For most Americans, the geopolitical/financial crises of the 1970s happened so long ago that they're about as relevant as the Revolutionary War or the Reformation.
But for seasoned citizens who were around back then and paying attention, the similarities to today are becoming both eerie and scary. Consider:
In the early 1970s, the Middle East was a hotly contested part of the world, with Russia (then called the Soviet Union) and the US (backed by Europe) maneuvering for control of the region's oil. Israel was a source of outrage for its neighbors, with war always a real possibility. The Sunni/Shia rift was in danger of tearing the Islamic world apart. AND government spending was soaring in the West, leading to highly experimental (read desperate) monetary policy at the Fed.
Given all those lit fuses, it's no surprise that the powder keg eventually blew up, producing local wars, broader confrontations between nuclear powers, spiking oil prices and inflation. Here's oil and US inflation during the decade:
Now fast forward to this week. Russia and the US are butting heads in Syria. The Sunni/Shia rivalry has become a shooting war between Iranian and Saudi surrogates with the principals not far from joining in. And Israel, after a long stretch away from center stage, is back with a vengeance:
Israel Strikes Meant to Thwart Iran's Influence in Syria
(Wall Street Journal) – Israel's blistering counterattack to Iranian rocket fire at its soldiers early Thursday shows the country is determined to dislodge Tehran's forces in Syria from its border, despite the risk of a wider Middle East war.
In what the Israeli military called its largest-ever operation inside Syria, warplanes made dozens of strikes against key Iranian infrastructure, an overwhelming response after an Iranian unit in Syria fired about 20 short-range artillery rockets that Israel said were either shot down or fell short of a nearby military base.
The u.s. and Israel are increasingly concerned about Iran's exploitation of the instability of Syria's seven-year war to spread its influence, with officials saying they see its activities there as part of Iran's efforts to project power in the wider region.
Israel's military wants to prevent Tehran from building up military capabilities in Syria comparable to those in neighboring Lebanon, where it has nurtured the Shiite militia Hezbollah and helped it confront Israel militarily, according to Amos Yadlin, a former head of Israeli military intelligence.
“They will not let them duplicate Hezbollah,” he said. “They will not let them have an advanced military capability in Syria.”
Some analysts and officials see President Donald Trump's decision to withdraw from the multilateral nuclear accord on Tuesday a potential trigger for more violence, as Iran seeks to punish the U.S. and its regional allies through the proxies it controls.
