Speaker 1: All Zone Media.
Speaker 2: Welcome to it could happen here, a podcast where the
Speaker 2: economy is falling apart and do it exciting ways faster
Speaker 2: than I can write about it. I am your host,
Speaker 2: Mia Loong. Welcome to what has turned into a kind
Speaker 2: of emergency? Is the Economy Collapsing? Episode? This episode was
Speaker 2: originally supposed to be about tariffs, but while I was
Speaker 2: writing the tariff episode, a bunch of shit happens, like
Speaker 2: we invaded or run and KOs By, which is the
Speaker 2: leading Korean stock market index, had its largest single drop
Speaker 2: in its entire history, which triggered its circuit breaker. Circuit
Speaker 2: Breakers are a thing that stock markets have now where
Speaker 2: if the stock market collapses, like if it loses points
Speaker 2: too fast in a certain period of time, all trading
Speaker 2: will automatically stop for a bit, so it hits its
Speaker 2: circuit breaker. The Tie index also hits at circuit breaker.
Speaker 2: And then in the wee hours of sort of Monday
Speaker 2: morning American time, I start seeing a bunch of people
Speaker 2: posting that Coachy hit the circuit breaker, and I'm very
Speaker 2: confused because that happened on Wednesday, right, like this already happened. No, no, no, no, wrong, wrong,
Speaker 2: happened again. It's two circuit breakers in like four sessions.
Speaker 2: So this has turned into an unbelievable crisis. Yeah, so
Speaker 2: we're gonna get the tariff episode at some point, talking
Speaker 2: about the Supreme Court tariff rulings and stuff like that
Speaker 2: that will happen. There's a lot of interesting stuff there.
Speaker 2: But right now we need to answer the question is
Speaker 2: the economy about to collapse? And tendively it has been
Speaker 2: held off at least for a little bit. Now. This
Speaker 2: is being recorded early Monday afternoon on March ninth. By
Speaker 2: the time this goes out on March tenth, who the
Speaker 2: fuck knows what will have happened. But let's talk about
Speaker 2: what happened in the run up to all of this,
Speaker 2: because it's very important. So in the lead up to
Speaker 2: the open of the American markets, we had a massive
Speaker 2: spike in oil futures, like one of the largest single
Speaker 2: day spikes in oil futures ever. It looks like it's
Speaker 2: going to be the apocalypse for the markets. And the
Speaker 2: reason it looks like this is because and this is
Speaker 2: something that's genuinely astounding. So one fifth of the world's
Speaker 2: oil moves through the strait of farmos we're going to
Speaker 2: talk about this in more detail later. And obviously there
Speaker 2: is now a war, which means that you can't move
Speaker 2: oil through it, and people suddenly realized that, oh my god,
Speaker 2: this is going to raise oil prices. Now. When I
Speaker 2: was originally writing this episode in the housey in days
Speaker 2: of Friday of last week, part of this episode was
Speaker 2: about why oil prices were not spiking because they didn't
Speaker 2: spike and be upon the start of the war, right.
Speaker 2: And I was very confused about this because the explanation
Speaker 2: at the time was that people were like, Oh, I'll
Speaker 2: be fine. The US Navy can escort oil tankers through
Speaker 2: the straight ocrewer moves. No, they can't, like the narrowest
Speaker 2: part of it's twenty three miles wide. Like what are
Speaker 2: we doing here?
Speaker 1: What?
Speaker 2: Wait, Like forget drones. You can hit these oil tankers
Speaker 2: with like a fucking trebuchet. What are we doing here?
Speaker 2: What was the administration telling to oil companies? Right? And
Speaker 2: then a few days later everyone collectively realized, oh my god,
Speaker 2: we can't move oil, and yeah, no, shit, you can't
Speaker 2: move oil. Jesus Christ, like this is unbelievable stuff from
Speaker 2: the people who are in the oil markets, from the
Speaker 2: oil executives, from the golf monarchies, from all of the
Speaker 2: people planning this, Why would you think this wouldn't happen?
