It’s another fattie of a fat pipe…every day that the Straight of Hormuz remains closed is another tick higher for future inflation. Meanwhile, all that US officials are capable of really controlling is the rigged prices they are setting for commodities and stocks.
The Imminent Inflation Shock
Let’s suppose the Iranians are about to buckle after having a few thousand deaths from the US and Israeli bombing campaign. We’ll have to ignore the fact that Iran lost an estimated 1.5 million troops during the Iran-Iraq war and never buckled.
Even if all hostilities ceased this morning at 10:00 a.m., how long would it take to smooth out the disruptions caused by the closure of the Strait of Hormuz and the infrastructure damage all around the Persian Gulf and across its many Arab states.
First up, physical oil is currently trading about $43 higher than the Fake and Gay WTI and Brent paper markets, which are clearly being manipulated by the US government:
It’s the same pattern we’ve been tracking in silver and gold for the past two decades. “Someone” decides to sell, and then sell some more in the early morning hours during the thinly traded overnight session:
Because there are so many impacts, here’s a list:
- Oil – 20% of global production impacted
- Natural Gas (LNG) – 20% of global use suddenly gone
- Urea – 33% of global production missing
- Aluminum – 9% missing
- Sulfur – 45% of global supply not available
- Sulfuric acid – ~35% gone from the scene
- Helium – 33% of global supply gone
- Ammonia – around 33% of global traded supply gone
- Phosphate fertilizers – ~20% now missing in action
In each case above, to return to baseline production would take anywhere from two weeks to 12 months depending on the commodity. The average is between 2-3 months, and that’s only after a durable peace has been achieved.
- Oil – 1 to 3 months for full production
- Natural Gas (LNG) – 1 to 2 months for full production
- Urea – 1 to 2 months for full production
- Aluminum – 6 to 12 months for full production
- Sulfur – 1 to 1.5 months for full production
- Sulfuric acid
by rector 
