Today, Nokia announced that it’s going to cut 4,000 more jobs at its factories in Hungary, Mexico and Finland in an effort to improve the production efficiency of said plants. The company plans on moving a larger part of the production of its smartphones to Asia, which it says will help reduce the time it takes for its products to reach the market.

As Nokia continues to suffer the effect of the transition of its smartphone portfolio to Windows Phone, the company is looking for ways to cut costs until the huge investments start paying off. The cheaper labor cost in Asia should help the Finns reduce their production costs and, hopefully, go back in the black.

We are not exactly sure that moving your production thousands of kilometers from the actual markets will really improve the speed, but maybe Nokia is now more focused on reaching the rapidly expanding Chinese market instead of Europe and America.

Still, the company desperately needs to buy some time, until Windows Phone gets competitive enough to allow it to price its smartphones as high as Android and iOS top-dogs and, obviously the guys over at Espoo decided that this is what it takes.

Personnel reductions are planned to be phased through the end of 2012, so we will only see if Nokia made the right decision come the first 2013 financial result.

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Iran is ready to complete and inaugurate the proposed Iran-Pakistan gas pipeline project ahead of the due date, the vice president for international affairs said in Islamabad today.

In a meeting with Pakistani finance officials, Ali Saeedlou said that Iran is prepared to help Pakistan establish the pipeline ahead of the date the two sides have agreed upon, IRNA news agency reported.

Despite the threat of sanctions from the United States, Pakistan refused to abandon the multibillion-dollar Iran gas pipeline project, saying the project between the neighboring states was beyond the scope of U.S. sanctions imposed against Tehran.

“Pakistan is committed to the Pak-Iran gas pipeline and sanctions do not cover this project. There is no change in our stance and we are working to complete the project by 2014. We believe that this project is beyond the scope of the relevant UN resolutions which we are obliged to comply with like all other member states,” said Pakistani Foreign Office Spokesman Abdul Basit on January 27.

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President of the Somali Red Crescent Society has expressed gratitude to Iran for Tehran’s significant contribution of humanitarian aid to the famine-stricken African nation, Press TV reports.

“[We are here] to express our appreciation and thanks to the Iranian Red Crescent for the assistance they have provided for the Somali people,” Ahmad Mohammad Hassan told Press TV after a meeting with the president of the Iranian Red Crescent Society in Tehran.

Hassan added that, “They (Iranian Red Crescent) played a major role in controlling hunger and famine. They were among the first ones to come to Somalia to provide this humanitarian assistance such as food, shelter and medical assistance.”

The UN declared famine in Somalia last July owing to the worst drought in decades. Hundreds of thousands of people fled to the refugee camps in Kenya, Ethiopia and the Somali capital Mogadishu in search of food.

The Iranian Red Crescent Society is now planning to start a new phase of activities in Somalia.

“I think healthcare is the most needed thing there at the moment. It is also important for us to enable people to help themselves and to help create jobs for them. This is one of the general policies of the Islamic Republic,” Abdolhassan Faqih President of the Iranian Red Crescent Society told Press TV.

Iran’s Red Crescent Society currently has a permanent medical center and five makeshift clinics in the Somali capital, Mogadishu, where Iranian physicians provide treatment for the people.

East African countries, including Somalia, Kenya, Ethiopia and Djibouti, have experienced a crippling drought over the last year, but the crisis turned into famine only in Somalia, where aid groups have reduced access due to persisting violence between government forces and al-Shabab forces.

Somalia has been without a functioning government since 1991, when warlords overthrew former Dictator Mohamed Siad Barre.

The Iranian Red Crescent Society has expressed hope that the upcoming elections in Somalia would lead to the establishment of a government, which can provide enough security and make the job easier for all aid organizations in the African country.

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Gendarme forces move toward protesters in Piata Universitatii square, Bucharest January 19, 2012.

Romania’s Prime Minster Emil Boc has resigned following weeks of public protest against IMF-backed austerity measures amid the debt crisis sweeping the European Union.

Announcing his resignation on Television on Monday, Boc said that he wanted to “defuse political and social tension” and to protect the stability of the country.

“We made this decision in order to alleviate the social and political situation in the country, but to not lose what Romanians have won with so much suffering, the country’s economic stability,” Boc said.

The resignation comes after three weeks of public demonstrations demanding the resignation of President Traian Basescu and the Boc government for imposing harsh austerity measures including a 25 percent cut in public sector wages, 24 percent increase in sales tax and a freeze on pensions.

