War, Financial Crisis, and the Ghost of the Potemkin

As I write these lines on August 22, it seems the Memorandum of Understanding (MOU) signed in June 2026 has broken down completely. In Lebanon, the termination of Israeli bombing and the withdrawal of Israeli troops from the south as the MOU required did not occur. The Trump administration declared a designated route through the blockaded Strait of Hormuz, and Iran fired upon ships taking that path. Trump responded with a new 13-day bombing campaign.

Reports are circulating that the U.S. is running out of the anti-missile weapons designed to neutralize Iran’s missiles, which were used with great effect against U.S. and Israeli targets during the initial fighting in March and early April 2026. The supply has been drained by the war in this region as well as by the proxy war being fought by the U.S.-NATO empire over Ukraine. When the U.S. and Israel attacked Iran, Iran retaliated. It seems the Trump administration believed Iran would give up after about six weeks.

Iran did not surrender. Instead, it met each blow with an effective counterattack, putting Trump in a bind. Panicked by the failure to capitulate, in June the administration signed the MOU, seeming to agree to many of Iran’s demands. Trump soon reneged on the agreement, launching a new bombing campaign, and shooting incidents continue in the Persian Gulf and the Strait of Hormuz. Trump declared an all-out economic war or an economic D-Day. Faced with such threats, Iran hints that if the war isn’t ended soon along the lines of the MOU, it may take the initiative in hitting U.S.-Israeli targets, depriving Trump of the ability to turn the war on and off according to his wishes and needs.

Iran War Restarts as Financial Pressures Increase

On June 17, a Memorandum of Understanding (MOU) was signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian. It contained 14 points that the U.S. media have considered favorable to Iran. These included reopening the Strait of Hormuz with no tolls for the next sixty days, with Iran retaining military control of the strait; extending the ongoing ceasefire for sixty days; ending the U.S. naval blockade of Iranian ports; and releasing Iran’s funds that had been frozen (stolen) by the U.S. The Zionist entity was also supposed to end its latest war against Lebanon, among other things. An MOU is far from a peace treaty, and though it did not end the war, together with the ceasefire it seemed to put the attacks on ice for the time being, at least as far as the military side of things was concerned.

Why Trump retreated from all-out war with Iran

On June 17, a Memorandum of Understanding (MOU) was signed by Iranian President Masoud Pezeshkian and Donald Trump. It extends the April ceasefire for at least sixty days — with the possibility of extension — and provides a framework for negotiations to end the U.S.-Israel war on Iran. Though this is not a peace treaty, it represents a big retreat from Trump’s demand that Iran surrender unconditionally when he began the war on February 28. He started the war with the murder of Iran’s supreme leader, Seyyed Ali Khamenei, and other leaders. If Iran had knuckled under, it would have fallen under U.S. government control.

War on Iran Developments and a New Federal Reserve Chief

On May 22, 2026, Kevin Warsh (b. 1970) became chair of the Federal Reserve Board of Governors, replacing Jerome Powell. Donald Trump nominated both Warsh and Powell, and both are Republicans. Trump often attacked Powell for not lowering interest rates, threatened to fire him and threatened him with criminal prosecution ostensibly for improper use of funds to modernize the Federal Reserve building located in Washington, D.C.

Whether Trump’s relationship with Warsh will be any smoother than with Powell, and to what extent Warsh will serve Trump and the Republicans’ partisan interests as opposed to doing what he thinks will be in the best interests of U.S. capitalism, remains to be seen. Trump, who celebrates his 80th birthday June 14, 2026, will likely not run for office again. This November will see midterm elections, when seats in one-third of the Senate and the entire House of Representatives will be at stake.

Republicans fear, with good reason, that they’ll lose control of the House, perhaps by a big margin, and possibly the Senate as well, though this is less likely. If this happens, Trump could face a third impeachment by the House and, depending on circumstances, conviction by the Senate, resulting in his ouster before the end of his second term. I’ll examine this more closely as the November elections approach.

War, Oil, and the Jewish Question

Commentators point to the rise in oil prices driven by the Strait of Hormuz closure and damage to the refineries in the Persian Gulf region as the main force driving up inflation. They say it will cause a return to a 1970s-type stagflation — high inflation, economic stagnation and unemployment — and deep recession. Others predict that if the current ceasefire ends in renewed war this will cause a world Depression (with a capital D) worse than even the 1930s.

How much truth is there in these predictions? Historically, a war did not precede the 1930s Great Depression to drive up the prices of various commodities. True, the high commodity prices in general relative to commodity values and production prices played a crucial role in putting the “Great” in that economic crisis and Depression. Could something similar happen as a result of the current war, even though it has not yet reached the scale of World War I?

Early in this blog, in examining the causes of crises, we explored the theory of disproportionate production that arises out of the anarchy of capitalist production. The main question political economy dealt with was not explaining why it occurred in an unplanned capitalist system, but how the proportions needed to continue production are achieved at all. In reality, disproportionate production occurs and has occurred almost every minute throughout the history of capitalist production. At any given moment, some commodities are overproduced relative to others, while some commodities are underproduced. When one kind of commodity is underproduced, its market prices rise above its value, or more strictly, its production price. When overproduced, a commodity’s market price falls below its value and production price.

