Someday they'll give a war...

Someday they'll give a war and nobody will come. Carl Sandburg

Wars used to be good for Gold, by which I mean, the price of Gold expressed in terms of national currencies rose during war time. Inflationary finance, which used to be offensive to political sensibilities, was allowable during war time, as were other, usually undesired activities, to wit, Lincoln's suspension of habeus corpus during the War between the States.

Lately though, as inflationary finance has become acceptable at all times, it is in the aftermath of War that the financial effects manifest. I wonder, in the event war with Iran is avoided, if the price of Gold will rise. That is, opposite to the old behavior, perhaps the lack of war might be good for Gold.

I'm not much of a believer in the single cause explanation for war. There might be one or two hoped for effects many of those in power agree upon but there will also be diversity of opinion on other hoped for effects. Control of oil is most likely one of the hoped for by many effects of military expansion in the Middle East but there are, I imagine, other reasons.

I would bet that some of those in power welcomed the war, in part, because it would allow them to change the way the state dealt with the people, with other states, and with other elements within the state.

The need to put the US financial house in order, which was part of President Bush's election platform in 2000, wasn't considered necessary once the War on Terror began. Just as a resolution to the problems of the original Bretton Woods system was put off for years by the Vietnam War, so too, it seems, has a resolution to the (much more significant) problems of Bretton Woods II been put off by the War on Terror.

Imagine if the War on Terror started winding down. Imagine if Iran managed to avoid a clash with the Security Council. Imagine if US military involvement in Iraq was reduced. Imagine if the commercial corporations of the world, as opposed to the governmental corporations of the world, began to complain they could not finance an expanded war.

This would, admittedly, be a novel choice given the history of the 20th century. However, the rush to war sometimes follows the same form as financial bubbles. It begins as an idea that captivates a growing number of other minds for a while only to burn itself out.

Given that the US cannot self-finance the current wars, much less a new one, the financial bubble analogy might be more apt than would seem given recent history. The guys paying the bills either live in the Middle East (the War zone) or need their oil (China, Japan) Perhaps the Dubai Ports deal is a sign the need for Middle Eastern finance is beginning to trump the wish to democratize the region.

If the current nuclear stand off with Iran is handled diplomatically perhaps the financial resolution to the current problems will come sooner rather than later. Perhaps years from now Sandburg's quote will be recast, someday they'll give a war and nobody will pay.