Dee Smith: Will Iran's Missile Strike Redefine Global Dynamics? | Geopolitics

34:19We have John San asking a question that I think is relevant right at this point in what we're talking about, Dee, saying, is a war with Iran more likely if Biden wins or if Donald Trump wins? And could such a war divert attention from Ukraine, potentially fostering peace in Ukraine? There's a domino of events. That's a very interesting question, or a couple of questions. I would say that a war with Iran is somewhat more likely with a Trump administration than with a Biden administration. But I'm not sure it's unlikely with the Biden administration. Iran, depending on whose opinion you want to believe, is a, you know, multiple of weeks to maybe a week or two away from a nuclear weapon.

35:14They just have to assemble it. And it's not an easy thing to do, but in theory, you know, they're nearly there. And this is, of course, what keeps Israel up at night. And so if it's judged that they are about to use that kind of technology, then I think that an American strike becomes much more likely. But it would have to be devastating because the stuff is not just a few nuclear installations now. It's spread out all over the country. So you would have to undermine the operational apparatus of the country to the extent that they couldn't put one together. And that's a very tall order. The question of the relationship between Iran and Ukraine is a really interesting one.

36:17And I've thought about that, too. And Iran is a major supplier of weapons now to Russia, weaponized drones particularly, for use in Ukraine. So if they start having to use those, let's say not an American attack, but an active Israeli-Iranian war, that's going to divert a lot of those weapons. And so it could very well put the Russians on the back foot again, if that were to happen. And so in that case, I don't think you would have peace anytime soon in Ukraine. I think what you would have is Ukrainian gains on the battlefield again. So this is a reason that I wanted to emphasize earlier that Hezbollah was essentially prevented from entering the war when Hamas attacked Israel.

37:25As Iran said, look, if you use your weapons, we can't replace them. So don't use them. And, you know, this is a global issue because the U.S. is running out of material, you know, ammunition and that kind of thing, because we've supplied so much to these other warring parties, particularly Ukraine. And this gets into some very complicated issues. But I think it's an astute question because I think there could very much be an effect. Sadly, I don't think it would lead to peace anywhere. I think it would make things more complex. But, yeah. I mean, aside from that strain of thought, which is quite interesting about weapons going from Iran to Russia to Ukraine and a potential peace there, what do you think Russia took away from the events on Saturday night between Iran and Israel?

38:28I think that they were surprised how well the Israeli defenses worked. You know, Russia is kind of on a back foot in terms of its, in terms of how well its military has performed and how well its weapons perform. And, you know, it's a whole other discussion. But there was a lot of claim, including in Russian think tanks and so forth before the war in Ukraine, that Russia had completely revised its military doctrine from Soviet times, which is the doctrine that if you want to take a hill, you have to go all the way up the chain of command and all the way back down. And then by that time, the ability to take the hill is lost.

39:19And it turned out they hadn't. They've learned more since the Ukrainian action started. And it also was claimed that they'd spent all this money weaponizing, modernizing their weapons and so forth. And of course, all that, as it turns out, ended up in the bank accounts of corrupt Russian generals. So, you know, the Russians been backfooted on a lot of this stuff. And I think they were surprised at how well, I think everybody was surprised at how effective that Israeli ability to shield themselves was. But don't you think, D, that that's in part because Iran signaled? I mean, it didn't come as a surprise.

40:03Iran signaled. They were using missiles that took hours to arrive. I mean, the conventional wisdom is that, yes, Iran wanted to make a show, but exactly that, a show. They weren't looking for something that could cause the type of hurt that would really get them into some type of protracted non-shadow war with Israel. It sounds like you're not saying that or not buying that. I'm well, first of all, I don't think the reason that so I'm half by. Okay. First of all, the reason that the Iranian, I'm sorry, the Israeli defense worked is not because they had, you know, a telegraphed, you know, message that this was coming.

40:50And, of course, the missile flights are very quick. They're not hours. They're minutes. It's not that far. but they've been on high alert at that strategic level ever since October 7th and in fact even before it. What the Israelis missed was the tactical level of, you know, it was a failure of imagination. They just didn't think that Hamas was going to do it. There actually was information that reached medium-high levels in the Israeli intelligence apparatus that this was happening. You're talking about that senior intelligence analyst, a woman who was flagging over and over again, despite being told to back off that this was, I mean, she showed the blueprint, essentially.

