Posted Jun 17, 2025 by Martin Armstrong 

QUESTION: Iran has been a revolutionary religious state that has sponsored terrorism. What do you think is the solution?

GR

ANSWER: This ideal situation would be a counter-revolution within Iran to remove this religiously dominated government since the 1979 revolution that overthrew the Shah and began with the American hostage crisis. There are a lot of Iranian businessmen who would love to return to Iran. It is a country that is twice the size of Texas and also has tremendous resources. I fear that this attempt at regime change runs the risk of (1) instigating a holy war that will tear Europe apart, and (2) it runs the risk of bringing in China and Russia.

We have to tread very carefully. Trump has said, “We now have complete and total control of the skies over Iran,” and he has called for Iran’s “unconditional surrender.” He has also stated bluntly that the United States knows “exactly where” Iranian Supreme Leader Ali Khamenei is hiding—calling him an “easy target” but saying he would not be killed “at least not for now.”

The best possible outcome is a domestic revolution and the overthrow of the Supreme Leader, Ali Khamenei. Otherwise, our computer is warning that this can become a much larger problem. Our models are indicating rising volatility into July and a potentially severe Panic Cycle in August, which I hope does not signal the broader expansion of this conflict. For now, all air traffic has been shut down in Israel and Jordon. You cannot leave or come in.

Historically, wars can be settled by negotiation when the core issue is economic. Here, the Iranian government, since 1979, has maintained Death to America and Death to Israel. They have sponsored terrorism through their proxies, Hezbollah, Houthis, and Hamas. I am not confident that there will be an unconditional surrender. This could escalate into a religious war that will last into 2027. A civil uprising where the people of Iran take back their country that is INDEPENDENT, would be more difficult for Russia and China to ignore.