Romania needed to implement the measures to qualify for the next installment of a 20bn euro bailout loan from the International Monetary Fund (IMF).

Boc’s resignation makes Romania the sixth European country to see a prime minister fall to the debt crisis.

Basescu has nominated former Justice Minister Catalin Predoiu as interim Prime Minister on Monday.

The European debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, triggering incidents of social unrest and massive protests in many European countries.

There are fears that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.

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Indian business delegation will visit Tehran in the end of February to boost oil imports from the Islamic Republic.

India plans to send a business delegation to Iran to hold talks aimed at increasing the volume of Tehran’s oil exports to New Delhi, a report says.

“We will need to lead a business delegation there, taking potential exporters across a range of sectors, and go out there and talk to their counterparts,” Reuters reported an anonymous Indian official as saying on Thursday.

According to the official, India could set up exports in a range of goods in return for wheat, industrial goods and jewelry.

“Traditional exports on the food category, which have always gone to Iran, have been orthodox tea and basmati rice. So those will continue.”

The Indian official added that the delegation would visit Tehran at the end of February.

India, the world’s fourth-largest petroleum consumer, is Iran’s second largest oil customer after China and purchases around $12 billion worth of Iranian crude every year, about 12 percent of its consumption.

After imposing sanctions against Iran’s oil and Central Bank on December 31, 2011, Washington has been trying to persuade emerging economies in Asia — Iran’s biggest oil market — to cut imports of petroleum from the country.

US sanctions require foreign financial firms to make a choice between doing business with Iran’s Central Bank and oil sector or with the US financial sector.

Earlier this week, however, Indian Finance Minister Pranab Mukherjee refuted US call for putting a ban on Iran oil, saying India would continue to buy Tehran’s oil despite sanctions.

“It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them.”

Source

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Russia has lost $4 billion due to the loss of arms contracts with Libya as a result of the UN’s arms shipments embargo. Anatoly Isaikin, the General Director of Russia’s defense export giant Rosoboronexport, said that Russia had concluded arms contracts worth $2 billion with the previous administration of Libya. “We could conclude more contracts for the same amount,” the official told Interfax.

According to Isaikin, Russia stopped executing all defense contracts with Libya following the UN embargo. Moscow plans to conduct negotiations on the subject with the new Libyan administration as soon as the embargo is lifted. The negotiations will solve the fate of the previously concluded contracts, as well as other contracts, that were prepared for signing. “We do not build illusions about it,” the official said.

In the meantime, foreign media say that Russia’s similar arms contracts with Syria may end up the same. This is exactly the reason why Moscow is unwilling to approve the resolution of the Arab League in New York, Germany’s Suddeutsche Zeitung wrote.

Russia has recently vetoed the draft resolution of the UN Security Council, which urged to end arms shipments to Damascus. Western journalists concluded that Russia had a number of highly lucrative deals with Bashar Assad’s regime. The export of defense products and the energy business are the key branches of the Russian industry, the German newspaper said. In addition, Russia’s army base in the Syrian port of Tartus is the country’s only base in the Mediterranean Sea.

The strategy of trusting the old ties did not justify itself in Libya. Some experts say that Moscow’s tough position on Syria may cause serious damage to the Russian Federation, the publication also said.

In September 2011, a number of Western publications calculated Russia’s possible losses in Libya. In addition to $4 billion, which Russia lost as a result of the above-mentioned sanctions, Gaddafi’s government ordered anti-vessel complexes in the amount of 600 million euros.

It was also said that Russia’s several arms contracts with Syria totaling $2.5 billion were not likely to happen.

As long as the sanctions against Syria have not been approved yet, Russia will continue shipping military hardware to Damascus. Russia’s Foreign Minister Sergei Lavrov stated that the Chariot vessel had delivered several tons of ammunition to Syria.

The contracts were signed and they must be executed, the minister said. Lavrov added that Assad was not Russia’s friend. He also said that he was certain that Russian arms were not used against the demonstrators who want the Syrian president to step down.

Source

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A senior lawmaker says Iran’s Majlis is considering a plan to cut off the country’s economic transactions with South Korea’s Samsung in reaction to the company’s anti-Iran teaser.

Head of Majlis Energy Committee Arsalan Fat’hipour said the double-urgency plan, aimed at imposing a complete ban on buying all Samsung products, would make the company regret making the insulting teaser.

