Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 16
President Trump famously threatened Iran with enough immediate destruction to send them back to the "stone age" if they didn't kowtow. Iran called his bluff and he backed down at the last minute. Based on recent reports, a substantial portion of the US's munitions, both offensive (bombs, Tomahawks, etc.) and defensive (Patriots, THAD's, etc.) have been used up during the various recent attacks on Iran as well as being sent against Gaza, Lebanon and Iran after being transferred to Israel. Much of this ordinance was transferred from other parts of the world to the Mideast theatre. This has raised some concern that there is not enough left to have superiority in a major conflict with a "peer" country. If the US had actually carried out the US President's threats, it would have potentially crippled portion of the US military during a war over the next few years.
So, the US can capture Iranian tankers on the seven seas and Iran can capture commercial traffic attempting to break their closure of the Strait of Hormuz, but it boils down to whether Iran or thee US's allies can hold their financial breaths longer. In the meantime, while the US is self-sufficient in most petroleum products, their domestic prices will rise increasing inflation. The UAE and nearby countries are now asking the US Treasury (US Taxpayers) to backstop their finances.
While Iran may not hold the cards it once did, neither does the US.
Jeff
No. of Recommendations: 1
...but it boils down to whether Iran or thee US's allies can hold their financial breaths longer.
I rolled some ideas around, on the Policy board. Lets see if I can word it so I don't get flamed here.
Most of the Gulf states have sizeable sovereign wealth funds. Seems they would have plenty of hang time, by liquidating positions held by the funds, to maintain domestic spending, to keep their Proles mollified. As you noted, there are rumblings that the UAE wants a US government handout. The UAE has significant investments in certain assets, that other holders of those assets may not want to see liquidated, as their own holdings may decline in value. So, volunteer the US taxpayers to protect those privately held assets.
Iran's funding of it's "allies", according to the net sifter, runs maybe $2B/year, or about 1% of the Iranian national budget. Defunding it's "allies" would not go far in replacing the $60+B/year in oil revenue.
...while the US is self-sufficient in most petroleum products, their domestic prices will rise increasing inflation.
Wouldn't that be zero sum, as far as a family budget is concerned? People put their money in the gas tank, instead of paying the exorbitant rates at a Disney theme park, as a for instance?
Steve
No. of Recommendations: 1
I think you're wildly underestimating the percentage of families who already can't afford a Disney theme park.
No. of Recommendations: 7
I think you're wildly underestimating the percentage of families who already can't afford a Disney theme park.
Not too long ago, I read of a mom who had been saving, for years, to have enough money for the family to visit Disney World. She thought she finally had enough, until she started making reservations. Then she discovered that, if they didn't pay even more, for some sort of "express" pass, they would never see anything, because they would spend all day in line, while the people who paid the upcharge, got in. The news recently reported that park admission, at peak times, is over $200/person. Some years ago, I held DIS, but really cringed at the company's unspeakable greed. Had that discussion with people on the old Fool DIS board, several times. Seems the company figures it's pricing power is infinite, because little kids don't understand money, and parents will do anything to accommodate their spawn.
/rant
Everyone wants to take more money off each Prole. If big oil is taking more, there is less for greedy sumbees, like the "professional managers" at DIS, or restaurants, or hotels.....
Steve
