Interesting interview on Bloomberg this morning

Lots of interesting stuff presented during the Bloomberg pre-market "Surveillance" progeram this moning.  Jonathan Ferro commented on the above set of numbers, showing changes year-to-date for three crucial indicators.  Brent crude has risen 80% this year, and the yield on the 10-year treasuries has increased by 85 basis points.   So there has been an energy shock and an interest rate shock, but despite those factors, the broad market measured by the S&P 500 is up double digits.  Some discussion thereafter by Lisa Abramowicz and Annmarie Hordern re how the markets have been resilient because of demonstrably increased profits and the expectations of future growth based on potential contributions of artificial intelligence, into which segment of the market vast quantities of capital have been pouring.  None of this is "new" today but it is startling to see it combined into one graphic.

Even more interesting IMHO was a prolonged interview with Stephen Schork, a a former floor trader on the New York Mercantile Exchange and the editor of an oil market newsletter.  His commentary runs from the 17:30 mark to the 24:00 mark of the program this morning.  I'll try to have the video embed start with his comments; if it doesn't, you can mouse to that point or click this link.

It seems to me that financial markets around the world are still considering the Trump/Netanyahu "not exactly a war" situation to be a temporary matter that will resolve soon.  My crystal ball does not suggest the same.  Strategic petroleum reserves around the world have been depleted severely by the lack of timely shipments from the gulf for most of this year.  China is already resuming purchases of crude after being out of the market during the higher prices.  And now the Houthis are creating massive problems for Saudi Arabia, impairing the east-west pipeline and blocking transport east from the Red Sea, to the extent that I think the Saudis are now telling European countries that they cannot guarantee to provide oil - just when the colder weather starts to hit Europe.

This is a massive clusterfuck, and it's not getting better anytime soon.  

"The Grab" is a quite remarkable documentary

This is an actual documentary about the real world, not a fictional docudrama about an alternative earth.  The trailer is fairly explanatory.  For those who want a single sentence rather than a 2-minute watch, this is about ultra-rich people and government entites gaining control of the food and water resources of the world.  

The scary part: the maneuvers being employed worldwide are legal.  For example, someone buys large holdings of land in Arizona, then puts down wells capable of withdrawing water from the aquifer at a rate of thousands of gallons per minute, uses the water to grow a crop, and send the crop to a waterless country elsewhere.  Arizona has no law forbidding the taking and using of their aquifer.  People want cropland - they go to Africa, bribe or strong-arm a tribal elder to take land that has since forever been held in common by the peoples there, and install megafarms, displacing the indigenous inhabitants to the sprawling cities.

Not fun to watch.

Google Maps August 30

“People using Maps in the U.S. will see ‘Lake America,' those in Canada will continue to see ‘Lake Ontario,’ and those outside of the U.S. and Canada will see both names,” Google said in its statement.

I also checked the San Andreas Fault.  There were rumors he was going to call it "Biden's Fault."

Bravo to Mark Carney

I'll add some commentary later, but for now this will suffice:

This from the New York Times:

The morning after he pulled negotiators from trade talks in Washington and set off a new round of American tariffs, Prime Minister Mark Carney called the U.S. proposal “a bad deal” and said Canada was “at war” with the United States...

In a muscular [and bilingual], 22-minute speech that let Canadians — and Americans — know exactly where he stands, Mr. Carney said that Canada was under attack by President Trump’s punishing tariffs.

“You’re at war when you’re attacked, and we got attacked,” Mr. Carney said.

But unlike his electrifying speech at Davos that spoke of a rupture in the world order, Mr. Carney explicitly named the United States as an aggressor and a threat to Canada and the global economy.

“We’ve recognized from the start that America has changed,” he said in an address to Canadians on Saturday. “We recognize that sometimes, its signature is written in pencil.”Among other things, Mr. Carney said that American negotiators pushed to roll back Canada’s efforts to promote Canadian and French language content in online streaming services, subsidies for industries like publishing and film production and even mandatory labeling in French, an official language in Canada, as well as English on packaging...  [note that Carney's speech was bilingual, alternating between English and French]

As he did on Friday night, Mr. Carney suggested on Saturday that Canada would now double down on its strategy of disengaging from the U.S. economy, expanding trade with other countries and diversifying Canada’s economy.

