It is diesel, kerosene, and ship fuel failing to show up. “We’re talking about effectively leading to a potential seizure of global logistics.”
No diesel, no food in the shops. No petrol, no trip to the shops unless you live on top of one. “Prices are going to go far far higher. And these are not prices of non essentials. These are prices of essentials.”
Iran is the size of Western Europe, he said, with arms buried in mountains and spread across the map. You do not carpet bomb that like a small strip of coast.
An American strike, in his view, gets “at least twice as bad” in return. U.S. bases in the region are already degraded. Forces bottled up in Israel are an easy target for the same rain of missiles and drones.
Trump has midterms in early November. Netanyahu has an October election. “When politicians want to curry favor, they want to appear strong, they want to be the big man. That’s the time when they’ll attack an enemy.”
Tehran expects it. Trump hesitates. Desperation can still pull the trigger.
The quieter war is already hitting pipes. He pointed to the Saudi East West pipeline, attacked from northern Iraq by Iran aligned groups, with Houthis in the mix.Riyadh told the wires it hoped to be back in a week. Macleod doubts the damage and the next strike. Gulf treasuries are going bust in parallel. One family runs Saudi Arabia. Megaprojects in the desert burned cash.
If oil sales stop, “you have a GDP that’s sinking rapidly towards zero.” Debt to GDP near 33 percent earlier this year can scream toward 100 percent as the divisor collapses and borrowing explodes.
Kuwait, Abu Dhabi, and other Gulf states sit in the same draft.
Now both blades close at once. “On the one hand we’re going to have roaring prices which means a collapse in the purchasing power of their fiat currencies which they detach from gold. And at the same time, you’re going to have a slump in business activity which is going to lead to massive unemployment.”
Foreign bid for Treasuries can fade just as Washington has to refinance a mountain. Yields up. Debt trap. Equities priced for a world that still has cheap freight.
Markets, he argues, are still too calm about energy, debt, FX, stocks, and metal in the same week.
SilverTrade can keep it to one sentence:
If the ships do not move, the bond market does not save you. Own the metal that does not need a tanker and a Treasury auction to clear.
