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Why Iran Deal Is Good for the Economy

Posted on Nov 25, 2013

As Reuters reports, the wizards of finance expect the landmark nuclear deal between the U.S. and Iran to boost global growth and make us all feel a little bit richer. Here’s why.

First, Iran is a major oil exporter, and while the deal won’t let Iran increase its oil sales for half a year, more supply generally means cheaper supply, which has all sorts of ripple effects throughout the economy.

Here’s how one investor, quoted by Reuters, put it:

“Less tension in the Middle East is always a positive, and any drop in gas prices will essentially act as a tax break for consumers going into the holiday shopping season,” said Jeff Duncan, chief executive of Duncan Financial Management in St. Louis. “This is a real benefit for the economy.”

So not just more oil, but more stability—aka peace—is good for consumers.

Speaking of consumers, Iran has its fair share of those, with a population of more than 76 million. European airplane and automobile manufacturers were forced to cut sales to Iran because of sanctions. An easing of those sanctions means not only will more Peugeots be zipping around Tehran, but more of that Iranian oil money flowing into Europe and, from there, who knows where? Perhaps a French engineer will get a bonus, buy an Apple laptop and help feed a wage slave in China. The global economy works in mysterious ways.

Anyway, the moral of the story is this: We know that war can be profitable, for all the wrong reasons. It’s good to be reminded that peace is profitable too.

—Posted by Peter Z. Scheer

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