41:38Yeah, that's right. She wasn't the only one. And so, you know, and that's what we call failure of imagination in the intelligence world. But I think that Israel has, you know, on the strategic level, they pay much more attention or have paid much more attention to that. And so I think that if that came out of the blue, it's very likely you would have had a similar outcome. In terms of, you know, Iran wanting to make a show, I think that is more credible. That, you know, there are things they could have done that they didn't do and that could have been much more damaging. So, you know, that, again, it's a hall of mirrors.

42:26But yes, that's the more credible claim in that they were not trying to, they weren't trying to cause mass destruction. They were trying to, you know, create, do a tit for tat kind of thing. Now, the question now, of course, is what Israel is going to do about that. And it's, again, a hall of mirrors. Netanyahu needs that right wing flank in his war cabinet. And it may well have been that that was the reason that he attacked that compound, which precipitated this specific exchange. and they're now hammering for a very, very aggressive response to the Iranian attack. And we'll see. We'll see how that balances out.

43:22I think Netanyahu's interest is to keep Netanyahu in power. And so whatever he thinks is going to—that's a very cynical remark, but I would make that on most politicians. um but but he's just proved one of the most effective in the world at doing it yeah exactly and by the way you said something interesting about you know the exhaustion of of of the of the american military which is absolutely true but there's another factor in there and that is that you talk to people in the military about these sorts of things both American and other militaries, that the U.S. technology was so far ahead of everyone else 15 or 20 years ago.

44:07And the power of the American military was so great that there was a sense among other people that you just don't want to tangle with them. You'll just lose. So, you know, you could literally send an American aircraft carrier to the environs of a place and it would calm down because nobody wanted to screw around with that. That's no longer true. And it's not true in more than one way. One element of it is that the American military has been exhausted by the adventures in Iraq and Afghanistan and other places. Another element of it is that we have not put the investment into keeping up and other people have.

44:52So there's closer technological parity. And the third one is the rise of effectiveness of asymmetric warfare. And asymmetric warfare is like the Houthis. You can use a drone that costs a couple of thousand dollars at most, and the Americans have to defend it with a missile that costs$2 million or more, and that it's not always effective. That's interesting, because I thought you were going to go a different direction and say China, and you went the exact opposite direction, not another great power, but the smallest of small powers with the smallest of devices. Yeah, aided and abetted, by the way, by Iran.

45:37but the whole asymmetric equation, they call it asymmetric and asynchronous, where asynchronous means it doesn't happen at the same time. Asymmetric means that it's a small group against a big group. And it's always been the case that big groups were vulnerable. I mean, that foundation of the United States, the American Revolution, was an asymmetric use of asymmetric warfare. But it's now much more the case because you have changes in technology, not just in things like drones, but in other kinds of weapons like bioweapons and even nuclear and so forth. To that point, Gabo Hernandez on the platform says, is it true that if we go into World War III, then all assets become bullish in the financial markets?

46:31I heard that today from a financial analyst on another financial outlet. He said everything becomes more expensive because we'll be cooked. What do you think about that perspective? I like the phraseology. Me too.

46:47I think that it's true until it isn't true. I think that what will happen, and this is often what these things do, they go in one direction and they sharply reverse and they can reverse again. But it would be true until there was a major catastrophic attack. And then you would have some things happen. Let's say, you know, that you got into active combat and it was tit for tat and there was, you know, not clear who's winning and, you know, things are going to get more expensive. And, you know, is the is the Kormuz straight block and then oil goes to two hundred dollars a barrel of whatever, all those things.

47:31And then say there is a just there is a nuclear hit on a city, even a tactical one. And suddenly you have a huge amount of human casualty, but also a huge amount of real estate destroyed that creates a sudden hole in the economy of the world. And you also have cancellation of insurance for all air travel, all air commercial transport and that sort of thing. And so you suddenly have a ground shift, you know, an entirely different environment that you enter within minutes. And that, I think, would have the opposite effect. And so it depends on how intense it is and how long it lasts and what happens.

