Latest / The Fourcast / ‘American weakness EXPOSED’: can the US recover from Trump’s Iran war?

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‘American weakness EXPOSED’: can the US recover from Trump’s Iran war? · The Fourcast

0:00
I actually think he would love to chicken out at this moment,
0:02
but he's unable to do so. For Trump, it's a war of choice,
0:05
trying to fight it as far as possible, bloodlessly from the
0:09
American point of view, he's exposed that American weakness.
0:14
And you know, China will be watching.
0:16
The Chinese timetable was widely expected to be 2027 for some
0:20
source of invasion. The pressure against this,
0:23
obviously, is the American security guarantee.
0:25
The American security guarantee just doesn't look that credible
0:28
anymore. Hello and welcome to the
0:33
forecast indicators with me, Christian Guru Murphy.
0:36
And I'm Mark Urban. And on the forecast indicators,
0:40
we try to home in on the really significant things that analysts
0:45
might be looking at. We separate the wheat from the
0:47
chaff, the signal from the noise, and try to see which way
0:50
the story's going. Again this week we are focusing
0:53
of course on Iran, where the American blockade is stopping
0:58
things going out and the in to Iran and the Iranian blockade is
1:03
stopping most of everything else.
1:06
Is it a stalemate? The talks in Pakistan, the
1:09
second round of talks don't seem to be going anywhere.
1:12
So are we heading towards some sort of fizzling out?
1:16
The ceasefire certainly is indefinite.
1:19
Now Mark, what do you think is the first thing to look at?
1:23
Well, what what I'm really curious to see is does the US
1:28
Navy ease the blockade a bit? Do they look the other way a bit
1:33
or maybe quite a lot in order to encourage the Iranians back to
1:37
the table while saying that actually the blockade is still
1:42
theoretically in place? Because it's pretty clear from
1:46
the last attempt to get them together at the end of last week
1:49
that the Iranians are not going to come back to the table while
1:52
the blockade is still in place. So if you subscribe to the Trump
1:56
always chicken is out view of this and think he's really
1:59
desperate to close it down. Should we be looking for signs?
2:03
And I have to say, looking at all the sort of tracking
2:06
websites and those kinds of things, I don't see it yet.
2:10
So for example, just yesterday during the night, the US Navy
2:15
boarded A tanker called the Majestic X, which has a Guyana
2:20
flag, without the consent of the Guyanese authorities but is
2:24
effectively a dark fleet Iranian tanker carrying Iranian oil.
2:28
So as of the middle of last night, they were still enforcing
2:31
it. I mean, each position is very
2:33
mysterious today because the American position in the last
2:37
few hours has been, well, the Iranian maintenance of their
2:41
blockade is not a breaking of the ceasefire as far as we're
2:45
concerned, even though, you know, the Iranians are showing
2:49
pictures apparently of troops boarding ships and threatening
2:53
to fire on them. And the Iranian position is very
2:57
much that, you know, the, the, the American blockade is a
3:00
violation of our agreement. An act of war, they say.
3:02
Yes, Yeah, absolutely. Yeah.
3:04
Well, well, clearly Iran would like a situation where they stop
3:09
the Gulf Arab states or whoever else getting oil out and and
3:12
imports in and, and they carry on trading as normal.
3:15
But I, I, I think in a way, the imposition of the American
3:19
blockade was quite a decisive moment in the sense that for a
3:23
few weeks the Iranians had really dominated escalation
3:28
after the Israelis hit the Paz gas field and they then started
3:32
hitting the gas facilities in Qatar and various other things.
3:36
Trump seemed to be powerless and the blockade has definitely
3:40
focused mines in Tehran. You know, why didn't the
3:44
Americans do it sooner? Possibly because they were
3:47
trying to contain the oil price shock.
3:49
Now, certainly at the start of this, we know very well that the
3:54
Israelis and the Americans were overly optimistic, deluded some
3:58
would say, about the effects of killing the Iranian leadership,
4:02
Ayatollah Ali Khamenei, and that that would cause some kind of
4:05
implosion of the regime. And consequently there are
4:07
elements that they really needed to be in place that weren't.
4:11
So for example, when we learnt that those U.S.
4:13
Marines were sailing from Okinawa several weeks ago,
4:17
they've given the ability to board ships and stuff like that,
4:21
that Marine Expeditionary unit, and it wasn't really there when
4:24
this started. So they weren't in a sense fully
4:27
lined up to impose a blockade. And that's another reason, along
4:31
with the economic implications, that they probably didn't do it
4:34
sooner. I mean, the effect of the
4:35
American blockade is also not quite what was talked up right
4:40
at the beginning when they started doing this almost two
4:43
weeks ago, which was to say that, you know, Iran had about
4:46
10 days to two weeks before it would have to start shutting
4:50
down oil production because there was nowhere to store the
4:53
oil because they were using ships as it was to store their
4:57
oil. And that once they shut down,
5:00
these were not things that could easily be started up again
5:03
because, you know, water floods in and they're effectively over.
