Trump started his war of choice both uncertain what the goals might be, as well as being completely clueless---or couldn’t care less---about the effects the war would have on the world economy.

 

I guess that is what "America First" means. It doesn’t make the US many friends in a global and interdependent world.

 

The ramifications of the war are often hidden in convoluted supply chains, while some effects are instantly noticeable.

 

Instantly noticeable is the effect on the price of oil. Though it fluctuates according to Trump’s late-night rage Tweets and increasing insanity, crude prices are still 60% higher than when Trump started the war. Because oil is a commodity, that means despite US domestic production, the price of gas at the pump or for the transport of any good is way up from February. That is inflationary. There is a reason US Consumer Confidence recently hit an all-time low.

 

More immediate is the spot price in places like Asia, which imports most all of its crude from the Gulf. $120-$150/bbl has been paid at times over the last month.

 

Industry analysts also say Europe has about 6 weeks of Jet A remaining, so flights will be impacted if the war and Strait closure continue.

 

Less visible effects relate to other exports from the Gulf, such as helium and other gases. That impacts chip production in Taiwan and Korea and China. Some of those chips are needed in the very weapons the US is using in the war and needs to replace. Industrial gases are also used in everything from MRI machines to the production of carbonated drinks.

 

The WSJ just ran an article saying that the UK might not have enough beer to supply drinkers during the upcoming World Cup, because UK brewers lack carbon dioxide. No doubt there are other, as yet unforeseen effects that will arise from this war. The beer thing, thought not critical, is just an example. Other effects will show up in time.

 

An additional bit of fallout from the war is the fact some countries are in danger of default on both public and private sector loans. Among those are Sri Lanka and Pakistan. Pakistan is likely offering its services as a go-between because it thinks that might curry favor with Trump, and Pakistan might get what Argentina got from Trump ($40 billion). Countries heavily reliant on imported energy, or tourism, or general trade are being impacted, and that could send them over the edge into default, while others just take a big hit to GDP.

 

The world learned during the Covid pandemic what happens to prices when supply chains are disrupted. Biden had to deal with the combined fallout of Trump running up $8,400,000,000,000 (the equivalent of putting $25,000 into the hands of every American) in new debt as well as the effects of supply chain disruptions and the subsequent panic or relief buying when Covid was brought under control. MAGAs love to blame Biden, but any serious economist knows the reality, and that the Trumpian brickbats thrown at Biden are silly and indicative of willful ignorance. In contrast, the current rise in inflation can be laid squarely at the feet of the guy who imposed tariffs and started a war.

 

The US might be somewhat immune from the worst case impacts at the moment, but the longer the war continues, the greater the likelihood the US will suffer as much as the rest of the world by Trump’s war of choice. With the midterms coming in 7 months, that does not bode well for Republican chances to maintain control of either the House or Senate.

 

Unhinged and going off the rails. Time to invoke the 25th Amendment.