Ceasefire...

Last night saw an announced ceasefire between Iran and the U.S./Israel. Given that hostilities are continuing in Lebanon, it is unclear how durable it is. However, it appears that President Trump has been given the opportunity to declare victory and go home. He is aided by the fact that his base will not question whether this was a victory or not.

Assuming that commodities start flowing through the Strait of Hormuz soon, the “worst case” outlooks have been invalidated. Nevertheless, it will take time for commodities to sail, and shuttered wells to be reopened. Energy prices are going to be higher than they were pre-war for some months, which may still be enough to create recessionary conditions.

The obvious political risk is that Trump will rotate to his next military adventures after this “victory.” We also have the re-negotiation of the three-way North American “free trade” pact to contend with.

I am midway through another article on public banking, should be published either Thursday or Friday.