The Hormuz crisis worsens

Driven by propaganda and government intervention in oil and other markets, the level of complacency in capital markets is staggering. The wake-up call will be truly dramatic.

Last week, the Iran situation degenerated into undeclared open war. The US stepped up its bombing and Iran retaliated against US bases in the region. The former is widely reported in the West’s media more than Iran’s response, but credible analysis from independent observers reveals that Iran’s retaliation is considerably more effective than we are being told in the media.

Consequently, capital markets have sailed on as if nothing material is happening. US government propaganda and media silence are creating a cliff-edge for markets which will wake up with a nasty bump. And there are indications that the situation in the Middle East is about to worsen significantly.

However you look at it, US policy against Iran has failed to achieve any objective and has created an energy, commodity, and logistics crisis which is sure to hit global economic activity hard. Oil prices have been suppressed by the US’s drawdown on strategic oil reserves which for practical purposes are now running out. There is a mounting diesel crisis, made worse by Russia banning its exports due to refining capacity being hit by Ukrainian drones.

Diesel is the lifeblood of logistics and the way things are going it will not just be a matter of price, but diesel will become unavailable. Trains and trucks will go nowhere. And we can be sure that whatever the blah-blah coming out of the White House, the administration knows that it is imperative and urgent for the US to gain control of Hormuz.

This can only mean that a ground invasion is being planned.

Moves in this direction could become obvious to sleepy markets as soon as this