48:20And the problem is, you know, they have this thing called the fog of war. You don't know what's going to happen. And it is often not what either side intended or believed. And so it becomes highly, highly unpredictable. When that unpredictability becomes evident and or something like I just mentioned happen, then you'll see the market reverse. It may go up at first and then at some point, I think, would crater. But that's just my opinion. There's some chatter going on on the Real Vision platform in response to some of what we've been talking about. At one point, Paul English said in response to something we were talking about, D, I think that we have an intel, we being the U.S., I assume, have an intelligence connection with Israel that's important to the U.S.

49:07I would just add there that the United States has a lot of intelligence across the Middle East. Israel even depends on Jordan a lot for intelligence. That's been growing. And then something that I've heard from intelligence analysts in and out of the region is some of the failures in Israel. Look at the failure to detect the Hamas October 7th attack, or maybe better put, as you were pointing out, there was some detection, but to be able to act on that. They were focused on the West Bank when, in hindsight, they clearly should have been focused on Gaza. There's another question, and I think this is interesting in the context of the smaller weapons that you were talking about, the consumer-type drones, D.

49:51Jim Griffin says, is the issue that Iran might have nuclear arms or that they might provide those arms to their proxies? Those are very good questions. And to answer the last one first, the issue is both. People are very concerned about proliferation and about the supplying of weapons, particularly small nuclear weapons and particularly dirty weapons, which don't require, you know, a fission criticality. They don't require the things that a nuclear explosion requires. but it's just basically you pack a bomb with highly radioactive material a regular bomb a good size one but it doesn't have to be enormous and you explode it in a city and several stories up on a building in a building you know would be the the effective way to do it and and that spreads radiation over that city and again it doesn't i mean very few people die immediately, you have very long-term effects, but you have very immediate effects about the value of that property and real estate insurance and all those sorts of things, which can have huge economic effects.

51:11So you've got that kind of thing is a great concern. And all you need is the kind of enriched material that Iran has, and so do many other places, by the way. So that is true, but And it's also of great concern that they could easily have a working fission device, nuclear fission device, and explode it in an attack over an Israeli city or wherever. I mean, their radius of their longest range missile is about 2 ,000 miles, and it goes all the way to India. It goes into Europe. And so, you know, if they're cornered, there's no limit to what they could do in within that range in terms of just a single nuclear device being exploited.

52:09You have to have a lot of stuff that, quote unquote, goes right. The missile has to work. The warhead has to work. They're complicated things and they're hard to get right. But Iran's been working on this for a long time. Don't forget that Israel has a number of working nuclear warheads. And so you could easily get into a true nuclear exchange, regional nuclear war. Where that would lead, nobody knows. Some people might see it as a, some people being perhaps Russia, might see it as a diversion and they can go do what they want in other places. China might see it that way. So it becomes a hyper destabilizing thing.

52:58With regard to World War Three, of course, there's a school of thought that it's already started and it started some time ago and that it's just building slowly the way these things do. but the you know I'm agnostic on that I you can only know that looking back and I think it's possible I don't necessarily think it's you know 50 percent like I've always bought into that argument that maybe you don't realize that you're in World War III until you look back that maybe September 11th was the beginning of this period, leading to Afghanistan, Iraq, ISIS, and where we are today. You mentioned one thing, Dean.

53:44It's really one of the main reasons that we wanted to invite you on Real Vision today to follow up to the conversations that we've had with Jacob and Marco. A lot of people asking about China, which you just alluded to, and Maggie wasn't able to get to a lot of those questions because they were so deep in that discussion yesterday's focusing on the Middle East. But I want to go to a question from John San, because he paints it quite clearly. John says, and where is China in all this scenario? What do you think the Chinese were contemplating as they looked at the events happening between Iran and Israel on Saturday night?

54:19And what do you think the larger thinking is there in the big picture? First of all, I think China was extremely interested in the technology and very curious and impressed to see it work so well. I mean, the defensive technology. Second, I think that China is playing all ends against the middle. And they are looking to manipulate the situation to their advantage in any way they can. And, you know, a friend of mine was admiral of the of the Pacific, U.S. Pacific Fleet up until the mid-teens or so. And and he he would often meet with his in those days, they had better relations. He would meet with his Chinese counterpart, the Chinese admiral.