“Last spring, I warned that America is trying to break us so that they can own us and I promised: ‘That will never, ever happen,’” Mr. Carney said. “We are keeping that promise. Canada is becoming stronger and less dependent on America.”

There will be lots more analysis and commentary available tomorrow, and especially Monday when the financial markets start responding... 

This from the I Fucking Love Australia Facebook thread:

Twelve hours after telling his negotiators to come home, Mark Carney stood up in Ottawa and did something no one in Washington saw coming, because none of the bastards own a library card.

He quoted a sixty-year-old slogan. Seven polite little words: "We are masters in our own home."  Sounds like a tea towel, right? Mate, that phrase is dynamite with a bilingual fuse. It's the battle cry Quebec used in 1962, right before it seized the fucking power stations. And the bloke who just aimed it at Washington owns the grid half of America's northern border runs on, two-thirds of America's imported crude, the uranium, and the fertiliser.

Trump thinks he's in a trade war. He's actually standing in a house where the other bloke holds every lever, and on Saturday the other bloke smiled and mentioned it. In two languages. With the pulse of a man ordering a flat white.

The full breakdown is live: the hidden threat in the speech nobody clocked, the energy numbers that should terrify the White House, the Doug Ford playbook that started it all, and the question Canberra's too gutless to answer.

King Carney doesn't forecast the weather anymore. He makes it.

And this from the same source slightly earlier:

At two minutes to midnight, Mark Carney looked at the most powerful man on Earth, checked his watch, and told his negotiators to get on the plane. Fuck this wanker, we're going home.

And half the world's press still thinks he stormed out. He didn't storm anywhere, mate. The bloke ran two central banks through two catastrophes, and he's just done the coldest piece of arithmetic in modern trade history: the midterms are TEN WEEKS away, Trump's approval is circling the drain, and every deal signed with that man is worth the paper, the frame, and fuck-all else. Ask CUSMA. He tariffed his own trophy deal over BOURBON SHELF PLACEMENT.

So Carney walked, matched him dollar for bloody dollar, and left the demolition to American voters. Why sign anything with a bloke whose signature depreciates faster than a secondhand jet ski?

The full evisceration is live now: the Depression-era law he dug out of the shed, the whiskey ultimatum you won't believe is real, and why an empty calendar is the most aggressive document in world politics right now.

King Carney reads the clock. And the clock says November.

I wasn't going to post this one on the blog because I thought it was too crude, but tonight I'm mad as hell.

This is what is keeping crude oil and gas/diesel prices from skyrocketing - Updated

When Trump and Netanyahu started this war, much of the attention in the business world was focused on the price of crude oil (Brent, WTI) and the derivative products (gasoline, diesel, fertilizer, plastics).  When the Strait was closed and then reopened via the MOU, prices fluctuated accordingly, but what has been of most interest to me is that the market prices of those materials have not continued to rise as much as might be expected.

Everyone who tracks the news knows that the U.S. and other countries are tapping their "strategic petroleum reserves" stored underground (some small countries don't have such and are suffering disproportionately).  

The second group of factors that mitigated price rises was increased use of alternative energy, restrictions on energy usage, increased production in non-Gulf nations etc.

But from near the beginning, I heard analysts on Bloomberg say that China was modifying its policy on oil.  China apparently has immense reserves of stored oil, but were still net oil importers (see chart above for 2016-2026).  After the war started, they have markedly decreased their importation of oil, apparently using some of their reserves and altering domestic policies toward conservation.

Why?  In part, it's basic economic good sense when the Brent price goes from 50 to 90 to cut purchases.  But this is a super-smart country with well-thought-out international policies.  They also have a sort of alliance with Iran, which I believe was one of their sources for imported oil in recent years.   By cutting their daily imports from 12 million to 7 million they buffer the world's loss of I think 5 million a day that was passing Hormuz.

