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All this talk about the fiscal cliff could make you forget there -- other hot spots in the world so we're gonna turn our attention in the Middle East and some potentially troubling news from Iran officials there report a successful test.
On the surface to air missile during military drills taking place near the Strait of Hormuz the strait which the Iranians have threatened to close is a crucial -- -- For 20% of the world's oil.
So what could this mean here in the United States.
-- me now.
Resident scholar at the American enterprise institute and a happy new year to use -- What does this mean for the United States as it up he had -- this -- more bravado from the Iranians.
Well certainly -- we need to take here -- AM bravado seriously.
There are Saber rattling and sometimes when it comes these military -- there's an element of being photo -- warriors attached.
But there's no doubt that the trajectory of that -- -- and arms industry.
Is becoming more lethal and indeed.
They're having -- they're getting a lot of help not only from countries like North Korea but also from countries like -- and perhaps even Russia.
Do we know for a fact that this test really took place and it was successful are they just plan outline.
Are we don't know that yet because in the past sometimes the -- have been exaggerated but remember the Iran is can learn just as much from a belt test.
As they can from a successful test but what we do know is this the Iranians have been.
I'm expanding beyond the Strait of Hormuz they've established naval base is on the Indian Ocean sea of Oman.
Are they have sent ships up through the Suez Canal.
And they've been talking about establishing a base -- at Sudan in the Red Sea area so certainly the Iranians do seem to be.
Expanding their military.
They're -- and sometimes and please correct me when I get this stronger than almost like a child who wants attention and start screaming and yelling louder and louder.
They've been screaming yelling for the last two weeks and it does -- -- paying much attention.
Why would they be Saber rattling right now are they on the midst of wanting to make a deal to avoid what could be an Israeli attack.
Or perhaps -- worse.
They implement implementation of the sanctions against their economy.
You know the Iranians are not on the verge of making a deal when you actually look at their statements.
They're trample it -- triumphal lest they think that they -- the stronger -- hand of cards what I do think the Iranians.
Are trying to do however is increase the price of oil because even if they Soledad -- discount.
If the price of oil goes -- then they get more money to subsidize their economy and their economy isn't a very structured economy that's the.
Upon their economies in a shambles is it not isn't that part of why -- -- essentially what we would say in the vernacular go ballistic.
I mean they're trying to get the world's attention because Ahmadinejad the the administration are they not.
Teetering in -- they item of their protests in the streets because we don't see that coverage right now but that economy -- in a shambles.
The economy is in a shambles but remember that's two things.
First of all the revolutionary guard more or less dominates the economy they -- didn't dominate the military.
And they also dominate Iran's own oil investments -- up within the -- came to power in 2005.
They have had 35 to forty billion dollars worth of contracts.
Go to the revolutionary guard for the oil industry.
And that compares to an average IR TC budget of only five billion dollars a year so you have -- going on.
On top of which they kind of figure that.
They can push a little bit further because every time they push the west gives them -- sent -- to calm them down it's a pattern which they openly talk about.
In their press now the only time that you running as -- actually really back down with ending the Iran Iraq war in 1988.
Ayatollah Khomeini the times got I don't wrap it up.
I got -- gets out the poison we're not there yet.
And we're not there yet done gonna give you the last word and I appreciate your giving us some insight into the situation around we've been looking at this.
Every day since last week and it does not look good sir thank you very much and again have a happy new year.
But we're gonna take a look at.
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