Cash Flow Jihad Meets Aftermath

It is interesting that despite the proclamations of "victory" and early post war intrasigence, Hizbollah is giving in to the demands of the Lebanese Government (sort of) to allow the Lebanese Government to take control of South Lebanon. They still refuse to be disarmed (they promise to not carry their arms openly), they still claim the right to "resist" the Israelis, but they have done nothing that would renew the hostilities.

This is a mystery. They are not acting victorious. They are not dictating terms (much). They are submitting to the Lebanese Army and French peacekeepers under a UN mandate. Why would that be?

It seems not even the Lebanese Shia are happy with Hezbollah.

The tone in Lebanon has already changed. According to friends in Beirut, not even the Shia were happy with Hezbollah leader Hassan Nasrallah's post-ceasefire speech.

The Shia community is the most vulnerable right now. Hezbollah is using fierce rhetoric, most likely, to intimidate other Lebanese politicians and sects from criticizing them and to delay any talk of their disarmament. This rhetorical move is sending shivers down the spines of most Shia because now is precisely the time to talk about Hezbollah's weapons. We were talking about them before in an effort to prevent something happening like what just occurred. Now, the urgency to talk is even greater.

Hezbollah's rhetoric is frightening many Shia because they are without homes, food, electricity, medication, money, roads, utilities, and other necessities. They could take the fight against Israel. They can't take much more. And they definitely can't take arms against the people who most recently supported them when they were in need; the very people who currently in a much better state than those who lost their homes.

Many Shia claim that if Hezbollah doesn't provide them with support very soon, they will no longer be able to support the organization. Many Shia were willing to support Hezbollah through thick and thin because Hezbollah took care of them. In Dahieh Jounoubieh (the southern suburbs of Beirut which is primiarly Shia and where Hezbollah's headquarters are located), Hezbollah was referred to as chebab (guys) who took care of all sorts of mundane problems.

The problem for the Shia is that those neighborhoods are gone. Israel's tactic of avoiding death and sticking to destruction has created a logistical nightmare for Hizbollah. They now have a vast Army of walking wounded to deal with. The dead are low maintenance, the wounded are high maintenance. This is a very expensive problem. Food, shelter, and housing must be provided to all those supporters and their families. The tall apartment complexes that housed so many are rubble. So people used to living in Beirut must now be housed in the country side in tents. To these tents must be delivered food, water, blankets, and sanitary facilities. They have to deliver all this over a road net that has numerous blocks. This is not Hezbollah's area of expertise.

Then there is the military degradation of Hizbollah.

Hezbollah does not have the strength to bully around the Lebanese government like it did before. They very well could face isolation if they do not play their cards correctly. What could aid in this occurring would be tearing Shia Parliamentary Speaker Nabih Berri away from Hezbollah. Doing so probably won't be difficult. The threat alone of freezing his bank account filled with bloody money will get him singing a different tune. We'll see if other Shia leadership, like Hussein Husseini, are willing to speak a more moderate line.

You know the reason the Hizbollah may have demanded to keep their weapons is that they fear for their lives.

So what does all this have to do with the Cash Flow Jihad? There are estimates out there that Iran spent $4 to $6 billion on rockets and general military strength. Probably another equivalent amount on all the destroyed high rises. Then there are all the houses missing in the south. This is putting a huge strain on Iran's cash flow if it intends to keep the Lebanese Shia bought. If it doesn't keep them bought Hezbollah is going to have a huge problem on its hands.

Iran currently has oil income in the $30 to $45 billion range. And yet this is not enough to keep its population pacified. So it has choices to make. Immediate choices. Curtail its military program. Abandon Hizbollah. Accept increasing unrest in Iran.

Iran was reported to have withdrawn on the order of $35 billion in cash and gold from European banks, probably to avoid getting it embargoed by the US's efforts to squeeze the terror network's cash flow.


There is a huge demand for gold in Iran due to the people expecting a war momentarily.

This is the modern way of doing a blockade. Don't cut off the supply of goods by land and naval blockade (although the Israeli Naval blockade is helping short term by strangling Lebanon of fuel, food, and military resources), cut off the cash to buy the stuff. That makes Iran an instant credit risk. It pretty much has to pay cash for everything. This is not very efficient.

The Jihadis are getting strangled by the lack of bits on computer networks. Since bits are practically free it is the control of the networks that count. And who controls the networks? The Great Satan.

Blockade is a slow form of warfare, however, it slowly weakens and then kills the ability to resist. By creating such huge economic losses for Iran ( Syria is broke and full of refugees ) Israel has speeded up the action of the cash flow Jihad.

Update: 17 August '06 2345z

There are some excellent comments. I'm going to bring some of them forward a little later.

Update: 18 August '06 0511z

Commenter Adam said this about a Shimon Peres appearance on CSPAN:

Following some comments that Peres made tonight, I think I can articulate the core of that policy as "creating the conditions in which the enemy is destroyed by his own internal contradictions".

I amplify on that in You Say You Want a Revolution?

Ros made a long comment about unrest in Iran. Read it. Thanks Ros for your knowledge and insight.

Carol Herman reminds me of the $4.5 bn Lebanon lost when they they found out that except for a few intrepid souls, war zones are not attractive to most tourists.

Update: 18 August '06 1244z

Reuters reports that Hizbollah is handing out wads of cash to people who have lost their homes in the recent war in Lebanon. The cash is going to 15,000 families who have lost their homes and the amounts are reported to be $12,000 each.

I guess the decision has been made: hold the home front with more repression, hold Lebanon with cash. DNA India reports on a crackdown on satellite dishes in Tehran to prevent western cultural imperialism. Of course such crackdowns only make western culture more attractive. At least that is how it worked in the USSR. Say, what happened to them anyway? You never hear much about them these days.

Update: 18 August '06 1653z

Carl in Jerusalem thinks the money may be counterfeit.

Which reminds me that it's crackers to slip a rozzer the dropsy in snide.

Update: 20 August '06 0834z

Little Green Footballs discusses the counterfeiting story.

Update: 21 August '06 0353z

Reader Paul and I were exchanging e-mails and he got me looking at Iran's behavior re-military exercises and the destruction of satellite dishes. Well it got me thinking. And I came up with this:

I think they are comitted to some action they feel almost sure will start a war.

They have been promising fireworks on the 22nd. It is part of their war plan. Think of the time Oral Roberts went begging for money so that the Maker wouldn't call him. Evidently he got enough. Well the question here is: will I'm-a-nut-job get enough of what he wants? Or is it possible he will get too much. Olmert is weak so now he has to act super tough. I think the President of Iran looks best in earth tones. It is his alpha male color. Brown. Makes some kinds of stains almost invisible.

Israel is in no mood to cower or be trifled with. They think they just lost a war and they want revenge. A rematch. Any foe. The sooner the better. Their blood is up.

Think Genereal Grant in the Battle of the Wilderness. By most accounts he lost that battle. But Grant advanced and Lee retreated.

Update: 27 Aug '06 2328z

Captain's Quarters is of the opinion Hizballah lost.