Is it in their best interest (remembering that they think years/decades in advance, not election cycles) to keep the oil price rise modest so as not to harm the economies of the world they export to?  Or do they want to keep the price down because a huge price rise might cause the U.S. to stop the war and they would rather the war go on longer so the U.S. depletes its own reserves and the continuation of the war leads to more and more destruction of the U.S. military capabilities?  I suspect the latter, because I think there is way more erosion of U.S. capabilites in the Gulf than Washington has (or will) admit.

Also note that Iran wants to charge fees for transit of Hormuz and that those fees would be paid in Chinese yuan, not U.S. dollars.  (a relevant WSJ article is behind a paywall)  This was is weakening the U.S. military capabilities, depleting strategic petroleum reserves, ruining the U.S. diplomatic status around the world, and causing unhappiness and political dissent within the U.S.  China has a lot of control over how this will unfold.  Stay tuned.

Image via Axios.

Addendum August 8: The Atlantic (online) has posted a detailed discussion of this topic, basically confirming what I speculated above.  Herewith some brief excerpts:

Before the war, China, by far the world’s largest oil importer, was buying more barrels than the entire European continent and almost twice as much as the second-largest importer, the United States. Then, weeks after the conflict broke out, the country abruptly slashed its oil purchases, eventually cutting them by half compared with prewar levels. That appears to be why global prices have risen so much less than experts predicted. The shift also poses mysteries of its own. No one outside China knows how exactly the country has managed to meet its energy needs while forgoing imports, nor why its leaders chose this course. And no one knows how long the situation can last...

The amount of oil that China stopped buying, about 5 million barrels a day, represented about a quarter of what was lost when the strait closed and is equivalent to the entirety of imports to India, the world’s third-largest importer. This significant and unexpected drop in Chinese demand freed up those barrels to go elsewhere, preventing the kind of shortage that might have led to truly catastrophic prices...

A more realistic possibility is that China has been tapping into its immense oil reserves, which it has spent years accumulating in the case of a crisis. But the giant outdoor tanks where China keeps much of its known oil reserves have remained full since the war began. This fact has given rise to yet another theory: On top of its known reserves, perhaps China has been stashing oil, as well as refined diesel and gasoline, in secret facilities, which it is now using to keep its economy running. “I sometimes feel like I should put on a tinfoil hat when I start talking about this,” Johnston said. “We have almost no evidence of it. And yet, it’s really the only explanation that makes any sense.”...

Whatever China’s exact motivations, the country has demonstrated yet another source of power it can wield on the global stage. As long as the Iran war continues, China’s leverage over oil prices gives it the ability to inflict immense pain on American consumers, and really the entire world, at a moment’s notice. Even if China doesn’t choose to do so, the fact that it can might be enough to give the country even more sway over international affairs. “For the last 50-plus years, whenever there was an oil shock, the first thing the U.S. president did was call Riyadh to try to persuade the Saudis to help out,” Jason Bordoff, the founding director of Columbia’s Center on Global Energy Policy, told me. “Maybe the place everyone needs to call now is Beijing. That’s a very powerful position to be in.”

I have said (or implied) in my writings for TYWKIWDBI that if the last century was an "American century" of global power, the next one will be a Chinese one, based both on "soft power" (exemplified above) and now I believe also in terms of military power.  

Addendum:  More data on August 17 -

Comprehensive longread on war negotiations

An "explainer" column today in Al Jazeera provides detailed insight into the ongoing negotiations.  I won't excerpt here; those interested can browse the various sections at the link.

This would be a MAJOR escalation in the war

When you see the words Bab al Mandab Strait in mainstream news sources, pay close attention.  This is the southern exit from the Red Sea and a major route for Saudi Arabia to export its oil.  If the Houthis effectively close it, expect the price of Brent and WTI to reach new highs quickly.

The world economy better pray that the U.S. generals can convince Trump not to escalate the bombing of Iran to civilian sites.

Erasing Gaza

A series of before-and-after satellite photos document the physical destruction going on in Gaza.  At the link are a set of photos with sliders that allow direct comparison of the baseline with the current condition.  What is shown is not collateral destruction from errant munitions, but a deliberate process to physically erase any evidence of Palestinian history and culture - including the cemeteries...

