America has sent warships into the direction of Iran. I suspect that the main purpose of this step is to impress Saudi Arabia. After the economic crash of 2008, the world's oil consumption has now returned to the level of 2008. Saudi Arabia holds most of the world's spare production capacity, about 4 million barrels per day. With the current growth of the world economy, an amazing 4 percent per year, we will run out of this spare production capacity by the summer of 2012.
For now, Saudi Arabia can keep oil prices low, and this is what Abdullah has promised to Obama, provided that Obama performs. The Saudis want Obama to create a Palestinian state, and to neutralize Iran. Here is Obama's predicament. It is dangerous to attack Iran. The oil prices would likely explode. America could collapse. Therefore, to ensure two years of economic stability, Obama will have to follow his fantasy and go for a Palestinian state. Israel should not comply. The coin can be flipped. If Obama cannot make a Palestinian state, he will have to tackle Iran.
