The stock market is in a secular bull market and has years to run, says one respected analyst. A major trading firm, on the other hand, warns the end of the bull run is near.
A recession looms says a Bloomberg.com headline. FED Chairman Jerome Powell says the economy is likely to continue booming for at least another three years.
CNBC says trade conflicts and U.S. tariffs won’t hurt the economy. The White House Council of Economic Advisors warns the tariffs will hurt economic growth.
Whether it’s the trade war with China, potential peace with North Korea, détente with Russia, or peace in the Middle East, the arguments fly on both sides by respectable forecasters.
It seems the only thing certain these days is uncertainty.
Heisenberg’s Uncertainty Principle sort of explains this in physics, It says that we cannot know things precisely; the best we can do is calculate probabilities.
So, while uncertain, there is a high probability rising interest rates coupled with growing budget deficits and the surging national debt will impact the economy.
While uncertain, there is a high probability that if Democrats take over the House the President will double down on his negative tweets.
And while uncertain, there is a significant probability that the Strait of Hormuz will become the flashpoint that puts the U.S. at war with Iran and maybe Russia.
Tensions between the U.S. and Iran are once again flaring in the Strait of Hormuz, the 21 mile wide strait between Oman and Iran through which about one-third of international oil shipments pass.
Last week a top Iranian admiral said Iran has taken over control of the Strait. Not so, responded Secretary of State Mike Pompeo. But Iran’s anger at the U.S. has led to conflict there in the past.
In 2012 Iran threatened to close the Strait, which led to diplomatic talks that resulted in the nuclear agreement President Trump has now trashed. There were military clashes in the Strait between the U.S. and Iran from 1980 to 1988, as Iran mined the waters to threaten shipping. This ended with a military defeat for Iran in 1988 when the U.S. decimated several Iranian warships and suffered no losses.
A retired Navy air ops commander remembers war-gaming the closure of the Strait numerous times. “When the Blue (us) forces attacked the Orange (Iran) naval assets, it always ended up involving, in those days, the USSR. A lot has changed since I was a sailor, but it is an open secret that Iran’s major patron in the world community is Russia. So far, this has played out in a seemingly controllable theatre in Syria, although half a million casualties there would not likely agree that their war is ‘controllable.’ An escalation of tensions in the Strait that results in shooting would, in my humble opinion, be disastrous.”
He is uncertain that cooler heads like Pompeo and Secretary of Defense Jim Mattis could keep Trump from jumping into an unnecessary war with Iran to divert attention from issues at home.
Remember that Mississippi National Guard and Air National Guard troops deploy regularly to support our military activities in today’s “controllable” theatres. Unnecessary shooting wars of any duration will increase their risks. Nothing uncertain about that.
» BILL CRAWFORD is a syndicate columnist from Meridian.
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