The Sheikh Mohammed cemetery in the Maan area of Khan Younis has been wiped from the map, and replaced by the tents and armoured vehicles of an Israeli military outpost, according to recently updated satellite imagery added to Google Earth...

The high-resolution pictures, captured on February 25, 2026, expose a landscape where entire neighbourhoods have been reduced to ash, and the surviving population is squeezed into suffocating encampments that spill onto the beaches of the Mediterranean Sea...

For Palestinians, the updated maps provide a devastating, wide-angle view of an ongoing genocide that has killed nearly 73,000 people.

According to the Euro-Med Human Rights Monitor, Israeli forces have fully or partially destroyed 94 percent of Gaza’s cemeteries, transforming places of memory into military barracks...

US President Joe Biden initially drew a ‘red line’ over the invasion of Rafah in early 2024, but Israel went ahead with its brutal operation. Israel faced no consequences for its actions in Rafah, which has largely been flattened...

The methodical destruction extends to the territory’s educational foundation. UNICEF says more than 97 percent of schools have been damaged or destroyed, leaving 658,000 children without formal learning for more than two years. Universities have either been blown up or transformed into displacement shelters...

The Islamic University of Gaza (IUG), which catered to over 20,000 students, and Al-Azhar University, which enrolled more than 16,000 students, have been razed. Both major campuses, along with Al-Israa University in the south, were completely levelled through controlled military detonations...

In the Shakoush area, Israeli bulldozers have razed greenhouses and confiscated the topsoil, directly exacerbating the man-made starvation of the population...

"Confiscating the topsoil" FFS.  This is ongoing genocide, and no Western countries are doing anything about it.  The destruction of homes and olive groves is what Rachel Corrie died protesting in 2003, when she was run over by a bulldozer while wearing a high-visibility orange vest.  And the U.S. continues to fund the criminal activities of Netanyahu, including his use of white phosphorus in Lebanon.  And here is the New York Times documentation of the use of white phosphorus in Lebanon.

Addendum: A longread detailed article about the repeated violations of the Gaza "ceasefire" is here.

Israel violated the ceasefire agreement at least 3,005 times from October 10, 2025 to May 27, 2026, through the continuation of attacks by air, artillery and direct shootings, the Government Media Office in Gaza reports...From October 10, 2025 to April 14, 2026, the office said Israel shot at civilians 921 times, raided residential areas beyond the “yellow line” 97 times, bombed and shelled Gaza 1109 times, and demolished people’s properties on 273 occasions...

According to an analysis by Al Jazeera, Israel has attacked Gaza on 211 out of the past 235 days of the ceasefire, meaning there were only 24 days during which no violent attacks, deaths or injuries were reported.

Despite continuing attacks, the US insists that the “ceasefire” is still holding.

World Central Kitchen in Gaza

Regular readers here may remember that World Central Kitchen is far and away my favorite charity.  I believe my last report on their work in Gaza was two years ago.  Because I'm a regular contributor, today I received an email update, which I'll share:

WCK is still cooking in Gaza—and we want to be direct with you about what is changing and why. Due to significant financial pressure, including rising food and fuel costs driven by regional conflict, WCK is making the difficult decision to reduce the scale of our meal distribution in Gaza. This decision reflects financial reality, not a reduction in need. Our teams remain on the ground, delivering hundreds of thousands of hot meals every day.

Since the start of the conflict in 2023, WCK has invested more than half a billion dollars feeding the people of Gaza—surging to one million hot meals a day. But no single NGO, funded primarily by small private donors, can sustain that level of output indefinitely. We specialize in emergency food relief, not long-term food security—and the long-term responsibility of feeding Gaza cannot rest on our shoulders alone. The people of Gaza have lost their homes and their economy. Governments, institutions, and international partners must commit the sustained, secure funding this crisis demands.

We know you have questions—here are answers to what we are being asked more frequently.

They note in the email that the upcoming wildfire season is expected to break records.  It's shameful to consider how much $ is currently being expended on weaponry and reparations to insurrectionists when basic human needs like this go unmet. 

I don't know if all of this is true...

... but I have heard that parts of it are true, and if most or all of it is true, it's tremendously interesting and important.

