A Taxing Debate

Well, Alan, well, uh, how are you, how are you holding up with, uh...

Well, we'll get to the budgeting questions, I guess, but, uh, there's still a fair bit geopolitically.

Trump to China, the Strait, will it ever open? What are you-- what's your latest hot take on all the geopolitical, uh, issues?

Um, well, Tr- I think Trump went to China hoping that they would pressure Iran into opening up the Strait of Hormuz and, um, [lip smacks] you know, who knows whether Xi Jinping tried to do that, but it certainly didn't work if he did.

And so Iran...

I mean, look, sh- some ships are getting through.

Uh, it's unclear whether they're paying Iran's toll or not.

I think, um, some of the kind of talk seems to be that they are.

Some of them are paying the toll, some are not.

Um, China is getting most of its ships through the Strait, um, so that's probably why Xi Jinping wasn't too keen on, didn't care much about, you know, forcing Iran to open it up fully.

Um, so look, I think the main consequence of the kind of attack on Iran that, um, Israel and US mounted in, uh, the end of February was, is that Iran's now got control of the Strait of Hormuz that they didn't have before, and that's kind of where we stand.

So Trump has said last night, he told reporters that, um, we might have to give them another big hit in order to make them see sense.

We'll see if that would work because it didn't work last time.

Um, and um, you know, don't forget, this is a, this is a, um, [lip smacks] a regime that didn't think twice about killing thousands of their own citizens when they protested earlier in the year, and I don't think they'll care too much about whether people get killed by American bombs.

You know, I, I just think-

It's looking-- This is looking like a quagmire, isn't it? Like just a, a standoff.

Uh, I mean, Trump started two wars, a tariff war and a Iran war, and, and he's backed off on one and stuck in a quagmire on the other.

I mean, there's st- there's a risk he, he, he goes the way of Jimmy Carter with this being his, you know, the thing that people remember him most for if...

Because people are saying that the oil reserves are falling.

Yes.

Uh, you know, the fu- the futures in December, the Brent Cr- crude futures in December have j- leapt from 70 bucks to 90 bucks.

So reserves are falling.

June, July, if the Strait remains, you know, predominantly closed, then you will see a lot more grief, demand destruction, jet fuel, fertilizer.

Like the, the impacts are going to get significantly greater if the quagmire remains in place.

That's right.