MUTUALLY ASSURED ECONOMIC DESTRUCTION
Large-scale tariffs are the "big red button" that closes the US capital account off to the world.
The US has had to mirror China's closed capital account to protect itself from a system so good at giving it what free markets want.
1/
Commodity prices are driven by real users of who accept/honour delivery of the underlying.
If these participants aren't present, then speculation (and maybe manipulation) can easily offset each other.
In a lot of ways this is uncharted territory from the position of inventory drawdowns and the scope of the problem.
It's also really easy to say that nobody is going to let such a huge problem actually happen. How can you argue with that?
This makes very odd assumptions about the market's forward-looking nature. If the price will rise in the next few weeks because of something that is already known (low inventory levels), then why hasn't it happened already?
If Trump were to end the blockade and walk away with no more communication with Iranians, what would happen to the Strait?
Would it naturally open, or would Iran use it to extract more concessions from the world?
@jtrader814 I don't think so. A "deal" that Iran wants includes removing presence from the ME. If he walks away it stays, and Israel can do whatever it wants. It's far more likely than a "deal" in my view
Semis wouldn't be where they are if it wasn't for Hormuz.
Nothing else is investable. Every thing is tainted by Hormuz. So capital flows to the only good news story there is. Dangerous.
There is no Iran deal.
They just keep doing fake deals every week to manage the market. So prices are lower than they should be and demand isn't being destroyed. Capital is flowing to literally the worst places it can considering the situation.
@VKMacro@tylermacro10 Again, if we were at an unknown time until end of SPR supply your theory is 100% correct. Being so close though muddies the waters
@VKMacro@tylermacro10 That is all fair and understand your argument. Yo extend your argument though what if we knew that China was less than 2 months away from ending their SPR build? This is the difference