South Korea’s giant manufacturer of electronic devices and home appliances produced a teaser shortly after the assassination of the Iranian scientist Mostafa Ahmadi Roshan by Mossad agents in Tehran, in which Iran had been depicted as a primitive society.

The clip also implies that Israel is powerful enough to easily destroy Iran’s nuclear facilities or assassinate the country’s nuclear scientists.

The Iranian lawmaker added that forgetting the high volume of its trade with Iran, the company has produced the teaser to curry favor with Israel.

Fat’hipour said Samsung’s apology to the Iranian nation, though necessary, would not be enough and that the company must be held accountable for producing the teaser.

Meanwhile, Samsung’s Dubai office has issued a statement condemning the production of the teaser by the company’s Israel office.

Samsung’s public relations official in Tehran, Elaheh Taheri, told reporters on Thursday the clip had nothing to do with the South Korean company and that it had been produced by an Israeli cable TV station, Hot.

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A grim report just issued by the Finance Ministry that is circulating in the Kremlin today says the United States Clearing House Interbank Payments System (CHIPS) has ground to a virtual halt signaling that a major global economic collapse is currently underway and could very well likely enter into the dreaded “freefall zone.”

Virtually unknown to all but the global financial elite, CHIPS is the main privately held clearing house for large-value transactions in the United States, settling well over $1 trillion a day in around 250,000 interbank payments that together with the Fedwire Funds Service, which is operated by the Federal Reserve Banks, forms the primary US network for large-value domestic and international US dollar payments where it has a market share of around 96%.

The cause underlying the collapse of CHIPS, this report says, is due to the “unprecedented” demand for immediate liquidity relief being sought by the largest banks in the US and EU that are being crushed under of the combined debt of both the United States and Europe said to total near $39 trillion.

Important to note is that what is currently happening is a virtual repeat of the 2008 Financial Crisis that the United States Senate’s Levin–Coburn Report found “was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

Grimly echoing this Ministry report is the latest data [see chart 2nd photo, or click on link] from The Baltic Dry Index (BDI) that is a number issued daily by the London-based Baltic Exchange and shows it in freefall dropping 65% in the past 30 days alone, a terrifying amount of loss not seen since the dark days of late 2008.

Not restricted to Baltic Sea countries, the BDI tracks worldwide international shipping prices of various dry bulk cargoes that has collapsed so severely global shipping has all but ceased thus leaving our world’s largest transport ships anchored and empty off the coast of Singapore [photo 3rd right] in what is described as “the biggest and most secretive gathering of ships in maritime history whose numbers are equivalent to the entire British and American navies combined.”

During the 2008 Financial Crisis an outright global economic catastrophe was only averted after the US Federal Reserve secretly gave out to US banks and corporations, and foreign banks everywhere from France to Scotland, over $16 trillion that was only discovered due to an amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act passed by the American Congress that called for their being audited for the first time in their 99-year history.

Note: To place that $16 trillion into perspective, remember that the Gross Domestic Product (GDP) of the United States is only $14.12 trillion, and the entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion.

Curiously, the aforementioned amendment to the Dodd-Frank law only called only for a one-time audit of any emergency lending facility established by the Federal Reserve since 1 December 2007 and ending with the date of enactment of the law when it was signed by President Obama on 21 July 2010 thus keeping hidden from the American people who is getting their money.

To if anyone in the world, even the powerful US Federal Reserve, has the power to avert this coming catastrophe, this Ministry report warns, it is unlikely due to the cascading collapse of the global derivative market due to the mounting gridlock in liquidity that US billionaire and Obama confidant Warren Buffet warned back in 2003 were “financial weapons of mass destruction.”

Though the word “derivatives” sounds complicated and technical, understanding them is really not that hard. A derivative is essentially a fancy way of saying that a bet has been made. Originally, these bets were designed to hedge risk, but today the derivatives market has mushroomed into a mountain of speculation unlike anything the world has ever seen before. Estimates of the notional value of the worldwide derivatives market go from $600 trillion all the way up to $1.4 quadrillion.

$1.4 Quadrillion is roughly: -40 TIMES THE WORLD’S STOCK MARKET. -10 TIMES the value of EVERY STOCK & EVERY BOND ON THE PLANET. -23 TIMES WORLD GDP.

Failing to be noticed by the Western peoples about this global economic collapse is that it has been, in all probability, a “planned event” due to occur so as to initiate a New World Order that has long been sought after by the elites, but was condemned by the ancients who warned that the uniting of our world as an economic dictatorship would lead to every human being having to obtain the Mark of The Beast thus bringing this present age to its end.

