WEBVTT - Nouriel Roubini Talks Trump and the Strait of Hormuz 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, podcasts, radio news. 0:00:07.800 --> 0:00:10.560 Norian Rapini, I've had some pain capital rise the following. 0:00:10.640 --> 0:00:13.119 If the president walks away from the war with around now, 0:00:13.400 --> 0:00:15.920 the threat to shipping in the strata for almost will remained. 0:00:15.920 --> 0:00:19.040 Despite the obvious risks, he has every reason to try 0:00:19.160 --> 0:00:23.159 to finish the job. Norielle, good morning, good morning, and 0:00:23.160 --> 0:00:25.239 good luck as well. You know, to explain the last 0:00:25.280 --> 0:00:27.600 few days, what is the status of things in your 0:00:27.640 --> 0:00:29.720 mind and where do you think this is headache? 0:00:30.480 --> 0:00:31.680 Well, there are two options. 0:00:32.280 --> 0:00:36.000 One need is to de escalate and walk away from 0:00:36.040 --> 0:00:39.080 this war and get to a ceasefire. But they're going 0:00:39.159 --> 0:00:40.879 to get a ceasfire without the deal with you run 0:00:40.960 --> 0:00:44.360 and he runs control the strait of Hormus is. 0:00:44.320 --> 0:00:47.000 Going to threaten the Gulf and the supply of oil. 0:00:47.320 --> 0:00:49.800 Your regime is actually much more radical today and it 0:00:49.920 --> 0:00:54.720 was before because Motaja Cameminison is more radical than his father. 0:00:55.080 --> 0:00:58.600 They're going to rebuild the ballistic missiles. They're going to 0:00:58.680 --> 0:01:01.960 build even more. They're going to even try to enrich 0:01:02.040 --> 0:01:04.679 the Ringum. They have to eapon grade and have a bomb. 0:01:05.160 --> 0:01:06.080 So it's a disaster. 0:01:06.280 --> 0:01:06.520 You know. 0:01:07.040 --> 0:01:09.800 Trump is already behind in the polls this war has 0:01:09.800 --> 0:01:12.399 been a bit of a failure, but now going away 0:01:12.400 --> 0:01:14.399 from it implies that's going to for Shure lose the 0:01:14.400 --> 0:01:16.720 mid terms, not just a House, but probably the Senate. 0:01:17.120 --> 0:01:18.959 So I think that, in spite of all the rhetoric 0:01:19.000 --> 0:01:23.880 about negotiations and getting a ceasefire, my more likely scenario, 0:01:24.240 --> 0:01:26.480 I give you the two thirds probabilities one in which 0:01:26.720 --> 0:01:29.360 the US has to escalate and finish the job, and 0:01:29.480 --> 0:01:33.200 escalat means take over carg Island, try to take over 0:01:33.240 --> 0:01:36.280 even the state of Hormus, try to reopen it, try 0:01:36.280 --> 0:01:39.480 to a regym collapse, and win this war and finally 0:01:39.560 --> 0:01:41.560 have a more stable Middle East. It's a very risky 0:01:41.600 --> 0:01:44.520 one because if you take that chance, you might win, 0:01:45.000 --> 0:01:47.840 but there's also a chance that you lose, and then 0:01:47.920 --> 0:01:51.560 they beat the block even more hormous, they destroy even 0:01:51.560 --> 0:01:53.840 more energy supplies of the Gulfs and then end up 0:01:54.040 --> 0:01:58.320 in nineteen seventies circulation. But my view, escalating and winning 0:01:58.640 --> 0:02:01.560 is more likely than escalator and losing. And given the 0:02:01.600 --> 0:02:05.160 politics and electual dynamics, you left to escalate. 0:02:05.520 --> 0:02:08.079 So if you escalate and you end up losing, you said, 0:02:08.080 --> 0:02:12.079 it's nineteen seventies clflation all over again, if you win, 0:02:12.360 --> 0:02:14.760 what does that look like based on the risk premia 0:02:14.880 --> 0:02:16.720 that are likely to go on a lot of physical 0:02:16.760 --> 0:02:19.960 goods and a question about staff piling in different regions 0:02:20.000 --> 0:02:22.960 as a result of multiple different supply chain shocks. 0:02:23.600 --> 0:02:25.600 Well, if you escalate, a win means that you take 0:02:25.639 --> 0:02:29.000 over carg Island, you cut off by ninety percent the 0:02:29.080 --> 0:02:32.120 revenues of the government. You continue the bombing campaign, you 0:02:32.160 --> 0:02:35.760 destroy the military assets, you take over even the nuclear 0:02:36.440 --> 0:02:41.359 kind of weapon grade uranium. You try to destroy the leadership, 0:02:41.400 --> 0:02:43.440 You try to have regime collapse, and you try to 0:02:43.520 --> 0:02:45.840 keep open as much as you can see it overmus 0:02:45.880 --> 0:02:50.040 while defending the oil energy facility of the golfis If 0:02:50.080 --> 0:02:53.120 all these things happened and you win, then actually you 0:02:53.200 --> 0:02:55.600 got rid of the regime and for a short term, 0:02:55.600 --> 0:02:58.400 maybe two three months, you have all prices about one twenty. 