Speaker 2: And we're gonna get into that actually in a little bit,
Speaker 2: because there is apparently a reason why they thought this
Speaker 2: was going to happen, which is some combination of just
Speaker 2: pure lies and a full belief and some of the
Speaker 2: worst strategic planning I've ever seen in my entire life.
Speaker 2: But you know, the ability to close the straight upward
Speaker 2: news is the reason why even if you are like
Speaker 2: President Donald Trump, the kind of person who doesn't give
Speaker 2: a shit if you know your army burns a running
Speaker 2: and children to death, right, even if you don't care
Speaker 2: that you fucking bombed a fucking school, you don't fight
Speaker 2: this war because it fucks with the money. Now, in
Speaker 2: anticipation of what looked like it was going to be
Speaker 2: just a market pounding, Trump gave a phone interview with
Speaker 2: CBS's senior White House correspondent Weija Jang, who posted this
Speaker 2: on Twitter. This is her reporting of his statements. This
Speaker 2: is from Donald Trump quote. I think the war is
Speaker 2: very complete pretty much. They have no navy, no communication,
Speaker 2: they've got no Air Force. He added that the US
Speaker 2: is quote very far ahead of his initial three to
Speaker 2: four timeframe. You know, he also said that ships are
Speaker 2: moving through it now, but he's also quote thinking about
Speaker 2: taking it over, which what is officially conquering the strait
Speaker 2: up a moves instead of merely like protecting it with
Speaker 2: the American fleet assets. This is completely unhinged. And that
Speaker 2: he also said, quote they've shot everything they have to shoot,
Speaker 2: and they better not try anything cute or it's going
Speaker 2: to be the end of that country now. Okay, So
Speaker 2: the part of this right that went to the markets
Speaker 2: is that he thinks the war is over now. The
Speaker 2: part of it where he says if Iraan fights back
Speaker 2: in any way, quote, it's going to be the end
Speaker 2: of that country apparently did not hit the markets. The
Speaker 2: people running the markets are really really dumb. They think
Speaker 2: and act like herd animals. This is, I guess slightly
Speaker 2: an insult to herd animals because herd animals react that
Speaker 2: way for a reason. These people are human beings. They
Speaker 2: have the capacity for logic and reason. They have the
Speaker 2: same capacity for logic and reason that we do, and
Speaker 2: they still act like this. But this has calmed the
Speaker 2: markets down, and it's sent oil prices back down again.
Speaker 2: We're going to get into why that's kind of nonsense
Speaker 2: in a little bit, but it's also worth noting in
Speaker 2: terms of Trump saying the war is nearly over, that
Speaker 2: every single other quote Trump has said about this war
Speaker 2: has been He's in this for the long haul. He's
Speaker 2: thinking about troops on the ground, he is not going
Speaker 2: to get bored with it. He doesn't care the gas
Speaker 2: prices are going up. Someone asked his press secretary about
Speaker 2: whether he's ruled out the draft, and she said no,
Speaker 2: he hadn't, which is I mean, like they're not going
Speaker 2: to do a draft, But like, that's ridiculous, why would
Speaker 2: you say that. It's also worth noting that, so he
Speaker 2: has a two hundred and fifty year anniversary commission thing
Speaker 2: that he set up that he's very very excited about.
Speaker 2: That's like it's America's two hundred and fifty year blah
Speaker 2: blah blah blah blah. And that commissions like one of
Speaker 2: their big people was ringing the opening bella shake this morning.
Speaker 2: So you know, I suspect that there's a lot of
Speaker 2: sort of motivated reasoning here going on with Trump saying, oh,
Speaker 2: that's fine, It's gonna be fine. The war is nearly over.
Speaker 2: Do do do do do? Okay? So, I quite frankly
Speaker 2: do not believe the President when he says that the
Speaker 2: war is nearly over. I mean, I guess maybe there's
Speaker 2: a scenario where everything we're about to talk about causes
Speaker 2: a crisis that is large enough to, you know, actually
Speaker 2: set off Trump pulling out of the war under pressure
Speaker 2: from his allies in the region, which is to say,
Speaker 2: the air of monarchies. I don't know to what extent
Speaker 2: that's actually going to happen, but let's talk about what
Speaker 2: the crisis here is. So the US's war against Iran
Speaker 2: has triggered what could be the start of a full
Speaker 2: on energy crisis. The energy crisis has been postponed for
Speaker 2: one day, I guess as of again time of recording, Monday,
Speaker 2: March ninth. But this could be the start of a
Speaker 2: fall on energy crisis. And it's not just me saying this.
