Global inflation will skyrocket
Analysts and commentators severely underestimate the inflationary consequences of the Iran war. The current energy stoppage is far worse than the 1973 oil embargo.
“The only surefire protection to one’s wealth is to get out of all forms of credit and into the safety of gold, which is real legal money. The Iran war and its consequences have made this decision increasingly urgent.”
As usual, general commentary plays down the consequences of today’s Hormuz crisis, which is entering a new phase with the much-heralded talks in Islamabad now stillborn. The fact of the matter is that the US and its Israeli lobby will not accept Iran’s red lines, and the war which is already lost will continue. Not only that, but the Houthis will almost certainly restrict shipping in the Red Sea or stop it altogether as the war escalates.
Admittedly, the 1973 crisis which was similarly driven by a conflict between Arab petroleum exporters and Israel led to a substantial increase of the oil price from $3 per barrel to $12. So far, the Iran war has only led to a 60% rise, but it is changing hands in Asia at more than double and doubtless there’s more to come.
The 1973 crisis led to the combined economic slump and inflation shock, peaking at 11.1% in 1974 in the US, 24.2% in the UK in 1975, 13.7% in France in 1974, and 23.2% in Japan in 1974. Why should it be different this time?
