Trump Aggression Returns

The Trump White House has decided to ramp up its international aggression, threatening a ground war in Iran and announcing yet another wave of tariffs (particularly at Canada). Once again, these international developments could potentially overwhelm whatever domestic economic trends are in place.

Oil prices have been reacting to the latest deterioration of the situation and the limited flow of oil through the Persian Gulf, but it remains to be seen whether the market can continue to brush off what appears to be a severe supply restriction. It also is unclear for how long countries will be willing to draw down strategic reserves given that diplomatic progress appears to be non-existent.

The problem with American diplomatic efforts is that none of the decisionmakers appear to have any understanding how targeted foreigners think, or their motivations. The focus is entirely on what the United States is doing, with the assumption that foreigners will give way to American demands if they are presented aggressively enough.

I have been unable to devote much time to this week’s blog entry, due to other projects and other distractions. I have also been editing my inflation manuscript, which may just need chart updates before sending to external editing.