In a Western world devoid of morality, and lacking the knowledge of the ancients, it is beyond doubt that this coming economic collapse will take them by complete surprise (as the last one did) as they have been trained like dutiful slaves to only adhere to those voices leading them to their doom.

But for those who know the truth, the time is nearing an end for preparing…it will come much sooner than anyone will believe.

Source

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German Chancellor Angela Merkel

Despite Beijing’s outright refusal to join the EU and US-sponsored unilateral sanctions on Iran’s oil industry, German Chancellor Angela Merkel has arranged a visit to China to convince the country to reduce Iranian oil import.

A German government source told a news briefing on Tuesday that “It is in German interests that China does not raise its imports [from Iran]. It would be good if China would reduce its imports.”

According to the source, Merkel will begin her trip to China on Wednesday.

This comes while China has criticized the European Union’s new unilateral sanctions against the Islamic Republic, considering them as blind pressure and unconstructive.

“To blindly pressure and impose sanctions on Iran are not constructive approaches,” the Chinese foreign ministry said on January 26 in reaction to the measures adopted by the EU over Iran’s nuclear program.

US President Barack Obama signed into law new sanctions against Iran which seek to penalize other countries for importing Iran’s oil or doing transactions with the country’s central bank. The European Union also approved new sanctions against Iran’s oil and financial sectors on January 23, which will cut off crude oil imports from Iran on July 1.

The United States, Israel and their European allies accuse Tehran of pursuing military objectives in its nuclear program and have used this pretext to impose four rounds of international and a series of unilateral sanctions against the Islamic Republic.

Iran has refuted the allegations, arguing that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, Tehran is entitled to use nuclear technology for peaceful use.

Source

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French President Nicolas Sarkozy has ridiculed Britain once again by saying that “the United Kingdom has no industry any more”, media reports said.

The recent spat was made during a prime time national TV broadcast, in which Sarkozy was trying to defend his decision to introduce an increase in the Value Added Tax (VAT) in an attempt to boost France’s failing economy.

By enforcing the 1.6 percent VAT rise, ordinary people will have to pay for social charges too.

The French President, who has admitted for the first time that he may lose upcoming elections in the Spring, also admitted that he was borrowing the measure from Germany, arguing that it had ‘helped to boost German competitiveness’ and had not led to a rise in prices.

But, when a journalist noted that Britain had experienced a rise in prices after increasing its VAT contributions, Sarkozy spat out the words: ‘The United Kingdom has no industry any more’.

His comments came as earlier in 2009, Sarkozy actually attacked a VAT rise in Britain, saying it had ‘absolutely failed’ to stimulate the economy.

Earlier in December, tensions between Britain and France over the future of the EU intensified after Sarkozy accused Prime Minister David Cameron of behaving like “an obstinate kid” when he wielded the British veto at the European summit.

Adding salt to Sarkozy’s injuries, fresh polls suggest that he will be defeated if, as expected, he stands for re-election in the upcoming elections in the Spring this year.

Britain and France had been suffering from an age-old mix of distrust, affection, and antipathy, which was never going to be overcome so easily.

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European Union leaders are expected in Brussels for their first summit of the year in attempt to reconcile austerity with growth and to approve a permanent rescue fund for the crisis-hit eurozone.

The half day summit on Monday is meant to focus on ways to generate growth and create jobs, while having more austere fiscal measures for nations with unsustainable levels of debt.

The summit coincided with a general strike against the Belgian government’s austerity measures that has kicked off in Brussels, bringing the city to a standstill.

EU leaders are also expected to put the finishing touches on a German-driven pact for stricter budget discipline and endorse the statutes of a 500 billion-euro rescue fund to be set up this year.

Most eurozone member states -, except the UK – have agreed to sign up to the new budget treaty, or “fiscal compact”.

Meanwhile, Greece’s unresolved debt restructuring negotiations with its private creditors may sour efforts to send a more optimistic message that Europe is getting on top of its debt crisis.

Currently there are more than 23 million unemployed people in European Union and there are fears that harsh austerity measures may harm enterprise and training.

Europe is battling a debt crisis that so far has prompted two international credit rating agencies to cut the ratings of at least five of its members including Italy, Spain and the EU’s second largest economy, France, which lost its triple-A credit rating.

There are fears that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.