The antithesis of "diplomacy"

If anyone sees a way to a "negotiated settlement" based on this rant, please let me know.  This is a rant by a mentally ill man facing defeat and unable to accept such.  My only hope is that his hand-picked military brass who replaced the seasoned veterans can find a way to sweet-talk him out of putting more U.S. troops at risk.

Addendum:  Live coverage from Al Jazeera English at 1300 CDT (~10 pm in Qatar) indicates that Iran and the IRGC are expecting a resumption of active hostilities targeting Iranian government and military facilities very soon.  Lots of coverage there also of the Ebola outbreak in Africa; much less attention to that in Western news media.

Update:  A couple hours later Trump posted this message on Truth Social, indicating a postponement of aggressive action, which he describes as being in response to pleas from Gulf leaders (not because his military is advising him against it).

So perhaps less risk fot hot war (unless Netanyahu opts to intervene), but no obvious way forward to resolution, which means increasing pressure on world oil prices.

Addendum May 27:

After another week of negotiations, during which "great progress" was made, Trump proceeded to post this antithesis of negotiating:

Majestic irony indeed

For background reading on the meeting of King Charles with Trump.

Iran's enriched uranium

Embedded above is a screencap from an impressive New York Times article explaining how Iran accumulated 11 tons of nuclear material.  

The graph depicts uranium at various "grades" from low-level (grayish) to enriched (darker) and weapons grade (blackish).

"As the stockpile kept growing, the Obama administration began talks to curb it.  In 2015, Iran and six nations led by the United States reached an accord that limited the purity of its enriched uranium to 3.67 percent and the size of its stockpile until 2030... Iran lacked a single bomb’s worth of uranium in 2018, when Mr. Trump withdrew the United States from the pact and reimposed a series of tough economic sanctions."

Continue reading at the link for more information.  

Breaking news

Screencap this afternoon from the France 24 site.  Putin's ally Orban loses despite Trump's support:

“My Administration stands ready to use the full Economic Might of the United States to strengthen Hungary’s Economy, as we have done for our Great Allies in the past, if Prime Minister Viktor Orbán and the Hungarian People ever need it,” Trump wrote in a post on Truth Social ahead of Sunday’s vote.

“We are excited to invest in the future Prosperity that will be generated by Orbán’s continued Leadership!” said Trump, who has endorsed Orbán multiple times during the campaign.

The U.S. has always influenced foreign elections - but usually not so overtly.  Or so ineffectually.

And "Magyar" is such a wonderful patronym for a Hungarian leader.  Apparently it is a common surname as well as the ethnonym for the people.

American negotiators arrive in Pakistan for peace talks

I can't imagine anyone had serious hopes that peace could be negotiated during the recent summit in Pakistan, when the U.S. positions include "complete surrender" and the Iranians insist on control of Hormuz plus compensation for damages from the bombing campaign.  American media reported hopfully that "talks were underway" while in fact both sides were using the pause to reload their weaponry.

The AI image and the text below come from an April 11 Substack entitled "I Fucking Love Australia."

The Surrender Summit: Trump Sends His Son-in-Law to Lose a War

JD Vance flew to Pakistan to negotiate with a civilisation that’s been doing geopolitics 

since before white people invented trousers.

"Vance brought his wife.

Not a deputy secretary. Not a general. Not even a halfway competent mid-level State Department lifer who at least knows what the Strait of Hormuz is on a map. He brought Usha. His wife. To a war negotiation. The most consequential diplomatic moment since the end of the Cold War and JD thought, yeah, I’ll make a long weekend of it, bring the missus, see Pakistan...

And then there’s Jared Kushner. Jared fucking Kushner. A man whose entire qualification for any of this is that he married into the right family, which, by the way, is also his business model, his foreign policy experience, and apparently now his military strategy. Jared has the energy of a guy who’s never been told no in his life because everyone around him was either paid not to or too scared to. He walked into the Middle East peace process last time and achieved absolutely nothing except making himself several hundred million dollars richer. So naturally Donald called him again...

