The Economic Collapse

We might want to listen to what the farmers are telling us, because if they don’t grow our food we do not eat. Coming into this year, we were already facing the worst farming crisis in America in at least 50 years. Farmers all over the nation are drowning in debt, and farm bankruptcies have been soaring. In all my years, I have never seen America’s farmers so angry, and now the crisis in the Strait of Hormuz has made things much worse. Spring planting season is here and there is a global scramble for whatever supplies of nitrogen fertilizer that happen to be available. As a result, prices have skyrocketed and farmers all over the planet are facing some incredibly tough choices. (Read More...)

The real pain from the closure of the Strait of Hormuz hasn’t even hit us yet. All over the world, countries are running down their strategic energy reserves, and the last tankers that left the Persian Gulf before the war started will be arriving at their destinations this month. After that, things are going to start getting really crazy unless we get some sort of a miracle and the Strait of Hormuz is quickly reopened. The shortages that we have seen so far are nothing compared to what could be coming, and as you will see below, we are being warned that one of the largest food producing nations on the entire planet may soon be forced to ration fuel. (Read More...)

Nobody was ready for a scenario in which the Strait of Hormuz is blocked for an indefinite period of time. The Iranians think that they will eventually get what they want by holding commercial traffic through the Strait of Hormuz hostage and causing as much pain for the global economy as possible. The Trump administration believes that if Iran’s oil revenue is cut off the regime in Tehran will eventually be forced to give in to their demands. Both sides are engaged in an extremely high stakes game of chicken, and both sides are making tragic miscalculations. There is no way that the world economy is going to be able to handle a shutdown of the Strait of Hormuz that lasts for months. We will see shortages, rationing, panic, riots and market collapses. This is the greatest threat to the world economy that I have seen in my entire lifetime so far, and the truth is that this crisis is just getting started. (Read More...)

Where do we go from here? Peace talks with Iran have totally failed, and there appears to be no hope that the gaps between the demands that the U.S. is making and the demands that Iran is making can be bridged. There are several key issues that both sides are not willing to compromise on, and that is going to have very serious implications for the entire planet. In the aftermath of the failed peace talks, Iranian officials warned that the status quo in the Strait of Hormuz would continue. Needless to say, that was completely and totally unacceptable to the Trump administration, and in response President Trump has just announced a full naval blockade of the Strait. What this means is that virtually nothing will get through the Strait of Hormuz for an extended period of time. As a result, the spring planting season in the northern hemisphere will be a total disaster, and global food shortages will hit the world like a freight train about 6 to 9 months from now. (Read More...)

Iran is still holding traffic through the Strait of Hormuz hostage, and the entire world is going to suffer. Before the war, commercial traffic through the Strait of Hormuz flowed freely, and the global economy functioned normally. But even though there is a temporary ceasefire, Iran continues to maintain a stranglehold on the waterway, and they are insisting that this will continue to be the case when a permanent deal to end the war is reached. In other words, the Iranians are making it clear that this is how things are going to operate from now on, and they know that the U.S. and Europe are not eager to do what it would take militarily to reopen the Strait. Of course even if there is a military operation to reopen the Strait, it will take an extended period of time before it is safe for commercial traffic to pass through the waterway once again. Any way that you look at it, the truth is that this is going to be a complete and utter disaster for the global economy. (Read More...)

It is difficult to believe the pace at which global events are now moving. Apocalyptic threats are being thrown around recklessly and severe damage is being done to the global economic system every single day. A lot of people still seem to think that economic conditions will snap back to normal once the war ends, and that is because they don’t understand the level of destruction that has already taken place. Even if the war ends tomorrow and commercial traffic starts flowing freely through the Strait of Hormuz once again, the world won’t be getting nearly as much energy from the Middle East because dozens of oil and natural gas facilities have either been damaged or destroyed. That means that widespread rationing and global energy shortages are baked in no matter what happens next. (Read More...)

Even the mainstream media is now openly admitting that shortages are coming. But right now I am seeing so much apathy about the war in the Middle East and the global supply chain disruptions that are happening right in front of our eyes. So many people seem to be convinced that the war will end soon and things will go right back to the way that they were before. I really wish that was true. But the Iranians just told us that traffic through the Strait of Hormuz “will never return to its former state, especially for America and Israel”, and that means that this war is not going to end any time soon. As a result, the global supply chain disruptions that we are experiencing now are going to get far worse. (Read More...)

When global supply chains collapse, the pain is not felt immediately. Tankers that left their destinations before the war with Iran began are still arriving at their destinations, products that were manufactured prior to the war still fill our shelves, and we are still eating food that was produced last year. So even though global supply chains are collapsing all around us, most people don’t feel it yet. But if this war with Iran drags on for months, the pain that we will soon experience will be unbelievable. (Read More...)