Trump giveth and Trump taketh away
While crowing about how it’s sinking the Iranian economy, the Trump Administration is literally keeping it afloat.
“In the coming days, we may unsanction the Iranian oil that’s on the water,” Bessent said on Fox Business Thursday. The US is already allowing Iranian oil to pass through the Strait of Hormuz, and that nation has about 140 million barrels afloat now, the Treasury chief said.”
While claiming that Iran was an existential threat to US national security in order to justify its war/not war/excursion, the reality is that the real existential threat is to the political future of the Trump GOP.
Yes, I realize that only 20% of the world’s oil passes through the Strait of Hormuz on a good day, and only a fraction of that is Iranian oil. But if you ask the average American, they have no idea about the impact of the war on exports of fertilizer, aluminum, helium or sulfuric acid. They only understand the price at the pump, and that’s what’s got Trump on the run.
US to unsanction Iranian oil
What makes me curious is how the stock and bond markets stay up when so much money has been removed from the system. That money is oil and gas revenue that used to go to the Gulf States. Estimates last week showed that GCC countries had lost $15 Billion after only two weeks.
Gulf Oil Producers Have Already Lost $15 Billion Since the Start of the War
Without that revenue, at some point they will have to start tapping into their sovereign wealth funds, IOW selling stock and bonds. When will that start to get reflected by the markets? Or has this been somehow manipulated to soften the effects?
Extra Russian and Iranian oil and gas revenue is too small to offset the loss and it probably won’t end up in financial markets anyway.
John:
Out of respect for your comment, I am taking a moment to answer.
I really do not know the answer. However, New Deal democrat in his latest believes the United States is heading for some rough times due to the attack on Iran and subsequent oil shortage. It does not take much with this occurrence to tip the economy. It is also hard to believe Trump does not know what is going to occur in the United States and globally from “his” action.
@John,
“What makes me curious is how the stock and bond markets stay up . . . ”
I guess you haven’t been paying attention. The DJIA *hasn’t* been staying up, but has been on a steady decline. It would probably be lower, but for gold sales that have been used to prop up investors whose bets are being called. Normally, gold would be up under these circumstances.
“US stocks and bonds fell, oil prices rose and gold had its worst week in four decades as the Iran war continues to ripple through financial markets.
“The Russell 2000, an index of smaller companies more sensitive to interest rates, was down 2.7% Friday and set to close in correction territory. A “correction” is a Wall Street term for when a stock or index falls 10% or more from its most recent peak.”
https://finance.yahoo.com/markets/stocks/articles/stocks-bonds-gold-slump-while-200354759.html
Be patient. The law of gravity hasn’t been repealed.