And somewhere in a Mar-a-Lago dining room, the aluminium siding salesman with the IQ of a concussed house brick is posting about tankers on Truth Social, absolutely convinced he’s winning, because no one in his orbit is allowed to tell him otherwise, and the two blokes he sent to Pakistan to save his legacy couldn’t find the Strait of Hormuz with both hands and a geopolitical GPS..."

More at the link. 

An existential threat to Pacific island micronations

Yesterday TYWKIWDBI received a comment from reader Jim, who was addressing points relevant to the recent post about international mail disruptions.   His focus was on the island nation of Niue, and his point was that mail disruption is only one aspect of a huge threat to Pacific island nations resulting from large increases in the costs of fuel oil.

Amongst the pacific islands, there are big ones with multiple options (standouts are Fiji/Nadi, Tonga/Nuku’alofa, Solomon Islands/Honiara, Samoa/Faleolo, New Caledonia/Noumea, and of course Hawaii being of least concern), then there are the littler ones with maybe one or two airline choices like the Marianas, Marshall Islands, Cook Islands, Palau, Kiribati (which isn’t tiny by population, but was never well-covered logistically), Micronesia, etc…. 

 

Then you have the tiny ones that were almost always “too hard basket” jobs. Some were harder than others, occasionally I could get a rate to/from one of these, but I would sometimes have to offer to get a client service to/from a location nearish their target, then advise them to contact charter services to meet up with where I could get them. Examples were Pitcairn (sea only), Nauru, Rapanui/Easter Island, Niue, Tokelau and Tuvalu, and possibly some others I’m forgetting. 

 

If the Middle East nonsense is to continue for a long time, I fear for the food security of many of the inhabitants of the islands, especially those of Kiribati and Nauru, which IIRC, have absolutely nowhere near the ability to feed their local populations without regular food imports. Niue may be in less immediate danger of food insecurity simply by virtue of having much lower population density. If things deteriorate, I foresee humanitarian relief missions to the islands being undertaken by AU+NZ (and perhaps Chile for Rapanui), and (the cynic in me compels me to add) almost certainly China, who for some time have been trying to curry favour amongst the pacific nations, most notably the Solomons of late.

 

This is perhaps pessimistic of me, but if the situation continues to deteriorate, we may see large scale de-population of some of the less food-secure and economically vulnerable pacific islands, especially those more vulnerable to sea level rises, for whom the writing is somewhat on the wall already. A geopolitical shove added to the already keenly-felt climate-change push might be enough to convince many to head for higher ground, both literally and figuratively.

(boldface added by me for those who speed-read TYWKIWDBI).  I totally agree that China is likely to step in.  As the U.S. loses its credibility around the world, China is able and willing to step in to be the new world leader.

Here's that link from the Center for Strategic and International Studies, if the one in the embed isn't clickable.

Addendum:  See the informed observations by Jim in the Comments section below.

Government debt vs. GDP

The embedded image is harvested from Facebook, but I will vouch for the economic credentials of Mohamed El-Erian, whose opinions on world economics I have valued for years.

Posted because the economic consequences of the U.S./Israel war on Iran are going to be extreme.  There is almost no foreseeable outcome that will not adversely affect most of the major economies of the world.

And while I'm on Facebook, I'll add these other items -

Assessing geopolitical turmoil

The embed is a screencap from Facebook, which I haven't tracked to the primary source, but I quite agree with the expressed sentiment.

I am disappointed (but not surprised) that major news outlets tend to report on what Trump is saying without adding any nuance or interpretation.  Perhaps that is their perceived role, or perhaps they are under pressure not to openly criticize this authoritarian president.

Personally, I have been monitoring Al Jazeera every night.  They have a You Tube channel that broadcasts live in English 24/7.  Whether you hear live news or recordings depends on your global time lag (mine is 9 hours).  The broadcasts originate from Qatar and include interviews with Middle Eastern and European leaders or their representatives.

What I hear just from brief visits to that site is quite different from what I hear on American sites.  This morning the equity, bond, and oil markets are reacting positively to reports that U.S. and Iranian representatives "are talking" and that "there are hopes for a settlement."