Speaker 2: Here is the subtitle of the Wall Street Journal's big
Speaker 2: piece on this quote. Traffic through the Strade of four
Speaker 2: mus has ground to a virtual halt, unleashing the most
Speaker 2: severe energy crisis since the nineteen seventies. And threatening the
Speaker 2: global economy. So that's not good. Now. I began this
Speaker 2: episode talking about a collapse on South Korean and high markets,
Speaker 2: and I also mention by the way that like when
Speaker 2: that collapse happened, all the other Asian markets kind of
Speaker 2: ate shit. The Chinese markets were sort of more stable
Speaker 2: for reasons we'll get you in a second, but like Japan,
Speaker 2: like the nik was down like four percent, like all
Speaker 2: of the other Asian markets kind of ate shit, right,
Speaker 2: Tawinese market. And the reason for that is well, again,
Speaker 2: as I said above, one fifth of the world's oil
Speaker 2: supply crude oil is shipped through the trade of farmuz
Speaker 2: and this is an issue for a country like South Korea,
Speaker 2: which imports almost all of its oil, you know, and
Speaker 2: whose economy, like manufacturing economy in particular, is very, very
Speaker 2: heavily dependent on oil. This is true of a lot
Speaker 2: of other countries in that region, and South Korea and
Speaker 2: Thailand and Taiwan and Japan are not countries like China,
Speaker 2: which have much of oil stockpiles and have the ability
Speaker 2: to get oiled through other ways. Now, I want to
Speaker 2: take a second to actually explain what the strait of
Speaker 2: Carmus is. So the Strait of Ramus is a straight
Speaker 2: it's like there's a little bit of water, but it's
Speaker 2: close to land. I talked to said earlier. At the
Speaker 2: narrowest part of it is twenty three miles, so it's
Speaker 2: very narrow, and it is a passage between the Persian
Speaker 2: Gulf and effectively the Indian Ocean, right and what you're
Speaker 2: out into the Indian Ocean, you can get to the
Speaker 2: rest of the world that is, you know, east of that,
Speaker 2: which is all of Asia, most of the rest of
Speaker 2: the world that's not west of view right now, she's
Speaker 2: bordering the Persian Gulf. Who are in the area who
Speaker 2: need to ship their oil out through here include Iran, Iraq,
Speaker 2: Bahrain Cutter, the UAE in Saudi Arabia. Those are a
Speaker 2: bunch of oil producing countries. You know. They are now
Speaker 2: also countries that are embroiled in this war because they
Speaker 2: are part of the American Alliance. And you can ask
Speaker 2: the very reasonable question, Okay, so if you're part of
Speaker 2: the American Alliance, why the fuck would you be like, okay,
Speaker 2: with the United States launching this attack on Iran. On
Speaker 2: a more vulgar level, you can ask the question, how
Speaker 2: the fuck was this allowed to happen. This is the money,
Speaker 2: This is the global economy that you are fucking with
Speaker 2: right now. One of the things that the Wall Street
Speaker 2: Journal talks about is that officials in the US and
Speaker 2: Israel told the Gulf States that there wouldn't be retaliation
Speaker 2: by Iran, right, that Iran wouldn't target oil facilities, they
Speaker 2: would just target American military bases. They had a whole
Speaker 2: thing about how oh were in the war with Israel.
