would be shot down, given their low speed and the hours of warning time Israel had to prepare their defenses. But some Iranian ballistic missiles apparently got through Israeli defenses and damaged two Israeli air force bases. There are unconfirmed reports that these missiles had hypersonic delivery vehicles that separate from the main missiles in their terminal phase, which struck the bases. That requires a high level of technical sophistication that Iran likely doesn’t have. If the reports are true, it means that Iran acquired that advanced capability from Russia and/or China, which do possess hypersonic missile capability. Incidentally, the Iranian attack cost Israel over $1 billion due to all the air defense interceptors it had to employ to defeat the attack. Those will have to be replaced, in part with Western systems. Sorry Ukraine, I know you’re begging for more Patriots, but Israel has priority. How It All Started This weekend’s attack came in retaliation for Israel’s recent strike against the Iranian consulate in Damascus, which killed two senior Iranian military officials, among others (incidentally, it also damaged the nearby Canadian embassy). Under international law, diplomatic facilities are essentially considered sovereign territory. So in one sense, the Israeli attack was a direct attack on Iranian soil. That’s largely why Tehran determined that it had to retaliate. It believed Israel crossed a red line when it attacked their consulate in Damascus. But despite the relatively large scale of Iran’s retaliatory strike, it was in many respects measured. It was almost like Tehran wanted to avoid inflicting heavy damage on Israel because of the Israeli response it would provoke. [“Black Pattern” Forecasting Major Market Crash]( The world’s most accurate crash indicator is flashing its most critical warning in decades. I call it "The Black Pattern." [And it is the only one that is 100% accurate at predicting a market crash.]( Ever since the 1950s… Whenever this Black Pattern has appeared, stocks have crashed – sometimes by 50% or more. And now… It’s telling us that 2024 could be the worst year you and I have ever seen for the stock market. [Click Here For Full Details]( Tehran needed to retaliate in order to save face and to show its people that it was standing up against Israel, but it didn’t want to retaliate too much because of what Israel might do. It was trying to thread the needle. Hossein Salami, commander of Iran’s Revolutionary Guard, said Iran’s retaliation “could have been much larger but we restricted it to only target facilities the regime had used to attack the consulate.” Meanwhile, Iran’s foreign minister said Tehran told Washington that its “operation will be limited with the goal of legitimate defense and the punishment of Israel.” Iran’s former ambassador to Lebanon said, “This was an act of punishment that’s now over. If they [Israel] commit another mistake, Iran will respond on a much larger scale. But we believe neither the Americans nor the other parties have any interest in broadening the conflict.” In other words, Tehran is telling Israel we’re even. You hit us, we hit you back, we consider the entire incident closed — unless of course you decide to retaliate with renewed attacks against us. Then all bets are off. Pssst… Get Ready, We’re Going to Attack You To further highlight the limited nature of the Iranian strike, Tehran gave regional allies three days notice of its plans. And if Israel picked up that intelligence? Oh well! It’s also telling that Tehran didn’t involve its proxy Hezbollah operating in Lebanon. Hezbollah has a large number of rockets that it could have launched into Israel, but it doesn’t appear that Hezbollah was involved in the attack. If Tehran really intended to damage Israel, it would have coordinated its attack with Hezbollah. That would have overwhelmed Israeli air defenses. H.A. Hellyer is a Middle East expert and senior fellow at the Royal United Services Institute. As he explains it, “Iran’s retaliation was choreographed and telegraphed. [There was] almost zero chance it was going to inflict damage on Israel with that level of warning. The point was to make a scene, and it did that.” The key question is what happens next? Will Israel retaliate or not? Biden: “Take the Win” The Iranian attack was the first on Israeli soil by a foreign state since the 1991 Gulf War, when Saddam Hussein launched Scud missiles against Israel. To many in Israel, that’s a red line. And in fact, Israel is saying it will retaliate. Israeli Defense Minister Yoav Gallant told U.S. Defense Secretary Lloyd Austin that Israel has no choice but to respond. And the chief of staff of the Israel Defense Forces said that "the launch of so many missiles and drones to Israeli territory will be answered with a retaliation." The question is what kind of retaliation? Might it involve a direct attack on Iran itself, or maybe something more covert? Remember Stuxnet? [Urgent: Claim Your Copy Of This New Book From America’s #1 Retirement Expert!]( [click here for more...]( Forget everything you’ve ever been told about retirement. According to [this new book]( – written by America’s #1 retirement expert – you don’t have to wait until you’re 65+… and you don’t need millions of dollars. [The strategy you’ll find outlined inside this book]( is completely different… All you have to do is tap into the little-known income streams revealed inside this book… And you’ll learn exactly how you can generate almost effortless income every month… instantly, in some cases! And today, for a limited only, you have the chance to claim a copy of this book for just $1. [Click Here To Claim Your Special Book Offer]( Stuxnet was a computer virus developed by U.S. and Israeli intelligence that targeted Iran’s nuclear program. It infected over 200,000 computers and caused 1,000 machines to malfunction. Maybe Israel will try to launch cyberattacks on key Iranian infrastructure. We’ll see. But the possibility of direct retaliation for this weekend’s strike is high. The Biden administration doesn’t want Israel to retaliate because it doesn’t want to get caught up in an escalating Middle East war while it’s dealing with the war in Ukraine, Houthi attacks on shipping in the Red Sea and a potential conflict with China. Biden told Israeli Prime Minister Benjamin Netanyahu, "You got a win. Take the win," referring to Israel’s success in defeating the Iranian attack. But can Biden prevent Israeli retaliation? Maybe not. The Ball’s in Israel’s Court Let’s revisit the Israeli attack on the Iranian consulate in Damascus two weeks prior that prompted this weekend’s attack. Attacking the consulate was a major event with potentially significant ramifications. Normally, you’d expect that Israel would notify the U.S. in advance, given the tight relationship between the U.S. and Israel. But it didn’t. That’s a strong indication that Netanyahu, who doesn’t like Biden, is determined to pursue what he believes to be Israel’s interests, especially after the Oct. 7 terror attacks by Hamas. In other words, Biden has limited leverage over Netanyahu. It’s therefore highly plausible that Biden will have limited ability to prevent Israel from direct retaliation against Iran. And if Israel does retaliate directly, Iran will have to respond in kind. This time, Iran’s response won’t be nearly as measured. From there, you’re looking at the real potential of a wider regional war that would most likely involve the U.S. I’ve been warning about this for a long time. The economic impact would be devastating. If a wider regional war breaks out, Iran may close the Straits of Hormuz, one of the world’s most important maritime chokepoints, through which much of the world’s oil flows. You could expect oil prices to go to $150 per barrel or higher. That would put the U.S. and Western Europe in a recession worse than 2008 and the earlier oil shock of 1974. The ball’s in your court, Israel. What are you going to do? Regards, Jim Rickards for The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) P.S. The stock market was down big today. Why? It has nothing to do with the Fed, some economic report or even this weekend’s Iranian attack against Israel. I believe it’s something much worse. [Click here and I’ll show you.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Jim Rickards] [James G. Rickards]( is the editor of Strategic Intelligence. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. 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