The underlying truth (I think) is that the Trump administration has issued a set of 15 guidelines (no nuclear weapons capability etc).  Trump is expecting "unconditional surrender" including control of Iranian oil production.  Iranian leaders have issued their "talking points" which include "sovereignty over their nation and the Gulf of Hormuz" and "reparations for damages done by the U.S. and Israel."

Does anyone actually think there is serious talking going on.  Nonsense.  Everyone knows that this apparent cease-fire is nothing more than an opportunity for both sides to reload.  The U.S. has elite ground forces en route to the conflict area:

For their part, the Iranians are at least talking locally about unceasing resistance:

Trump and Hegseth seem to feel they can bomb Iran into submission - a sentiment that scarily echoes what I remember from coming of age during the Vietnam war, when the goal was to "bomb them into the Stone Age."  Iran is not Vietnam.  Consider just the size:

Now consider Iran's leverage in the Gulf region.  The obvious first leverage was control of the Strait of Hormuz.  Trump has said "we don't care, we don't need oil from there, we have our own", which is true and quite irrelevant.  Here is the outflow from the Gulf:

Very little oil goes to the U.S.  But India is already hurting from gasoline shortages.  China less so because they have the world's largest strategic reserves of oil stored underground.  But the rest of Asia is suffering, and Europe is worried.  

The other things that come out of the Stait of Hormuz include the fertilizers that much of the world depends on for agriculture.  Trump's cavalier assessment that he doesn't care about Hormuz closing ignores U.S. farmers, who may be pushed to insolvency because of fertilizer costs.

Liquid helium comes out of the Gulf.  I think some MRI centers in the Americas and Europe have already indicated that they will decrease the availability of MRIs.  And I think liquid helium is also critical for some computer chip manufacturing.

Note that Iran has been attacking neighboring Gulf states, in part because those states have supported the U.S. with air bases, but also because they can do immense damage to the regional economies.  The next potential targets:  desalination plants.

Image cropped for size from the original in The Guardian.

Most Gulf countries only have water reserves to last about a week. Analysts have said that if any of these plants are struck and capacity taken out, the impact would be quick and severe and it could wipe out water to major cities in a matter of days.

Power plants need desalinated water for cooling, so electricity supply would be affected. It would particularly affect healthcare and the running of hospitals, and would likely have to cause industries and businesses to shut down for as long as there was a water shortage.

Water rationing would likely have to be introduced. There are concerns that this could lead to mass panic and civil unrest.

You want to talk about "bombing someone into the Stone Age"?  

Trump undoubtedly feels "the pressure of the midterms" because Republicans have been losing local elections all around the country, including Texas and yesterday in the district that includes his precious Mar-a-Lago. He will certainly be getting panicy calls from Gulf emirates who worry that their entire economies may be destroyed by a few well-placed ballistic missiles.  

Enough gloom and doom for right now.  More later on the potential for a world-wide recession, because despite Trump's assertion that things will quickly revert back to normal, it's more likely that "things" are going to continue to get worse...

Addendum Wednesday evening:

(Excerpted from Facebook, so no guarantee that it is true.)

Kharg Island attacked.

For years I have had deep respect for Mohamed El-Erian's opinions on world economics.  For those interested in the implications of the current gulf war, his pronouncements are worth heeding.  I would also recommend monitoring Al Jazeera English via YouTube or listening in to Bloomberg this coming Sunday night to get an advance indication of how severely world crude oil prices are going to spike Monday.  The carry-on effect will be a major hit to U.S. equity markets.  And the world economy.

I've seen reports on Al Jazeera this morning that Iran has already countered the U.S. attack on Kharg Island with an attack at Fujairah, which is the terminus for a pipeline bypassing the Gulf of Hormuz.  That alone would be enough to spike oil prices as soon as the markets open.

The CIA confirms it overthrew Iran's Prime Minister, Mohammed Mosaddegh

Reposted in 2026 from 2016 to remind readers once again of what can happen when the United States (and Israel) decide to institute "regime change" in another country.  For the TLDRs - Mossadegh was democratically elected by Iranians, overthrown by the CIA in order to gain control of Iran's oil, replaced by the Shah, who unleashed the torturers of SAVAK on the people of Iran, which eventually led to their rebellion and the institution of their current authoritarian theocratic anti-Western system.

