Nobody should ever put trump and strategy in one sentence
dude67344 on
If you believe one word out if his mouth..I got a bridge to sell you, and its cheap.
Zealousideal-Plum823 on
It’s just part of the psychological part of the war. It’s like trash talking before a wrestling event. The audience loves it, but it doesn’t change the facts on the ground. In the short-term, while tankers that were fully loaded 2 weeks ago and previously made their way through the Straits of Hormuz are now approaching their destinations, this talk kept prices lower than otherwise. But demand destruction must occur! There’s 10-20 million barrels of oil per day that are simply not being pumped that previously were.
Economic theory dictates that if supply is reduced, the price must rise so that the supply curve intersects the demand curve. In the longer-term (many months to years), people will find alternatives to oil such as commuting on electric skate board and bicycles and taking long-distance rail instead of airplanes.
The current peace talks have the same players on the U.S. side that existed during the U.S./Ukraine/Russia peace talks. The U.S. expressed bravado that a deal was moments away … for many weeks. The Ukraine/Russia war is still ongoing. The Iranians are just as motivated as Russia, perhaps even more so because Iran wants its current territorial integrity and its theocracy with its highly distributed command and control system is fervent. It’s their home turf. They know that eventually the U.S. and Israel will use up all of their bombs and missiles. Meanwhile, Iran can churn out bazillions of small attack drones and speed boat placed water mines. As for a land war, I take a page from the movie “Princess Bride” … “Never get into a land war in Asia” … extrapolated to any country that is far, far away from where the attacking country is located. The logistical lines between the U.S. and Iran are complex, long, and expensive. The logistical lines between Iran and Iranians is incredibly short and responsive. Iran just has to outlast the U.S.
In the U.S., inflation is ticking up (there’s a correlation of 0.27 between the increase in the price of oil and the CPI inflation rate according to the St. Louis FED … this should make the U.S. administration very, very worried), and GOP support for the war is showing serious cracks given the most recent CPAC conference. (younger GOP voters believed their leader when he said, “no more endless wars” and now they’re bitter and angry). Rural supporters are getting hit hard with sharp price increases of gasoline, diesel, and fertilizer. There is no winning in the cornfields, even with a relaxation of ethanol to 15% of gasoline content.
Given that the Iranian’s already know all of this, why would they bend the knee in peace talks? Instead, I predict that they’ll hold firm – territorial integrity, war reparations, a sincere apology, etc. They won’t give up their oil fields, Kharg, or control of the Straits of Hormuz.
The result of this asymmetric situation is that the war will likely go on until the economic pain to the U.S. is so extreme that they finally stop attacking. My guess is at least another 6-10 weeks. This implies an oil price of $200/barrel, massive shortages of prescription medications, shortages of tech (helium and LNG shortages), inflation rate that’s in excess of 15%, and serious doubts that the U.S. Government can continue to increase its debt load when the economy is in a harsh recession and interest rates are at least 2% higher than today on 10 Year Treasury bonds.
4 Comments
All BS, nothing more.
Nobody should ever put trump and strategy in one sentence
If you believe one word out if his mouth..I got a bridge to sell you, and its cheap.
It’s just part of the psychological part of the war. It’s like trash talking before a wrestling event. The audience loves it, but it doesn’t change the facts on the ground. In the short-term, while tankers that were fully loaded 2 weeks ago and previously made their way through the Straits of Hormuz are now approaching their destinations, this talk kept prices lower than otherwise. But demand destruction must occur! There’s 10-20 million barrels of oil per day that are simply not being pumped that previously were.
Economic theory dictates that if supply is reduced, the price must rise so that the supply curve intersects the demand curve. In the longer-term (many months to years), people will find alternatives to oil such as commuting on electric skate board and bicycles and taking long-distance rail instead of airplanes.
The current peace talks have the same players on the U.S. side that existed during the U.S./Ukraine/Russia peace talks. The U.S. expressed bravado that a deal was moments away … for many weeks. The Ukraine/Russia war is still ongoing. The Iranians are just as motivated as Russia, perhaps even more so because Iran wants its current territorial integrity and its theocracy with its highly distributed command and control system is fervent. It’s their home turf. They know that eventually the U.S. and Israel will use up all of their bombs and missiles. Meanwhile, Iran can churn out bazillions of small attack drones and speed boat placed water mines. As for a land war, I take a page from the movie “Princess Bride” … “Never get into a land war in Asia” … extrapolated to any country that is far, far away from where the attacking country is located. The logistical lines between the U.S. and Iran are complex, long, and expensive. The logistical lines between Iran and Iranians is incredibly short and responsive. Iran just has to outlast the U.S.
In the U.S., inflation is ticking up (there’s a correlation of 0.27 between the increase in the price of oil and the CPI inflation rate according to the St. Louis FED … this should make the U.S. administration very, very worried), and GOP support for the war is showing serious cracks given the most recent CPAC conference. (younger GOP voters believed their leader when he said, “no more endless wars” and now they’re bitter and angry). Rural supporters are getting hit hard with sharp price increases of gasoline, diesel, and fertilizer. There is no winning in the cornfields, even with a relaxation of ethanol to 15% of gasoline content.
Given that the Iranian’s already know all of this, why would they bend the knee in peace talks? Instead, I predict that they’ll hold firm – territorial integrity, war reparations, a sincere apology, etc. They won’t give up their oil fields, Kharg, or control of the Straits of Hormuz.
The result of this asymmetric situation is that the war will likely go on until the economic pain to the U.S. is so extreme that they finally stop attacking. My guess is at least another 6-10 weeks. This implies an oil price of $200/barrel, massive shortages of prescription medications, shortages of tech (helium and LNG shortages), inflation rate that’s in excess of 15%, and serious doubts that the U.S. Government can continue to increase its debt load when the economy is in a harsh recession and interest rates are at least 2% higher than today on 10 Year Treasury bonds.