55:08They got to know each other. And he told me that at one point, as things were getting more difficult, that this Chinese admiral, he asked this Chinese admiral, well, you know, why are you doing this? Why would you put at risk everything that you built, your middle class and everything? And the Chinese admiral's response was, our time has come. And I think that there is so much anger among that generation of Chinese leaders about the so-called 100 years of oppression that they suffered. And some people say 150 years at the hands of the West. And Xi Jinping has made it known publicly, has said it very specifically, that his legacy is the reunification of China and Taiwan.

56:04and they're being very aggressive with every country around them at various times, the Philippines, Vietnam, Japan. They're having a take-no-prisoners attitude. So I think that China is watching very carefully, and I think that, to paraphrase Churchill, China doesn't have permanent friends. It only has permanent interests. and its permanent interest is itself. And now, to invoke what you said a little bit earlier, when I say China, I mean Xi Jinping and the CCP, the Chinese Communist Party, and Xi Jinping's government. When I say Russia, I mean Putin and his government. I don't mean the Russian people or the Chinese people, many of whom are disgusted with what's going on on both sides.

56:57And that's true of every country. So I just not to, I don't want anybody to think that, I think you said it well. I don't want anybody to think I'm condemning all the Chinese, but I'm saying Chinese leadership that's in place and strongly in place has a very uncompromising attitude. And they are looking for opportunistic advantages and they're looking for long-term strategic advantages. So that's how I think they look at this. And I think that they don't mind if other countries get into it because it shows them what works and what doesn't and under what circumstances. And it depletes all the countries who could be against Chinese interests.

57:49I mean, Russia and China right now have this rapprochement, but there have been times when they were almost at blows. And I don't mean in centuries ago. I mean, within the last century. So, you know, these things are very temporary. They're shifting sands, hollow mirrors. I often use that phrase. But it's just it's not possible to know that what's the interest of X country today will be their interest tomorrow. Now, we see that so quickly in the Middle East, how much alliances have shifted in the past few years. Just a final couple of questions. There's been this growing wave, and I think you've touched on it, or a growing stream of thought expressed on the Real Vision platform from multiple contributors.

58:35contributors just talking about to tie it all back together and getting back some of the questions that have been asked about the election. You know, if Trump wins, folks say that Trump changes on a lot. I think we can all agree on that from abortion to many issues. But the one thing that he doesn't change are his views on protectionism. And folks are saying, you know, the one thing that might be guaranteed with a second Trump administration is more protectionism, more tariffs, and that that That would be a significant contributor to inflation. How do you see that playing out? First of all, you know, Biden is almost as protectionist as Trump.

59:15He has really not rolled back much of anything. And he's added protectionist kinds of, you know, things to be tariffs and so forth. And technology, chip making, all those things. So I think it's the zeitgeist. I think it's the spirit of the times. And this goes to that global splintering element that I think is, we've moved from a period that was centripetal and that things were coming together into a period where things are pulling apart. And part of it has to do with the tribalism that you mentioned, but it's evident from the very basic levels of society, families and towns, all the way up to the global, to the international realm.

1:00:00And it's just we've just entered a different spirit of the times. And the spirit of the times is now about splintering and pulling apart fragmentation, whatever word you want to use. So so I think that's going to persist. I think that, you know, the next Trump administration is going to be very different from the from the previous one, because it's going to be more ideologically pure. And he's going to have fewer people in the whole administrative apparatus that have different opinions and so forth. So, yeah, I think it will be more protectionist, but it won't be. I mean, the next Biden administration, if that exists, will also be protectionist.

1:00:51So that's one element of that. I think inflation, and this is a remark that many people would disagree with strongly, but I think inflation is becoming structural. And the reason it is, is that generally speaking, we're running up against the resource constraints of the planet. We're using so much critical minerals, rare earths, all these different energy, water, that those things are gradually getting more expensive. And as all that happens, they reverse and then they go back up. It's this kind of a chart and not that kind of a chart. And as that happens, I think the cumulative effect of it is a structuralized inflation.