Speaker 2: They did only target American military basis. They didn't like
Speaker 2: bomb any oil infrastructure. They were sending mister Bean memes
Speaker 2: in their group chats about how weak the Iranian retaliation
Speaker 2: was going to be. So this is not just a
Speaker 2: situation of pure, you know, motivated reasoning. We were lying
Speaker 2: to them, etc. Et cetera. Like the Americans appeared to
Speaker 2: have actually believed some of this, that Iran's retaliation was
Speaker 2: going to be weak. I've seen reports that they thought
Speaker 2: that Aram was out of drones. I don't know why
Speaker 2: you would think this baffling. Their drones are extremely cheap
Speaker 2: to produce, like they've used them, but why would you
Speaker 2: think they didn't have more? And I just want to
Speaker 2: point out, right, so their point of reference here was
Speaker 2: oh Iran showed restraint in the war with Israel. You know,
Speaker 2: this is a twelve day conflict where Israel and Iran
Speaker 2: sort of fired missiles at each other and stuff after
Speaker 2: Israel assassinated a bunch of people for doing nuclear stuff.
Speaker 2: But okay, let's look at this for a second. My
Speaker 2: brother in Christ, you killed the fucking Ayatola. This is
Speaker 2: an existential war for survival of the regime. Of course,
Speaker 2: they were going to forget your oil facilities. Are you
Speaker 2: fucking kidding me? Your goal here was regime change. You
Speaker 2: literally assassinated their fucking head of state. You literally killed him.
Speaker 2: What the fuck did you think was going to happen?
Speaker 2: Oh my god.
Speaker 3: These people are so fucking dumb and like, you know,
Speaker 3: and it's obviously not clear exactly like who knew what
Speaker 3: about this plan? But again, like it seems like the
Speaker 3: plan was put into place because they had the opportunity
Speaker 3: to to kill a tool a committee And like, okay,
Speaker 3: if that's true, and presumably the goal states would know that,
Speaker 3: why the fuck would they not expect retaliation?
Speaker 2: I expected this. I'm a podcaster. I mean, I know,
Speaker 2: I'm very smart, but like these people are these people
Speaker 2: and their advisors are running fucking like some of the
Speaker 2: most important governments in the entire world. I don't know, monarchy,
Speaker 2: bad system of governments electing Donald Trump also apparently bad
Speaker 2: system of government. You're getting just oh my god, holy fuck.
Speaker 2: These people are stupid. Oh my god. They really truly,
Speaker 2: they really truly believed that Iran was not going to
Speaker 2: pick up the weapon that it has always had, that
Speaker 2: has always been the thing. For what reason why you
Speaker 2: don't fight this fucking war even if you don't care
Speaker 2: about Iranian lives, that you're willing to spend American lives? Right?
Speaker 2: They really thought they wouldn't do it. I just, I
Speaker 2: just I can't get over this. I just oh my god.
Speaker 2: Oh I don't know. I don't know.
Speaker 4: Okay, we're gonna go to ads. I'm mad as hell.
Speaker 4: I'm not gonna take it anymore. Here's some ads.
Speaker 5: Okay, calm me down a little bit. Let's get back
Speaker 5: to the actual oil of it all. So let's talk
Speaker 5: about the quality of the oil here now. Sharp eared
Speaker 5: listeners may remember that when I talked about Venezuelan oil
Speaker 5: Battery nor Executive Disorder episode about the previous war, A
Speaker 5: couple of months ago, a sentence so unhinged. I had
Speaker 5: to go back check the date to make sure that
Speaker 5: I wasn't hallucinating. But no, it was January third, twenty
Speaker 5: twenty six, when we had our last war with a
Speaker 5: major oil producer where read in some way incapacitated or
Speaker 5: killed the head of state. By the way, we're still
Speaker 5: just like holding Maduro hostage.
Speaker 2: This is just still a thing that we're doing right now.
Speaker 2: Incredible stuff, incredible like normal government shit, bad things happening.
Speaker 2: But in that episode, which would have been the executive
Speaker 2: disorder that came out on Friday of the January ninth,
Speaker 2: I talked about how Venezuelan crude oil is not very good, right,
Speaker 2: It's extremely sour, kind of sucks. The cumbo composition is bad.
