in all likelihood, this is going to be a crisis for the global economy like nothing we have seen since 1929.
https://x.com/DanielLDavis1/status/2038766233093300268
No one should get any comfort from the fact that we’re not yet in the 1973 full oil crisis mode yet. That crisis began as a political decision by OPEC primarily focused on the United States for supporting Israel in the Yom Kippur war.
But this time, the US started a war and is a participant. Also radically different, this time we are attacking the oil producer itself, and the entire crisis hinges on Iranian control of Hormuz and the flow of oil for most of the region.
The 1973 crisis was solved by diplomacy the following year, and all sides realized they had more to gain by having a negotiating end, than by continuing the embargo. Eventually, also said we’re willing to be reasonable and logical, and each was willing to make some concessions.
This time, however, the US has sabotaged any chance of a negotiated settlement, because we pretended to be negotiating twice in the span of a single year, and then attacked Iran. We have therefore destroyed any confidence they may have to reach a negotiated solution now, and the more likely outcome is an extended crisis with no clear off ramps.
The war is militarily unwinnable for us, and therefore we cannot force Iran to open the straits. They are not in a mood to concede anything, from a position of strength, and thus have every incentive to maintain strict control of the flow of oil out of the Persian Gulf.
Therefore, in all likelihood, this is going to be a crisis for the global economy like nothing we have seen since 1929.
Looking at the fundamentals, it’s hard to come to any other conclusion.
We are in a crisis of our own making, and our arrogance and deception in the past, condemn us to having no good options in the present.
posted by Satish Sharma at
06:17
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