On the face of it, this would appear to be another step towards open war between the U.S. and Iran. The very savvy John Robb is thinking along these lines:
Ahmadinejad's visit is an opportunity for a manufactured uproar, which in turn will lead to the designation of the Revolutionary Guard Corps as a terrorist organization. This, of course, is the pretext for bombing the Guard.
I'd say he's probably correct, but as we move forward, I wonder if I have underestimated Bush 43. I am on record as opposing the invasion of Iraq from the get-go and have thought many of his actions will leave the U.S. in a much weaker geopolitcal position when he finally leaves office.
But with recent positivie developments in the North Korean talks, I am beginning to wonder if the Bush 43 administration is making a final push to wrap things up on their foreign policy agenda - via diplomacy, of all things.
Talks with North Korea have been going well, recently, and have resulted in the shutdown of the Yongbyon reactor. In addition, there have been reports from Stratfor (sorry, behind a subscription wall or I'd link to it) that maybe there was a nuclear connection between the NORK's and Syria and that the raid was conducted off of detailed information given up by the NORK's. I still regard it as unlikely, but I guess it is possible.
If that is the case, then we might see a "Grand Bargain" of some sort very soon which would bring North Korea in from the cold in the same manner Libya was reintegrated into the world system when they gave up their nuke program and ratted out the AQ Khan network.
That would leave Iran one very isolated place. With North Korea taken care of, the Bush 43 administration would then be able to focus solely on Iran (well, and Syria, I guess, but that is more of a sideshow). That focus might still be via the military, such as strikes on IRGC bases, but with a big diplomatic win with charter "Axis of Evil" member North Korea, the Iranians might, just might, but up for caving in to U.S. demands.
That would require continued high levels of optimism and confidence, which implies continued high levels in the various financial markets and general economies of most of the countries who wield a big stick - the U.S., the Europeans, Russia, China, etc.
Maybe, just maybe, they can wrap this thing up with both Iran and North Korea before the worst of the eonomic effects of the Baby Boom generation retirement wave, the mortgage mess and the credit card debt bomb are felt. That would give us a much better context in which we would enter the coming downdraft in mood and markets.