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The axis of catastrophe

One of the underappreciated aspects of the crisis in Iran is its linkage with Venezuela.  This collapsing Caribbean nation has a geostrategic alliance with embattled Iran.  Some aspects are financial.  Venezuela is relying on Iran and Syria to pull it out of the economic mire. "Facing potentially debilitating oil sanctions from the Trump administration, the Caracas government is searching desperately for new ways to get its most valuable commodity — oil — to awaiting buyers. ... The Venezuelan government is working with Iran and Syria to start construction this year on a new refinery in Syria that will process up to 140,000 barrels of oil per day, according to an announcement by Iran’s Research Institute of the Petroleum Industry."

Other ties are military.  Caracas closely coordinated with Iran's foreign legion, Hezbollah, to create a dual purpose criminal/terror network in the Americas whose primary target was the USA.  What happens to this empire if Hezbollah falls from favor at home?

In its determination to secure a nuclear deal with Iran, the Obama administration derailed an ambitious law enforcement campaign targeting drug trafficking by the Iranian-backed terrorist group Hezbollah, even as it was funneling cocaine into the United States, according to a POLITICO investigation. ...

As a result, the U.S. government lost insight into not only drug trafficking and other criminal activity worldwide, but also into Hezbollah’s illicit conspiracies with top officials in the Iranian, Syrian, Venezuelan and Russian governments — all the way up to presidents Nicolas Maduro, Assad and Putin, according to former task force members and other current and former U.S. officials.

These links mean that risks now rising in each nation feed into the other.  Like bankrupts who have guaranteed each other's scams as one declines it will pull the other down.  Iran's woes increase Venezuela's -- and vice versa. But the chain of causality doesn't end there.  North Korea is also suspected to be part of an internationally distributed WMD program, where Iran takes the lead in missile development and North Korea assumes the responsibility for nuclear warhead design and vehicle testing.

This means unrest in Tehran brings sleeplessness nights in Pyongyang. The positive side of these linkages is that Kim Jong Un's recent overtures to Seoul may be driven in part by the worry that his missile partner may go belly up. But on the negative side it also means that applying sanctions against one have a ripple effect on the other.  The overall risk is greater than the sum of the individually distressed countries.

Putin understands this. He knows that to save one he has to find a way of evading the sanction system as a whole.  The New York Times reports:

Russian and Venezuelan officials are hoping virtual currencies can help their countries make an end run around American sanctions.

Both governments, with ambitions to create state-sponsored cryptocurrencies, are looking to take advantage of the promise that Bitcoin introduced to the world financial system: a new kind of money and financial infrastructure, outside the control of any central authority, particularly the United States.

The danger and opportunity for the Trump administration -- it's a two sided coin -- is that the entire Venezuela-Iran-North Korea axis could suddenly take off in an unpredictable direction.  Push down in Tehran and Pyongyang may act up.  There's enough complexity in the system to make it difficult to manage. The liberal punditry is finally realizing that you can't predict the future.  But that is exactly what they based the Obama Iran deal upon in the first place: a scenario that never came true.  Now they warn: we don't know anything about Iran!

Even events from outside the axis could ricochet around the system.  Recently Senator Rand Paul tweeted: "I’m introducing a bill to end aid to Pakistan in the coming days. My bill will take the money that would have gone to Pakistan and put it in an infrastructure fund to build roads and bridges here at home."  Could a fall in Pakistan's fortunes affect Venezuela? The seemingly domestic issue of fracking had unappreciated international effects in 2015: it cascaded through Russia, Iran, Venezuela and Saudi Arabia.

Now CNN predicts America might be oil king of the world.  What could happen? 2018 could be an interesting year.

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