Our initial reaction to the latest war in the Middle East was that it isn't likely to last long. However, wars are hard to predict. The fog of war can be very disorienting. The US and Israel killed the top leaders of Iran's regime during the first day of their attacks on the country. So we thought that might set the stage for a short war. However, the regime's Islamic Revolutionary Guard Corps (IRGC) is still fighting to protect the Islamic Republic from both external threats and internal ones (including the regular army and a popular revolution). It is a branch of Iran's armed forces established shortly after the 1979 Islamic Revolution. It is one of the most powerful and influential institutions in Iran.
The United States designated the IRGC as a Foreign Terrorist Organization (FTO) in April 2019 — the first time the US had made such a designation against a government entity. These terrorists are likely to be hard to eradicate with just air power. Their threats to attack ships sailing through the Strait of Hormuz have effectively closed the sea lane through which vital oil and gas supplies are shipped around the world.
End of free preview
Ed's analysis as news breaks — often the same day. Plus the full QuickTakes archive.
Individual investor? Get Ed's QuickTakes for personal use at yardeniquicktakes.com →