Speaker 2: The oil in the golf is not like that. This
Speaker 2: is good oil. This is one fifth of the world's
Speaker 2: crude oil supply, right, And also it is now because
Speaker 2: of cutters from that like liquified natural gas production. This
Speaker 2: is now also a shutdown of a significant portion of
Speaker 2: the world's liquified natural which is again extremely important to
Speaker 2: the economy. And also you know, one of the biggest
Speaker 2: sort of climate hoaxes in all of this, right, and
Speaker 2: I'm saying climate hoaxes here. There's been a whole push
Speaker 2: to be like, oh, we should transition to natural gas
Speaker 2: because it's cleaner than oil, and like kind of a
Speaker 2: little bit in the sense that like dunking your head
Speaker 2: into a swamp is probably cleaner than dunking your head
Speaker 2: directly into like a shitful toilet. And also it's only
Speaker 2: cleaner assuming that no methane escapes through the production process.
Speaker 2: But the thing is, methane fucking escapes during the production
Speaker 2: process of natural gas all the fucking time, and methane
Speaker 2: is like to get a sense, So we're talking about
Speaker 2: greenhouse greenhouse gases here, right, and obviously we're familiar with
Speaker 2: CO two is like the major pollutant that we that
Speaker 2: we produce. Methane is a greenhouse gas that is so
Speaker 2: fucked that it is better to light it on fire
Speaker 2: and have it burn and have it admit that CO
Speaker 2: two into the air. That is better for the environment
Speaker 2: than letting fucking methane into it. It is that fucked
Speaker 2: of a greenouse gas, right, And you know a lot
Speaker 2: of this stuff escapes and and this this is the
Speaker 2: point that I've been, you know, trying to find a
Speaker 2: thing to put in this episode. Right, one of the
Speaker 2: big things here is why are we still using oil
Speaker 2: to this extent? And you know, it has to do
Speaker 2: with sort of, I mean just just the the the
Speaker 2: utter cowardice and evil and short sighted profit motive chasing
Speaker 2: of the entire world ruling class. It has to do
Speaker 2: with specific efforts by the oil lobby in order to
Speaker 2: make sure that politics would happen like this. You know,
Speaker 2: we can talk about like the role of Pennsylvania and
Speaker 2: like fracking as like an electoral thing. We can talk
Speaker 2: about sort of the kind of Andrea's molm fossil capital
Speaker 2: thesis about the place that you want to produce things
Speaker 2: being a place that both has stable energy and also
Speaker 2: a sort of I don't know, I guess the capitalists
Speaker 2: would call it disciplined workforce, but like a workforce that's
Speaker 2: not like organized, and that's not militant, so you can
Speaker 2: exploit them. And the places where those things are true,
Speaker 2: for example, like this century largely has been China, where
Speaker 2: you know, if you try to do independent union organizing,
Speaker 2: they will arrest you. Sometimes you will get disappeared. And
Speaker 2: that also coincides with you know, they have an energy grid,
Speaker 2: and the energy grid is extremely pollution intensive. It still is,
Speaker 2: even as you know, trying to sort of renewable energy
Speaker 2: push has been happening, is still extremely carbon intensive. So okay, obviously,
Speaker 2: like we're in this nightmare because a whole bunch of
Speaker 2: people who really, really, really really desperately want us to
Speaker 2: burn the entire world alive so they can keep making money.
Speaker 2: But we're turning to the original thing before I got
Speaker 2: kissed off about people saying that natural gas is cleaner
Speaker 2: than oil. It's like, just fucking use literally any other
Speaker 2: way to generate energy that's not fucking oil or natural
Speaker 2: gas or coal or I guess nuclear too. But like I,
Speaker 2: we have other ways of generating power. We could do this.
Speaker 2: But because we haven't done this, this massive decrease in
Speaker 2: oil supply because again nothing's fucking going through the gull.
Speaker 2: There's like a couple of ships have gone through. This
Speaker 2: is causing a crisis in the global economy. I'm going
Speaker 2: to quote the Wall Street Journal. If the Strait is
Speaker 2: still closed this Friday, output in the region could follow
Speaker 2: by more than four million barrels. Kind of analystical Quoting
Speaker 2: earlier estimates, the decline could reach about nine million by
Speaker 2: the end of March, representing almost a tenth of global demands.