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Shah Deniz gas field

BP Plc, UK, and EU have reportedly convinced US lawmakers to exempt a BP-led project from the newly- proposed Washington sanctions on Iran.

This is a clear indication that the West is pushing for stricter embargoes on Tehran without harming its own economy.

US senators have discussed provisions that could bar companies like BP from working with the National Iranian Oil Company (NIOC), Reuters quoted one congressional aide as saying on Monday.

The project, known as Shah Deniz, is a USD20 billion enterprise in the Caspian Sea off Azerbaijan, in which the Iranian state-owned oil company Naftiran Intertrade Co., an NIOC subsidiary, holds a 10% stake.

On New Year’s Eve, US President Barack Obama signed into law fresh unilateral economic sanctions against Iran’s Central Bank in an apparent bid to punish foreign companies and banks that do business with the Iranian financial institution. The bill ultimately takes aim at Iran’s oil revenue.

The United States, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear program and have used this pretext to impose four rounds of sanctions and a series of unilateral sanctions against the Islamic Republic.

Iran has refuted the allegations, arguing that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, Tehran has a right to use nuclear technology for peaceful use.

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New Western sanctions seek to prevent other countries from importing Iran's crude oil.

India has agreed to pay the price of crude oil it imports from Iran in gold, which makes it the first country to drop the US dollar for purchasing the Iranian oil.

According to a report published by DEBKAfile news website, unnamed sources have stressed that China is also expected to follow suit.

India and China take about one million barrels per day (bpd), or 40 percent of Iran’s total exports of 2.5 million bpd and both of them have huge reserves of gold.

The report added that by trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its Central Bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose on Monday, January 23.

The EU currently buys around 20 percent of Iran’s oil exports.

On the other hand, experts say the vast sums involved in these transactions are expected to boost the price of gold and depress the value of the dollar on world markets.

“An Indian delegation visited Tehran last week to discuss payment options in view of the new sanctions. The two sides were reported to have agreed that payment for the oil purchased would be partly in yen and partly in rupees. The switch to gold was kept [in the] dark,” the report stated.

India is Iran’s second largest customer after China, and purchases around USD 12-billion-a-year worth of Iranian crude, or about 12 percent of its consumption.

Delhi is to execute its transactions, the report said, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of the Indian government, the Reserve Bank of India representatives, and Halk Bankasi (Peoples Bank) — Turkey’s seventh largest bank which is owned by the government.

US President Barack Obama signed into law, on December 31, 2011, new sanctions which seek to penalize other countries for importing Iran’s oil or doing transaction with Islamic Republic’s Central Bank.

Foreign ministers of the European Union also imposed sanctions on Iran’s oil imports over the country’s peaceful nuclear program during their Monday meeting in Brussels.

The sanctions involve an immediate ban on all new oil contracts with Iran and a freeze on the assets of the country’s Central Bank within the EU.

Tehran has warned that the embargo will have negative consequences, such as increasing the oil price.

Source

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Billionaire investor George Soros has a new prediction for America. While it might be as dire as it gets for the financial wiz, this bet concerns more than just the value of the buck. According to Soros, there’s about to be an all-out class war.

Soros, 81, previously bet against the British pound in the early 90s and made $1 billion off its collapse. In the years since, he’s remained active in investing, but also in advocacy. He’s helped keep Wikipedia afloat thanks to impressive contributions and through donations to the Tides Center, has indirectly funded Adbusters, the Canadian anti-capitalist magazine that put Occupy Wall Street on the map. Speaking to Newsweek recently, Soros neglected to acknowledge his past successes, but instead offered a word of warning: a period of “evil” is coming to the western world.

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros tells Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

Soros goes on to compare the current state of the western world with what the Soviet Union was facing as communism crumbled. Although he would think that history would have taught the globe a thing or two about noticing trends, Soros says that, despite past events providing a perfect example of what is to come, the end of an empire seems imminent.

“The collapse of the Soviet system was a pretty extraordinary event, and we are currently experiencing something similar in the developed world, without fully realizing what’s happening,” adds Soros.

Soros goes on to say that as the crisis in the Eurozone only worsens, the American financial system will continue to be hit hard. On the way to a full-blown collapse, he cautions, Americans should expect society to alter accordingly. Riots will hit the streets, says Soros, and as a result, “It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States.”

