Trump’s video game war has the world in an economic spiral

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The magical thinking continues. Donald Trump’s blockade of Iranian shipping has zero chance of forcing the military-clerical regime to capitulate before the pain becomes intolerable for the world economy and ultimately for America too.

The confidence trick of tweets on Truth Social is losing its efficacy. The oil price goes up and down like a yo-yo – it hit a four-year high of $US126 last week before plunging again on no meaningful news but is on the rise again.

The trading band of Brent crude is ratcheting ever higher as we near an accumulated one billion barrels of missing oil and exhaust the last usable reserves on land and water.

“Every month that passes, the price increases by around $US30 a barrel. We’re reaching a point where it not only destroys demand but starts to trigger economic recessions,” said Thierry Bros, the former head of energy security for France’s economy ministry.

We are heading for $US180 by mid-year but global prices could spiral much higher if Trump imposes export restrictions on US crude, diesel and jet fuel, the trio currently being sucked into world markets and driving up prices in America.

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“He’d justify it by saying, ‘NATO hasn’t been nice to me, so no more oil for NATO.’ I see a 50 per cent risk of this happening and if he does that, everything will go mad,” Bros said. You can forget about flying anywhere this summer.

Europe and large parts of Asia already have one foot in recession. The longer the Gulf stays closed, the greater the danger that this mother-of-all commodity supply shocks will set off secondary convulsions in equities and credit, morphing into something akin to the traumatic bear markets of 1973, 2000, 2008........

© Brisbane Times