The Deal Is Signed — Who Won?

• It’s a done deal…
• Who won?…
• A Multi-Billionaire and Early Open AI Investor just made a stunning prediction. He just laid out his full research in a free presentation. For the time being, you can watch it here.

Dear Reader,

Axios reported last evening that the United States and Islamic Republic of Iran have remotely signed their memorandum of understanding to terminate the conflict.

The president applied his electronic signature from the Group of Seven Conference in France.

The Iranian signee — the Speaker of the nation’s Parliament — applied his own electronic signature, presumably from his native land.

The United States government has yet to expose the document to public view. Yet Bloomberg News reportedly acquired the 14-point Memorandum of Understanding.

Yet my men inform me that Bloomberg’s account largely — not entirely perhaps but largely — aligns with Iran’s listed Memorandum of Understanding.

Broad Consensus, With Exceptions

The feuding parties appear to have attained general consensus on cardinal points.

Firstly, that:

• The Islamic Republic of Iran and the United States, together with their allies in the current war, declare upon the signing of this Memorandum of Understanding an immediate and permanent end to the war on all fronts, including Lebanon, and undertake that from now on they will not launch any hostile action against each other, and will refrain from the threat or use of force against each other.  

Yet here a dilemma presents itself.

Iranian ally and Israeli foe Hezbollah infests Lebanon. Will the Israelis sit upon their twitching hands if Hezbollah assaults them from Lebanese territory?

The answer is no. Mr. Netanyahu has in fact pledged to maintain his assaults upon the Lebanon-housed militia.

Yet Iran’s foreign minister has claimed that the continued presence of Israeli forces in southern Lebanon — or any Israeli blows against Lebanon — would constitute a violation of the memorandum.

Thus the baby may face strangulation in its very crib.

No More Regime Change?

Secondly we learn that:

• The Islamic Republic of Iran and the United States undertake to respect each other’s sovereignty and territorial integrity, and to refrain from interfering in each other’s internal affairs.

To my knowledge the Islamic Republic of Iran has never menaced United States sovereignty or interfered unduly in its internal affairs.

United States respect for the Islamic Republic of Iran’s sovereignty and territorial integrity has been rather less… evident.

We must therefore conclude that the provision primarily chains down the United States.

Does this mean no more ambitions of regime change? Of arming Iranian citizens against their tyrannical government? Of democracy promotion?

And that the theocratic Iranian government can proceed to hang seditious freedom-lovers in their thousands?

I am quite certain this particular provision would discombobulate and enrage certain Fox News commentators.

They are hot for regime change. They believed they were getting it. And now — it appears — the United States is officially swearing it off.

At least $300 Billion to Iran? Isn’t That Reparations?

In the interest of space, let us pass over provisions three, four and five. On these points the United States and Islamic Republic of Iran evidently align.

Let us proceed then to provision six, which reads that:

• The United States undertakes, together with its regional partners, to create a comprehensive plan agreed upon by both parties for the rehabilitation and economic development of the Islamic Republic of Iran, While ensuring financing of at least $300 billion. The implementation mechanism of this plan, as part of the final agreement, will be formulated within 60 days.

At least $300 billion? Has not the president thundered that the United States would not ladle out one single dollar to Iran?

Has the president sunk to his knees… and thrown up the capitulating sponge? The answer, the technical answer, is no.

The money will be private money.

Uncle Sam Won’t Pay a Dime

Reports Reuters:

• The new fund is a private investment vehicle, not a reconstruction or reparations program and will not include any ⁠government money or grants, the source said, adding that companies based in the U.S., the Gulf Arab states, Asia, South America and Africa have agreed to commit financing.
• Investments ​pledged span energy, logistics, manufacturing and transport, the source said.
• A senior Iranian source told Reuters that Tehran had originally sought $400 billion as compensation for war damages from the U.S. ​but Washington had said it would not provide it…
• The mechanism envisages regional countries contributing in various ways, the Iranian source said. These include securing loans, establishing credit lines or directly financing the reconstruction of sites damaged in the war…

Many drummers for the conflict will nonetheless bellyache that Iran will receive a richly undeserved windfall.

Don’t Sanctions Have to Be Lifted Before Large-Scale Investment Can Occur?

Yet Iran is a deeply, deeply sanctioned nation. Will this $300 billion of private money jeopardize itself by investing in a nation so deeply under global economic excommunication?

Thus we are led to provision seven, which reads that:

• The United States commits to ending, on a schedule to be agreed upon as part of the final agreement, all types of sanctions currently facing the Islamic Republic of Iran, including resolutions of the United Nations Security Council and the Board of Governors of the International Atomic Energy Agency (IAEA), and all unilateral U.S. sanctions, both primary and secondary.

Yet is the United States truly prepared to waive all types of sanctions currently facing the Islamic Republic of Iran?

Would it not constitute a thundering victory for the Islamic Republic — and a white flag-raising for the United States?

Here I believe lies what professional men label a “sticking point.”

Iran appears to demand sanctions relief as a condition for additional negotiation. The United States, meantime, regards sanctions relief as a carrot to reward good behavior.

That is, the United States is not prepared to provide sanctions relief initially… but as a tiered process subject to Iranian compliance on various provisions.

I hazard the distinction between the two interpretations may sabotage negotiations.

Which Side Won?

I lack the space to tackle all the Memorandum of Understanding’s provisions — and in candor, the interest to.

You may consult them if you wish. Yet here is the question worth $64,000:

Which side “won?”

Here Zero Hedge scores the bout:

• Based on the text… the first take of the MoU appears to be front-loaded economic relief for Tehran in exchange for a ceasefire, a nuclear freeze, and commitments to negotiate hard topics, such as the nuclear program, at a later date. 
• Tehran benefits most directly because it gets economic oxygen, oil waivers, frozen funds, sanctions relief language, and reduced US military pressure in the region.
• Hezbollah and Iran-aligned actors also benefit if “all fronts, including Lebanon” locks in a ceasefire that constrains Israeli operations…
• The US loses some coercive leverage once the Hormuz blockade ends, oil waivers are granted, and asset-release mechanisms begin.
• Israel loses freedom of action if the agreement binds the Lebanon front and limits further strikes.
• Sanctions and hawks lose leverage because the draft moves quickly toward broad sanctions dismantlement.

The Winner by Majority Decision

I award the bout to the Islamic Republic of Iran. Not by knockout perhaps, not by technical knockout, but by majority decision.

I do not doubt that the United States visited substantial military damage upon the Islamic Republic.

Yet its toy navy and baling wire air force were not its primary implements of power.

Meantime, my spies inform me that its actual implements of power — its speedboat naval flotillas, its vast missile stocks and even vaster drone stocks — went heavily unmolested.

What is more, the Islamic Republic may yet emerge with dominion over the vital Hormuz Strait. It lacked all such dominion prior to the conflict.

And the Islamic Republic may finally wriggle free of the suffocating economic sanctions that have choked its growth for years.

Thus the majority decision in favor of Iran.

As a proud American patriot, I do not celebrate it. Yet as an objective observer of events, I must acknowledge it.

And so I ask: What precisely did the conflict accomplish?

Why Trump Desperately Needed a Deal

I believe President Trump was so hot for a resolution, he was willing to grant Iran concessions he previously would not.

Well did the shrewd and wily Iranians know it.

Why did the president relent? His own words give him away:

“We run out of reserves in about four weeks.”

That is, we run out of oil reserves in about four weeks.

And there you have your answer.

Regards,

Brian Maher

for Freedom Financial News