Speaker 2: Now it's worth noting here, right that you know, you
Speaker 2: look at a tenth of global demand and you go, oh, okay,
Speaker 2: so it's like a ten percent reduction, but it's actually
Speaker 2: way worse than that, because again, people have this tendency
Speaker 2: to look at oil as just liquid money that moves
Speaker 2: freely around the world. But that reduction in supply is
Speaker 2: not evenly distributed across the world. Right there are countries
Speaker 2: who have extraordinary needs of it who get their oil
Speaker 2: from the Middle East. This is the places like for example,
Speaker 2: Korea from Thailand, b and mar We're gonna get to
Speaker 2: you in a little bit, are places who are relying
Speaker 2: on this oil. And you know, for South Korea, it's
Speaker 2: like seventy percent of their oil comes from this region. Right,
Speaker 2: So that ten percent of global demand is not spread
Speaker 2: eatingly across the world is intensified into acute crises and
Speaker 2: very very specific economies. And this is a compounding crisis because,
Speaker 2: as the Wall Street Journal points out, like it's not
Speaker 2: just that the Strait is closed for the first time, ever, Right,
Speaker 2: this rait has never been closed. Like there was a
Speaker 2: point where the US was like escorting things through a
Speaker 2: dream the arad of rock War, but like, it's never
Speaker 2: just been closed before. It's not just that, like you know,
Speaker 2: oil and natural gas and fertilizer isn't coming out of
Speaker 2: there either, which is a real fucking problem that we'll
Speaker 2: talk about in a second. This is not just an
Speaker 2: immediate crisis of we can't move the oil that we
Speaker 2: have out there is a secondary crisis, which is that
Speaker 2: where the fuck do you put the oil? Right? If
Speaker 2: you get one thing out of listening to me talk
Speaker 2: about oil, it's that again, it's not just liquid money,
Speaker 2: it's a material substance. And the actual substance of oil
Speaker 2: and what it is and how it's produced has really
Speaker 2: wide reaching political effects, right, because when you take ausself
Speaker 2: out of the ground, the system is designed so that
Speaker 2: it is moved extremely quickly. Now, there are countries like
Speaker 2: a rock that you could in theory still produce oil, right,
Speaker 2: but there aren't enough containers to store it, so they
Speaker 2: have to shop production down. Now you could be like, okay, well,
Speaker 2: but why don't they just ship it out through the
Speaker 2: Mediterranean and the answers that the pipelines and the shipping
Speaker 2: equipment there just don't have the throughput. Oil distribution is
Speaker 2: very very flexible, and this is what makes disrupting it
Speaker 2: harder than something like coal used to be. But it
Speaker 2: is designed to a point to be sort of nodal
Speaker 2: and flexible and able to sort of deal with supply
Speaker 2: reduction crises. Right, It's not designed to deal with this,
Speaker 2: which is a full on energy crisis level, like, oh
Speaker 2: by god, we can't get oil out through this radio removes.
Speaker 2: This is a scale of issue that can't simply be
Speaker 2: solved by just moving the supply around and distributing it differently.
Speaker 2: That this is not a solution to this, and so
Speaker 2: these are having these interlocking effects right because also again
Speaker 2: these things are designed to be going constantly, and it's
Speaker 2: not just a thing where you can just turn it
Speaker 2: off and turn it back on again. It doesn't work
Speaker 2: like that. These are actual, very very complicated, had to
Speaker 2: go processes. If you turn these things off, this is
Speaker 2: again very important. If you turn these wells off, some
Speaker 2: of them will never turn back on again. So we're
Speaker 2: talking about permanent damage to the supply, right, even if tomorrow, Right,
Speaker 2: like the war is suddenly over and everything quote unquote
Speaker 2: goes back to normal. We're talking about still like permanent
Speaker 2: damage to the supply. And this is where again you
Speaker 2: can be like, well, okay, like why don't we just
Speaker 2: transition from oil? And again you can also ask like
Speaker 2: why should we give a shit about this? There's a
Speaker 2: few reasons when I say this is a compounding crisis.
