
People are also trading
Absolutely not.
All of the good that comes from the volcano suggestion comes from the belief in the volcano - the people want to leave San Francisco (but who can't leave because of the strong network effects of being around other people who also can't leave SF) all leave at the same time.
If people don't yet believe that SF is going to be destroyed by a volcano then destroying it with a volcano would be a terrible act - it would lead to death and destruction and bring none of the volcano-belief based benefits.
But if people do believe in the volcano and abandon SF, he doesn't need to destroy SF with a volcano yet. All of the benefits have been realised without the need to set off a volcano.
So there's no circumstance in which he needs to destroy San Francisco, Israel or anywhere else with a volcano.
@SimonGrayson Oh shit, by betting this down I've ruined his attempt to convince the people of San Francisco that there's about to be a volcano eruption, haven't I?