0:02:58.560 --> 0:03:01.000 But then you're going to go to a stable world. 0:03:01.360 --> 0:03:03.320 And by the way you run, controlling the set of 0:03:03.360 --> 0:03:06.919 Hormus is a threat to the Golf, treat to Israel 0:03:07.000 --> 0:03:08.600 is a threat to Europe, is traight to Asias, that 0:03:08.680 --> 0:03:12.280 threat to the United States. So as the Emmiratis have 0:03:12.320 --> 0:03:15.080 been saying clearly this is not acceptable and this is 0:03:15.120 --> 0:03:17.280 the same view that people all over the golf have. 0:03:17.639 --> 0:03:18.840 Is not an acceptable solution. 0:03:19.000 --> 0:03:21.799 So given what has happened, you have to try to 0:03:21.840 --> 0:03:24.800 finish the job, and finishing job means having the facto 0:03:25.000 --> 0:03:29.920 regime collapse, either formal regim collapse or informally a situation 0:03:29.960 --> 0:03:32.560 which this regime is not any more a threat to 0:03:32.800 --> 0:03:33.799 the region and to the world. 0:03:33.919 --> 0:03:36.400 All the regime has been weakened, though you give that 0:03:36.440 --> 0:03:39.880 point to the president, but absolutely collapse. There's been no 0:03:40.080 --> 0:03:44.000 evidence that we've seen defections and they're still in control. 0:03:44.280 --> 0:03:47.480 Well, the facto collapse, in my view, means that you 0:03:47.600 --> 0:03:50.240 take over carg Island, You try to reopen the stet 0:03:50.280 --> 0:03:52.440 of ormos, You try to make sure that they cannot 0:03:52.480 --> 0:03:56.160 destroy more energy facilities in the Gulf. You keep on 0:03:56.240 --> 0:03:58.960 bombing the hell out of them for weeks. They've already 0:03:58.960 --> 0:04:01.560 been eroded a lot, and every day is thousands of 0:04:01.640 --> 0:04:04.120 new targets within Isral in the United States. You may 0:04:04.160 --> 0:04:06.800 even be able to kill some of the remaining leadership 0:04:07.080 --> 0:04:10.800 and the facto. That effectively a regime collapse, it's not 0:04:10.840 --> 0:04:12.800 a region collapse. A regime that doesn't have a nuclear 0:04:12.840 --> 0:04:15.640 weapon doesn't have weapon cannot threat in the state of 0:04:15.680 --> 0:04:18.600 homost and whether it's former regime collapse or not at 0:04:18.600 --> 0:04:21.279 that point doesn't matter. But that means finishing the job. 0:04:21.680 --> 0:04:25.600 Noriah, we got about sixty seconds left. You lived in Tehran. Yeah, 0:04:25.680 --> 0:04:29.279 as a child. How personal is this for you? 0:04:28.520 --> 0:04:31.880 You know, I'm a Persian Jew, so I was in 0:04:31.920 --> 0:04:33.720 Iran last one I was three years old, I lived 0:04:33.760 --> 0:04:36.160 in Israel, grew up in Italy in the US, so 0:04:36.360 --> 0:04:38.360 I don't take it personally. But I would say that 0:04:38.440 --> 0:04:42.160 while this is an appalling regime and the current one 0:04:42.200 --> 0:04:44.440 is worse than a previous one, the threat is not 0:04:44.520 --> 0:04:46.680 just to Israel. The threat is not just to the 0:04:46.800 --> 0:04:49.720 jess country. The threat right now is not just to Europe. 0:04:49.960 --> 0:04:52.640 Europe is threatn from an economic point of view. From 0:04:52.680 --> 0:04:55.440 a military point of view, the missiles along by the 0:04:55.560 --> 0:04:58.000 luge ballist the missiles of Iran can reach anywhere of 0:04:58.040 --> 0:05:00.320 the European Union. Is a threat to the world. Is 0:05:00.400 --> 0:05:02.880 not acceptable. You can discuss whether it was the writing 0:05:03.200 --> 0:05:06.000 or not to start this war, when once you start it, 0:05:06.080 --> 0:05:08.200 if you don't finish it, it's going to be much 0:05:08.240 --> 0:05:10.040 worse than the situation previously. 0:05:10.120 --> 0:05:12.520 So given the risk you have to try. 0:05:12.240 --> 0:05:15.240 To finish the job and having effective regime collapse or 0:05:15.279 --> 0:05:18.440 the regime boxed in anyway, it's not any more attract Norea. 0:05:18.520 --> 0:05:21.160 We appreciate your time and your experience. Thanks for sharing 0:05:21.200 --> 0:05:21.560 it with us. 0:05:21.600 --> 0:05:22.040 Thank you.