The recent adoption of the National Defense Authorization Act for Fiscal Year 2012 and the proposed Enemy Expatriation Act, if approved, have already very well paved the way for such a society. Under the NDAA, the US government is allowed to indefinitely detain and torture American citizens suspected of terror crimes without ever bringing them to trial. Should lawmakers Joe Lieberman (I-CT) and Charles Dent (R-PA) get their Enemy Expatriation Act through Congress, the US will also be able to simply revoke citizenship without trial, essentially removing constitutional rights from anyone deemed a threat.

Others have cautioned that, as inequality becomes more rampant in America, the country’s citizens are becoming increasingly agitated with those on the other side of the extreme. In a recent survey released by the Pew Research Center, 66 percent of the adults studied believe that either “very strong” or “strong” conflicts exist between America’s elite and the impoverished, a statistic that has skyrocketed in recent years. Between 2009 and 20011, the proportion of those that sense conflicts exist as such between the class groups grew by 19 percentage points. While less than half of Americans fearing a fight brewing at the dawn of the Obama administration, today two-out-of-three Americans feel that there is a strong conflict between both extremes of society.

Addressing the issue of inequality, Soros tells Newsweek that the main issue that will make or break a reelection for US President Barack Obama will be whether or not the rich end up being taxed more. Among the current frontrunners in the Republic Party’s race for the GOP nomination, wealth and taxes have been of the biggest concern of party rivals. The top candidates have made millions off of investments, and at a time of immense inequality, represent what 99 percent of Americans don’t. Taxing the rich to a bigger degree might finally bring a chance, and Soros says, “It shouldn’t be a difficult argument for Obama to make.”

Soros adds that if the US manages to make it through the troubled times to come, it come allow the nation to enter another golden era. “In the crisis period, the impossible becomes possible. The European Union could regain its luster. I’m hopeful that the United States, as a political entity, will pass a very severe test and actually strengthen the institution,” he tells Newsweek.

With almost seven percent of Americans living below half of the poverty line, four unemployed Americans for each job, a shrinking middle class and an increasingly overzealous police state, it could very well be a tough road to get there, though.

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Iranian Navy warships take part in maneuvers during the "Velayat-90" navy exercises in the Strait of Hormuz in southern Iran.

Tensions in the Gulf could reach a breaking point as a senior Iranian official said Iran would “definitely” close the Strait of Hormuz if an EU oil embargo disrupted the export of crude oil, the semi-official Fars news agency reports.

The announcement came in response to a decision by the European Union on Monday to impose an oil embargo on Iran over the country’s alleged nuclear weapons program.

“The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table,” EU foreign policy chief Catherine Ashton said.

However, with Washington’s decision to deploy a second carrier strike group in the Gulf, the EU’s attempt to pressure Iran economically could greatly increase the likelihood of all-out war in the region.

The Strait of Hormuz is the vital link between the Persian Gulf and the Gulf of Oman.

It is also one of the most strategic chokepoints in the world when it comes to oil transit.

With world oil output estimated at some 88 million barrels per day in 2011, the US Energy Information Administration estimated that some 17 million of those barrels passed through the Strait.

If economic sanctions sufficiently pressure Iran to retaliate by closing down the Strait, nearly 20 per cent of worldwide oil trade would be impacted, resulting in a massive spike in global energy costs.

With over half a million regular forces and an additional 120,000 personnel in the country’s elite Revolutionary Guard, analysts believe the consequences of a US-led war against Iran would dwarf recent Western-backed military incursions the Middle East.

Thus far, the US decision to maintain two carrier strike groups in the region has been described as “a routine activity” by Iran.

But the vast US military buildup in the region, which was bolstered when the Pentagon dispatched an additional 15,000 troops to the neighboring nation of Kuwait, was only the latest step in an obvious attempt by Washington to strengthen its military capabilities in the region.

However since 1988, when the United States managed to destroy some 25 per cent of Iran’s larger naval capability during Operation Praying Mantis, Iran has spent the last two decades preparing its Revolutionary Guard naval forces to exploit the vulnerabilities of the United States’ larger conventional forces.

According to Revolutionary Guard commander Brigadier General Jafaari, “The enemy is far more advanced technologically than we are, we have been using what is called asymmetric warfare methods… our forces are now well prepared for it,” he said, as cited by Global Bearings.

Ultimately, the latest round of brinkmanship between Iran and the West may force Iran to the negotiating table over its uranium enrichment program.

However, the EU strategy of averting “chaos in the Middle East” by tightening the economic noose around Iran could spark the very conflagration it was ostensibly trying to avert.

Source

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