Speaker 2: The Water Journal talked about this a little bit, but
Speaker 2: in every article you read about this, you will see
Speaker 2: people making the argument that, oh, it's fine, Like the
Speaker 2: US is more insulated than it was from oil prices
Speaker 2: in the seventies when it just like caused a major
Speaker 2: global crisis. And that's kind of true to a certain extent, right,
Speaker 2: the US is an oil producer, but also again, oil
Speaker 2: is not just something that's used for cars, right, and
Speaker 2: our domestic economy doesn't just rely on oil, Like you
Speaker 2: can't just you know, you can you make plastics out
Speaker 2: of oil, right, but even that, you don't just make
Speaker 2: things whole sale out of oil. Like everything you consume
Speaker 2: has other things in it, and it relies on products like,
Speaker 2: for example, a luminum and you know, things like copper
Speaker 2: and everything from basic commodities to sort of like refined
Speaker 2: goods that rely on there being oil. Right, Like again
Speaker 2: we're talking about South Korea's economy. South Korea produces. There's
Speaker 2: a whole bunch of microtrip production stuff that goes on there.
Speaker 2: You know, there's like Samsung, right, major foam manufacturer, So
Speaker 2: there's all of this very very high tech stuff too.
Speaker 2: On the sort of on the bottom end we're talking
Speaker 2: about like you can't refine the luminum anymore, know right,
Speaker 2: not that you can't like like places are shutting down
Speaker 2: their cassidy to do it because they can't get oil
Speaker 2: or they can't afford this oil. To the extent that
Speaker 2: we're seeing something called forcemith Zura and being deployed by
Speaker 2: a whole bunch of companies across the world in different
Speaker 2: sectors and forced majoram is. This is this legal concept
Speaker 2: you can apply that it's like an act of god,
Speaker 2: where for example, like I don't know, if there's like
Speaker 2: a once in a century earthquake and it like obliterates
Speaker 2: your factory, you're not legally liable to pay stuff out
Speaker 2: to people because it's an act of God, like you,
Speaker 2: you can't be legally held liable for it. And people
Speaker 2: are doing this for their aluminum production to say like, yeah, sorry,
Speaker 2: we can't meet our contracts, we can't meet our quotas
Speaker 2: that you bought from us, Like not our fault, nothing
Speaker 2: we can do about it. It's happening with oil producers.
Speaker 2: Because it's also worth noting that it's not just that
Speaker 2: the strait is closed. Iran is also hitting oil facilities.
Speaker 2: Israel is also hitting oil facilities in Iran. They hit
Speaker 2: one in Tehrun, like a massive one in Tehran that's
Speaker 2: releasing all of these fucking toxic chemicals into the error,
Speaker 2: and that has set off a massive ecological crisis because
Speaker 2: all of these people are Enormous numbers of people in
Speaker 2: Iran are going to die because of this, not just
Speaker 2: because of the bombings, but because it turns out when
Speaker 2: you fucking blow up an oil facility releases a bunch
Speaker 2: of extremely toxic chemicals into the air that caused fucking
Speaker 2: cancer and stuff like that. And so what you're dealing with, right,
Speaker 2: is this crisis in which all of these different aspects
Speaker 2: of the economy that rely on oil are impacted. Right,
Speaker 2: it's basic commodities, it's highly advanced like parts of like
Speaker 2: some MAAC conductor manufacturing. It's you know, all of these
Speaker 2: things that rely on oil are suddenly constrained, and suddenly
Speaker 2: the supply chains are fragmenting. You know, the US gets
Speaker 2: things from all over the world, but the crisis right
Speaker 2: now has mostly been hitting East Asia. Right. I talked
Speaker 2: about Korea, we talked about high Land. The thing is right,
Speaker 2: crises in East Asia do not stay in East Asia.
Speaker 2: Like the Asian mark collapse, heralded a whole bunch of
Speaker 2: other debt crises. This is the Asian market class in
Speaker 2: the nineties, right, Herald's a bunch of debt crises in
Speaker 2: places like Mexico. Heralds the collapse of the US economy
Speaker 2: and drain the dot com bubble. It causes, as say
Speaker 2: it with me, long time listeners of the show, is
Speaker 2: what causes the reverse Plaza Accords try to bail out
Speaker 2: the entire world economy, which is where the US like
Speaker 2: nuked its own manufacturing economy. By reversing Reagan's attempt to
Speaker 2: force all of the rest of the countries in the
Speaker 2: world to increase the value of their currencies relative to
Speaker 2: the dollars of the US, he compete in manufacturing better.