A Marxist Guide to Capitalist Crises

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Marx planned to crown his critique of political economy with a book on the world market, competition, and crises — but never had the time to write it. Since then, Marxists have proposed diverse and often contradictory theories to explain the periodic economic crises that have marked capitalism’s concrete history since 1825. A Marxist Guide to Capitalist Crises takes up the unfinished task.

Based on the blog Critique of Crisis Theory, the book examines the most influential crisis theories put forward since Engels’ death, from Rosa Luxemburg’s underconsumptionism to the breakdown theories of Henryk Grossman and Paul Mattick. It traces the evolution of capitalism from the era of free competition through monopoly capitalism, the Great Depression, the Keynesian era, the end of the international gold standard, and the neoliberal reaction — up through the crisis of 2007–09 and its aftermath.

Along the way, Williams takes up currency, credit, banking, interest rates, exchange rates, world trade, the law of comparative advantage, and the disputed question of long waves. The result is a crisis theory rooted in the basic laws of motion Marx worked out, but grounded in the concrete conditions of competition and credit on the world market.

The book is free to download as a PDF or buy the paperback.

Economy and War

Update April 13

After five weeks of the United States and Israel bombing Iran, as its neighboring oil monarchies collaborated in the attacks, it became clear from the viewpoint of the Trump administration that the war wasn’t going anywhere. There was talk that the U.S. might seize one or more Iranian islands, though even if successful, this would have achieved little. A full-scale invasion of Iran, meaning a march on Tehran, is out of the question at the current time.

Iran is a country of around 93 million people. This is larger than the German population of 80 million at the time of the U.S. invasion of Western Europe and Germany in 1944-1945. In geographical size, Iran is about the size of Western Europe. And of course, there is no equivalent to the armed forces of the Soviet Union attacking from the other side. This means that a “march on Tehran” like the march on Baghdad in 2003 is ruled out. If attempted, this would be the largest foreign military operation by the U.S. since 1945 and possibly larger. This would require, at the least, a full-scale mobilization with a renewed military draft.

In 1944-45, the U.S. enjoyed the support of most of the non-German Western European population, who did not want to be ruled by Nazi Germany. This certainly would not be the case in any attempted “march on Tehran” today. There are other differences as well, that are not in the U.S.’s favor. In 1944-45, U.S. industry was, relative to that of other countries, at its historic peak. Today, the U.S. lags far behind China. The effects of the long-term decline are being felt as the U.S. and its extension, the Zionist entity, are running low on munitions. Unlike before, when the U.S. dollar was rock solid, the dollar has been plunging against gold. The dollar price of gold was above $5,000 per ounce when the war began on February 28, and the Trump administration was forced to accept a two-week ceasefire on April 8. Talks to find a permanent end to the war began in Pakistan on April 11 and collapsed the next day when the U.S. insisted that Iran give up its entire nuclear power industry.

The U.S. then announced it was blockading all trade through the Strait of Hormuz, effective April 13. This is an Act of War by the United States against the Islamic Republic of Iran. Whether this will lead to a resumption of large-scale military action and what form it may take is unknown as of the time of this writing on April 13, 8:36 a.m., Pacific time. It appears that the Trump administration is hoping that by preventing Iran from selling oil on the world market, it will be forced to surrender to U.S. demands.

Gold, Oil, and the Road to War

On Friday, Feb. 28, 2026, the government of Donald Trump, along with the Zionist entity, launched a full-scale military assault on Iran. Trump indicated that, as he did during the so-called 12-day war in June 2025, the attack aimed at killing top Iranian leaders.

This time, the targets included Iran’s “supreme leader” — as the expression is translated in the West — Ayatollah Ali Khamenei. The 86-year-old was the religious leader of Shia Islam based in Iran, and other Muslims respected him as well. Millions of Iranians were outraged, as millions of Catholics and other Christians would be if a powerful nation bombed the Vatican to kill the pope. A U.S. airstrike on a girls’ elementary school killed, according to one estimate, almost 170 people, mostly schoolgirls. A brilliant example of U.S. military technology and power!?!

In addition to joining the assault, the Zionist entity has gone even further. It launched a massive attack on Lebanon, intending to drive out all Arab people from the southern part of the country. If that isn’t enough, it tightened its food blockade against Gaza, escalating the genocide, while the assault on Iran diverts the attention of the world. The war on Iran raises many questions, including the relationship between the Zionist entity, the so-called State of Israel, and the U.S.-NATO world empire.

The Reichsbank in 1939 and the Federal Reserve in 2026

In January 2026, the Trump administration launched additional attacks on the Federal Reserve System’s independence. This caused the gold market to go into a frenzy, with the dollar gold price spiking to over $5,500 an ounce. The price then plunged back below $5,000 after Trump announced the nomination of veteran central banker and Wall Street favorite Kevin Warsh to head the Fed after chair Jay Powell’s term ends in May. As of early February, the price has fluctuated around $5,000. While this may seem obscure to laypeople, it points to the economic roots of crises that have erupted on many fronts.

We’ll begin with Iran, then turn to the general strike in Minnesota on January 23.

From Surplus Value Producers to Associated Producers of the World

Many books on Marxist economic theory end with the author describing what a future socialist – or communist – society will look like. Inevitably, these portraits of the future society reflect the author’s personal views and often contain bourgeois prejudices. We are all, Marxists included, products of the society we were born in and live in. This means that our ability to transcend the bourgeois society we were born and raised in, and our imagination, is not unlimited. The present author does not claim to be an exception.