This was FAFO writ large on an international scale.

For those hopefully few who have doubts about whether the U.S. interferes in other countries to change regimes, I would recommend browsing just the paragraph headings in chapter 17 of William Blum's Rogue State.

[Reposted in 2016 from 2013 to serve as a counterpoint to all the recent hullabaloo about the possibility/likelihood that Russia influenced the most recent U.S. presidential election.]

Excerpts from an article at the National Security Archive:

Washington, D.C., August 19, 2013 – Marking the sixtieth anniversary of the overthrow of Iranian Prime Minister Mohammad Mosaddeq, the National Security Archive is today posting recently declassified CIA documents on the United States' role in the controversial operation. American and British involvement in Mosaddeq's ouster has long been public knowledge, but today's posting includes what is believed to be the CIA's first formal acknowledgement that the agency helped to plan and execute the coup.

The explicit reference to the CIA's role appears in a copy of an internal history, The Battle for Iran, dating from the mid-1970s. The agency released a heavily excised version of the account in 1981 in response to an ACLU lawsuit, but it blacked out all references to TPAJAX, the code name for the U.S.-led operation. Those references appear in the latest release. Additional CIA materials posted today include working files from Kermit Roosevelt, the senior CIA officer on the ground in Iran during the coup. They provide new specifics as well as insights into the intelligence agency's actions before and after the operation...

The issue is more than academic. Political partisans on all sides, including the Iranian government, regularly invoke the coup to argue whether Iran or foreign powers are primarily responsible for the country's historical trajectory, whether the United States can be trusted to respect Iran's sovereignty, or whether Washington needs to apologize for its prior interference before better relations can occur...

While the National Security Archive applauds the CIA's decision to make these materials available, today's posting shows clearly that these materials could have been safely declassified many years ago without risk of damage to the national security...

But all 21 of the CIA items posted today (in addition to 14 previously unpublished British documents — see Sidebar), reinforce the conclusion that the United States, and the CIA in particular, devoted extensive resources and high-level policy attention toward bringing about Mosaddeq's overthrow, and smoothing over the aftermath.  

The aftermath included the return to power of Mohammad Reza Pahlavi ("The Shah of Iran"), and the establishment of the SAVAK (secret police), whose torture methods included "electric shock, whipping, beating, inserting broken glass and pouring boiling water into the rectum, tying weights to the testicles, and the extraction of teeth and nails."

One can't emphasize enough that Mosaddeq had been democratically-elected by the people of Iran.  The U.S. and Britain had him overthrown in order to gain access to Iran's oil resources.

Does anyone still wonder why many Iranians distrust and/or dislike the U.S.?

Additional details in the relevant Wikipedia entry.  Via Reddit, where other relevant coups are listed.

Addendum:  An article this week in Salon emphasizes the same point -

None of this gives Vladimir Putin a pass. We don’t see enough reporting on the repression of religion and the media inside Putin’s Russia. But failing to acknowledge our own dark side when it comes to internal and external covert operations to twist political outcomes makes us look hypocritical in a world where so many nations have been victimized by our covert machinations, often with deadly consequences.

Evidently, this is the real-world meaning of “American exceptionalism,” where only we are exempt from the requirement to respect other nations’ sovereignty. There’s no better example of this than the 2014 Edward Snowden revelations that the U.S. had spied on many other countries, even allies like Germany, France, Italy and Japan...

For decades both Democrats and Republicans working for Washington law firms and global crisis management outfits like Hill & Knowlton or Black Manafort & Stone have helped the world’s most brutal and oppressive regimes hang on to power and marginalize their opponents, all while continuing to get U.S. military aid...

The U.S. has manipulated the internal domestic politics of other countries with escapades in Africa, Asia, Central and South America, the Caribbean and even in Europe...

We rarely get a glimpse behind that black curtain unless an Edward Snowden or a Daniel Ellsberg puts everything on the line to pull it back for us. None of that excuses the Russian attempt to meddle in an American election, but we should not feign innocence Trying to shape world events and our own politics through fake news, disinformation, deceit and deception are as American as apple pie.