Speaker 2: You know, so it affects all these places, you know,
Speaker 2: and that that effect will boomerang back here. But as
Speaker 2: as is always true with American imperialism, the people suffering
Speaker 2: from this the most are not Americans. It's people in
Speaker 2: a run, right, It's people who are getting fucking blown up.
Speaker 2: It's people who are breathing in toxic chemicals as people
Speaker 2: whose lives have been destroyed and ruined by American imperialism.
Speaker 2: And beyond Ron, it's Pakistan, it's India, it's Bangladesh, it's Taiwan,
Speaker 2: it's Thailand, it's the Philippines, South Korea, it's Mia and
Speaker 2: mar Like it's Indonesia. I mean, it's Western's and Indonesia.
Speaker 2: But you know, we're talking about potential crop failures from
Speaker 2: lack of fertilizer, right, we're talking about economic ruin. We're
Speaker 2: talking about the destabilization of the world economy, or we're
Speaker 2: talking about people dying for fucking cancer when we're talking
Speaker 2: about the global economic effects of this, That's what we're
Speaker 2: really dealing with here, regardless of what happens on the
Speaker 2: American stock markets, is a whole bunch of people who
Speaker 2: never had anything to do with this fucking suffering and
Speaker 2: dying because of the fucking greed and pride and vanity
Speaker 2: and hatred of the American ruling class. Now I'm going
Speaker 2: to close on a slightly lighter note, which is people
Speaker 2: who follow the economy very closely will be talking about
Speaker 2: how post B the Korean Index had a massive bubble
Speaker 2: and that's why it collapsed, and that's why it had
Speaker 2: like two circuit breakers, and that's why it's going down
Speaker 2: so much. That's kind of true, right, But that bubble
Speaker 2: is an AI bubble. Now it is a larger and
Speaker 2: more concentrated version of the American AI bubble. But you know,
Speaker 2: the American economy is an AI bubble. And the thing
Speaker 2: about AI is that it's propped up by gas prices. Right.
Speaker 2: AI is enormously enormously fuel intensive. That's just it. It
Speaker 2: wastes a staggering, un hinged amount of energy, right, And
Speaker 2: it can only really function as long as those oil
Speaker 2: prices are very cheap and as long as natural gas
Speaker 2: prices are cheap. And it's also worth noting that, you know,
Speaker 2: these AI things are also doing a physical infrastructure, because
Speaker 2: these people are just like absolute clowns. They've been buying
Speaker 2: into the Golf monarchy's attempts to attract a tech sector there,
Speaker 2: so they've been hit. And Iran has been taking advantage
Speaker 2: of this by hitting an Amazon data centers in the
Speaker 2: Golf States. So that's another way where this can potentially
Speaker 2: just sort of toss a nuke into the global economy.
Speaker 2: Is that like the price of running all of these
Speaker 2: AI things suddenly starts to increase. And the kind of
Speaker 2: worst case scenario scenario for this, right, the one that
Speaker 2: we've been looking at in terms of what could happen
Speaker 2: to the world economy is what's been being discussed more
Speaker 2: and more, which is a version of the Crisis of
Speaker 2: the seventies, which is an economic crisis of increasing inflation
Speaker 2: and also increasing unemployment that completely reshaped the entire global economy.
Speaker 2: It's why we have neoliberalism, you know. It's a complete
Speaker 2: collapse with the social democratic system that had come before it.
Speaker 2: It changes the entire global world order. Right, the US
Speaker 2: goes off the gold standard, like things change that had
Speaker 2: never changed before. And we're going to talk about that
Speaker 2: more on the tariff episode. But that to a large then,
Speaker 2: to the ruling class is what is at stake here, right,
Speaker 2: It's whether it is worth destroying the global economy in
Speaker 2: order for Trump to kill what people are or on
Speaker 2: this has been It could Happen Here.
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