Trust me, I don't want to go where this commentary takes me.

An article on Tuesday titled 'A New Arms Race Looms between Russia and US' - reading time 4 minutes - reports on Russian and U.S. activities related to the recent concerns that have arisen over Iran's alleged continuing nuclear development program. I think that article is worth reading as a background to the other articles referenced in this commentary.

A further article, written by Robert Saiget and published late on Tuesday by Yahoo News, titled 'China's Hu urges navy to prepare for combat' - reading time 4 minutes - reports that on Tuesday Chinese President Hu Jintao "urged the (Chinese) navy to prepare for military combat, amid growing regional tensions over maritime disputes and a U.S. campaign to assert itself as a Pacific power". This strikes me as more a 'long-view statement' than an 'immediate-view' statement. That said, I suggest you read this article and as you do think of the old saying 'where there is smoke there is fire'. Also, I recommend you read this article as further background to the balance of this commentary.

An article yesterday written by Martin Katusa (of Casey Research) and re-published on the Financial Sense Blog is titled 'Why the Middle East Is Keeping Oil Traders, Politicians Awake at Night' - reading time 8 minutes. I strongly suggest you read this article. In summary it says that on November 8 the International Atomic Energy Agency claimed it has 'credible evidence' that Iran is still developing nuclear weapons. That is one-month old news, and I am sure you are well aware of it. That said, I consider this article a good summary of:

• Iran's oil output and its customers;

• the importance of the Strait of Hormuz to Middle East oil supply to international markets (about 20% of daily world oil supplies pass through that Strait which lies along Iran's southern coast); and,

• the impracticality (my words) of the European Union embargoing Iranian oil if Iran persists in developing its nuclear program, etc., etc.

The article describes the Strait of Hormuz as "the world's most important chokepoint for oil supplies". As a minimum, reading this article will be a refresher course for you in what you already know. Best case, you will learn things you didn't know before reading the article, and frankly may not want to know after you read the article if you live in Europe or North America. If you don't want to take the time to read the article, Katusa concludes with respect to Iran: "Do not underestimate Iran. Given reason, an attack on Israel is possible and a stranglehold on 15.5 million barrels of daily oil supply is probable. Either would escalate rapidly into scenarios we would all rather not contemplate." As I see things, such scenarios would almost certainly include a greatly escalated oil price, economic recession leading to likely depression in the developed countries, and escalated military activity led by the United States.

Katusa goes on in his article to discuss both Syria and Eygpt, concluding "The Middle East is about as far away from stable and predictable as you can get right now".

I also suggest you read 'Iran - Possible Implications of an Oil Embargo' by Euan Mearns and published on The Oil Drum Blog - reading time 5 minutes. This article will not take you as long as that to read, but it includes charts and maps that helped me better understand the numbers and the geography. This article concluded with, what I think are, two worrisome statements:

• the first of these is "With the risk of armed conflict against Iran increasing with every week that passes"; and,

• the second is "The second more extreme scenario is that armed conflict spreads, compromising oil exports through the Straights of Hormuz. Oil exports from Saudi Arabia, Kuwait, The United Arab Emirates (UAE), Qatar, Iraq and Iran all pass through Hormuz. Data is not available for Iraq, but exports from Saudi, Kuwait, UAE and Qatar stood at around 12,805,000 bpd in 2010. The global net export market stood at around 35,173,000 and so these 4 countries alone account for around 36.4% of the global export market (excluding Iraq and Iran). Should these exports cease, albeit temporarily, the oil price will go through the roof, causing severe trauma to the global economy, including China".

Again, I recommend this article to you.

Three comments:

• first, while I have not read anything written by anyone that the financial markets are currently pricing in a 'war' or 'wars' over oil, I suspect that will be a bandwagon many media gurus and pundits will jump on if what is going on in Iran and the Middle East escalates in the near term;

• second, a further war is the last thing the European Union and the United States needs at this point in time; and,

• third, from limited antidotal evidence I think that not all the 'smart people' in the financial services industries may be as attuned to the foregoing (and ongoing) events noted in this commentary as they might be. I suggest you discuss these things with your financial advisor(s) and get their views on how these things may (or may not) impact the financial markets going forward.

My Overview Comments on all of this.

Whether it happens in the next months, the next year, the next decade, or in the longer term, it seems to me that military confrontation over resources - food, water, fisheries, forests, land use, oil & gas, base metals, and precious metals to name obvious ones, eventually will occur. The only thing that I see preventing this is a cooperative and meaningful collaborative effort by all country governments to forge and enforce rules that have to do with restricting population growth, re-distributing what wealth exists so as to enable the world population to live in a much less 'privileged' way than some in the developed countries have enjoyed over the past many decades, and controlling generally how each world citizen lives their respective lives.

It is often said that 'nothing is impossible'. Of course that isn't true - for example, a human being cannot live without breathing - and I could cite hundreds of other examples of things that are simply impossible. One of those impossible things is to employ a finite amount of resources that occupy a finite space to nurture and maintain an infinite number of living organisms (of which human beings are but one type).

While I can't say that the type of cooperation/collaboration I have described among country governments is impossible in a theoretical sense, I think it is impossible in a practical sense. If you disagree with me, this is one time I simply say 'let's agree to disagree and move on'. I believe that in the end the root cause of war is economics and prospective economics, and that this has been a fact of life throughout history. This is one time I say history almost certainly at some point in time will prove to be a reliable predictor of the future.

You might fairly ask me "What Prompted You To Write The Last Three Paragraphs?". It was an article I read yesterday, and thought about throughout the day. That article, titled 'The Impoverished Asian Century' - reading time 6 minutes, was written by Chandran Nair and published on the Project Syndicate Blog. Chandran Nair is the founder of the Global Institute For Tomorrow and co-founder and chair of Avantage Ventures, a social investment advisory firm based in Hong Kong. He is the author of Consumptionomics: Asia's Role in Reshaping Capitalism and Saving the Planet.

I strongly suggest you read Mr. Nair's article carefully, spend some reflective time 'thinking for yourself', and then spend some time considering whether you agree with my views as expressed in this commentary.