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Neocons whimper: "Why We Just Surrendered to Iran"

[This is from a free newsletter, so I am publishing it in its entirety}

by Andrew Snyder, Editorial Director, Inside Investing Daily
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Dear Reader,

Retreat! That's the latest battle cry from the Obama camp when it comes to Iran and its nefarious ways.

Really, that's been this administration's modus operandi from the start. From Iraq to Afghanistan... to healthcare reform and its long list of exemptions... to the horror contained in this week's JOBS Act.

But the worst has got to be the diplomatic frailty our leadership displayed as it rolled back sanctions against Iran this week. The goal was to cripple the country's nuclear ambitions. But thanks to our government's sissy stance, Iranian sanctions are yet another example how a half-assed attempt to control the Middle East has added fuel to an inferno that's ready to flash.

Here's what just happened...

Washington gave Japan and 10 other nations exemptions from sanctions against Iran. Our leaders determined since these countries have reduced their oil imports from Iran, that's good enough. There's no need to create any real pain -- especially in the voting booth.

Without the exemption, these 11 countries could have been locked out of the U.S. banking system if they did not follow the "strict" rules put in place by Washington. But thanks to this week's round of waivers, they have a six-month reprieve.

The reason for the waivers is simple... votes.

Without Iranian oil, the countries in focus this week would be in a tight spot. They can't import enough oil from Iran's competitors -- at least without sending global crude prices soaring.

With the recent surge in gasoline prices already gnawing away at Obama's poll numbers, a self-imposed spike in crude would be an invitation for a GOP win in November. It'd be political suicide.

Our president has spent the past week peddling across the country trying to convince us he's done all he can to keep prices low, which makes it no surprise he picked this week to retreat from a tough stance on Iran.

The long-term effects of the move, however, are far from good. It proves Iran has the leverage in this fight. The world needs Iran's oil if it wants to maintain the current economic clip.

In fact, the global media is already claiming victory for Iran. And so are plenty of Americans.

"If the U.S. isn't prepared to be really tough, how can we expect anyone else to be?" said John Bolton, the former U.S. ambassador to the United Nations. "This is one reason among many why obsessing about sanctions as a remedy is ultimately illusory, misguided and self-defeating."

The truth is, even Washington can't afford to cut its ties to Iran. We're still shipping loads of wheat to the country and on Tuesday, the Treasury Department announced we are now allowed to export certain software to Iran.

The question we need to answer now is how will the markets interpret this week's news. I know the answer... it's not pretty.

Oil prices rose yesterday following word of the long list of countries exempt from sanctions. If traders thought this was the end of the story, prices would have fallen. After all, the markets are returning to normal, right?

But that's not the case at all. Things are far from normal.

In fact, as prices rise, it's more proof that the ultimate answer to Iran's nuclear ambitions is war.

The instant an American bullet zings through Iran... prices will explode and the global economy will pay the consequence.

This week's news is proof that Iran has the upper hand. We cannot thrive without its oil.

That means our political leaders have a very tough decision to make... pull the plug on economic recovery or stand back and watch as Iran goes nuclear.

Either way... there's trouble ahead. Obama is doing everything he can to ensure it comes after Nov. 6.

From the Inside,

Andy



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