Proving that Iran has very little imagination, and almost no credibility, Iran has once again threatened to shut down the Straits of Hormuz. The UN Security Council is set to enact new economic sanctions on Iran in the wake of the passage of their latest deadlines regarding information on the enrichment and processing of uranium. The Revolutionary Guard (Iran’s so-called elite military establishment) states that they have new technology with the capability of shooting down any ship within a range of 200 miles. United States Officials doubt the claim made by the Iranians and are confident in their ability to keep the Straits of Hormuz open, where 1/5 of the worlds supply of oil is transported through.

So, what is really going on here. Iran has been trying to play games with our stock market now for months. You will notice a pattern whereby every few months as oil prices start to come down, Iran will ratchet up ther saber rattling. In the past this has had an almost immediate impact on the price of crude oil. However, today the effect has been almost nil. In fact, the market is up over 100 points and oil is down about 3 bucks per barrel.

The simple fact of the matter is that Iran’s only tool left is their attempt to instill fear in us by making baseless threats such as this. However, if we look at the facts of the Iranian situation, shutting down the Straits is the last thing they would or could do. Right now Iran is facing record high inflation, they import gasoline into Iran because they have very little refining capacity, they face food shortages and the economy is going down the tubes. If they were to close off their only economic import (e.g. oil through the Straits of Hormuz) it would be akin to committing economic hari kari. In fact, maybe we should hope that the Mullahs do exactly this. Maybe then the Iranian people would finally stand up to them an say no more.