1:01:42And it will go up and down. But on the long term, I personally see it going up. And I don't see it being, I think it's what they call a secular trend in economics. And it will be affected by various things that make the interest rate go up and down. But the general trend, because you're dealing with more scarcity, will be that inflation goes up. That's my take. And you really drill down on this quite profoundly in some of the previous series that you've done on Real Vision. which I think often become more relevant, not less relevant with the time that passes. So if you're on the Real Vision platform, just put in Dee Smith in the search bar up top, and you'll see a lot of really compelling discussions on this.

1:02:26Dee, just to close out our conversation here, what's the big thing or the one thing that you think that we're missing, the group think that always happens off the back of many of these events, like what we saw going on between Iran and Israel on Saturday night? or maybe just in the wake of everything that's happened in the Middle East since October 7th. Do you think there's something that many mainstream media outlets or a lot of people are missing in their thinking? Yes. And I'll surprise you by saying something that goes against my reputation as Mr. Doom. But before I do that, I want to say thank you for the compliment about World on the Brink.

1:03:08There was a piece of footage of film, if you want to put it that way. There was a whole section we just didn't have time for. And so it ended up on the proverbial cutting room floor. And guess what it was about? Pandemics. We would have really hit the nail on the head. That's a sobering thought. Yeah. But anyway, I think that the big thing that people are paying attention to is that this has not provoked the Arab world to become virulently anti-Israeli and go wholeheartedly to the side of Hamas. and I think that's a sea change. Saudi Arabia is still talking about normalizing relations with Israel and it didn't crack up the Abraham Accords.

1:04:04And so I think that there's a change in the dynamic in a lot of these countries and I think it has to do partly with younger leaders who are tired of their fathers and grandfathers There's fights in countries where you have younger leaders. But I also think it's just self-interest. I think they don't see the point of it. And that's a big change. Don't you think there could be a disconnect between Arab leaders? And I'm talking specifically about Saudi Arabia and the UAE from their people. We've seen a lot of reporting from some of the best journalists in the world saying that actually the leaders of those countries are petrified of what the Israel-Gaza war could do to radicalize their own people, even if it doesn't change or radicalize their own policies.

1:04:57Saudi Arabia clearly wants to move forward. The UAE wants to move forward, but that their people could become radicalized by this and that there's a big fear of that? Absolutely. That is a real phenomenon. And the thing that I think there's several things, But just to pinpoint on one, those regimes, however progressive we may think they are, are very, very authoritarian and have massive control. It would take a level, and it could happen, but it would take a level of civil unrest that's hard to imagine in a country like Saudi Arabia or any of the others for those leaders to be toppled quickly.

1:05:42And then if they're not toppled quickly, things die down. And I think that, you know, a lot of people and, you know, a lot of Americans are this way. They love to get upset about things. And then when it comes to just day to day life, they don't do much about it. So it's absolutely a phenomenon, no question. But it's also something that's hard to gauge what the real power and effect might be. so yeah and and i would just add to that that in the time that i've spent in saudi arabia and uae perhaps more so than any other place in the world where i've spent time and i haven't spent time in china that the apparatus that they use the technology that they use to surveil their people is incredible far beyond i think what anybody in any western country can imagine western The other thing is that the way those oppressive regimes work, and this is whether it's a Latin America or Europe or wherever it is, is that the leaders surround themselves with a coterie of people.

1:06:55They have what are called the levers of power. And the reason they have them is that they essentially have those people's families hostage. and those people know that if they don't do what the leader wants, their families will bear the brunt. And that's an extremely powerful tool. Horrible, but that's how it works. A reality and a sobering reality at that. Dee, we always appreciate your insights, particularly at these tense times, and we hope to see you back on the platform soon, perhaps under better conditions. So thank you very much for all your insights. Well, I hope there are better conditions, but it's always a pleasure and great talking to you.

1:07:40Hope to see you soon. Hope to see you soon. And thank you to everybody for your participation. We'll be continuing these conversations throughout the week right here on Real Vision. See you soon. We hope you enjoyed this episode. At Real Vision, we arm you with the expert knowledge, time-efficient tools, and a powerful network to help you succeed on your financial journey. Get a taste of financial freedom with our free offer at realvision.com forward slash free.

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