5:08
That doesn't seem to have happened.
5:10
And, and the Iranians seem, you know, seem to think that they've
5:14
got more time than than we thought.
5:16
Yes. Well, look, another narrative I
5:18
think that has prevailed throughout this is that the
5:21
Iranians have got a higher pain threshold.
5:23
And there is the question when the blockade was announced, you
5:27
know, how rigorous was it? Did the Americans kind of feel
5:31
their way into it? Because as you know, Krish,
5:34
there are lots of open source intelligence people.
5:37
And you know, there are sites like tankertrackers.com, you
5:40
know, which use ship positioning data, satellite photography,
5:45
Lloyds List, all sorts of other data to work out what's going in
5:50
and out. And they were saying that some
5:51
of these Iranian ships were still getting out.
5:54
And last night, Synccom, the the US military in the area said,
5:59
no, it's not true. You know, that they denied that
6:02
they'd been letting ships out and say that they've intercepted
6:04
31 or, or caused them to turn around by radio messages.
6:09
But but there is the suspicion that some people are
6:12
successfully still running the blockade. the FT did a piece on
6:16
this this morning. And that works both ways.
6:19
Some people are beating the Iranian blockade too by hugging
6:22
the Omani coast and the data, you know, this ship data system
6:28
AIS is constantly being spoofed and deceived or ships that
6:32
trying to run the straight or either turning it off off or
6:35
spoofing their location. So it's very hard to get
6:38
accurate data on who is going in and out.
6:40
Now last time you talked about, you know, the imminent arrival
6:43
of 1/3 aircraft carrier and there are what, more than a
6:47
dozen American ships now sort of trying to enforce this.
6:50
Oh yeah. A blockade.
6:52
But what is this doing for the reputation of the American
6:56
military that it is not conclusive what they can
7:00
achieve? They certainly can't reopen the
7:03
straits. They haven't been able to
7:05
achieve a military victory. You know, the most
7:08
sophisticated, most powerful military in the world doesn't
7:12
look like it's winning. I think this whole question
7:14
about, you know, is the US Navy no longer able to guarantee
7:18
freedom of navigation on the seas, you know, that kind of
7:20
thing, conceptual, quite a big concept in terms of global
7:23
trade, international law, the so-called rules based order when
7:26
we know Trump doesn't care too much about that.
7:28
But I think for lots of countries, you know, like those
7:31
Southeast Asian countries running out of oil right now,
7:34
there are some pretty big implications in that.
7:36
And I think it's definitely true that with the forces that the
7:39
Americans had at the beginning and even with the reinforced
7:42
forces they have now with those marine task groups and a few
7:46
more ships in the area, they do not have the military means to
7:50
force open the Strait of Hormuz. Now, if you were to say to me,
7:54
well, then America can't do it. You know, it may be with six
7:57
months of mobilisation of, you know, minesweepers, ships in
8:01
reserve, reserve helicopter squadrons that are used for
8:04
minesweeping, you know, thousands more troops
8:07
potentially to land on the islands in Australia.
8:10
Possibly they could do it. But but it it's really shown us
8:15
the limitations of American naval power in that sense.
8:17
And and you know, China will be watching as the chief of Naval
8:21
staff said this week in in testimony to the Senate and
8:25
that, you know, in a sense he was saying we have to win this
8:27
one or, or, or China will draw its conclusions vis a vis the
8:31
Taiwan Strait. Yes, and that America will not
8:33
be able to guarantee any security to to Taiwan.
8:36
I mean, hasn't it also, though, changed our notion of what, what
8:40
warfare is? You know, that, that this is not
8:43
about two militaries confronting each other and it being a battle
8:46
of who, who has got the most ships and the most planes and,
8:49
and the most forces. It is about the use of levers
8:52
like the Straits of Hormuz to pressure the whole global
8:56
economy and and in that respect, American dominance and American
9:01
military supremacy looks a whole lot different.
9:04
Yes, well, it, it slightly depends whether you think, I
9:07
mean, we, we've said from the start that, you know, for the,
9:10
for the regime in Tehran, it is a war of survival.
9:13
For Trump, it's a war of choice for Netanyahu, it's somewhere
9:16
between the two sort of thing. But I, I definitely, from
9:19
Trump's point of view, he's not going to mobilize, you know, the
9:24
United States Marine reserves or the naval, the reserve naval,
9:27
whatever those things he'd have to do.
9:29
So in that sense, it's not war in the classic, you know, World
9:33
War Two sense of applying all of 1's national resources to
9:36
achieving an end result. It's a limited war, a war of
9:40
choice. And in in trying to fight it in
9:43
this way and trying to fight it as far as possible bloodlessly
9:47
from the American point of view, he's exposed had American
9:51
weakness. And, and as a longer term
9:53
indicator militarily, what what, what are you looking at?
9:57
Well, a lot of people when we started with this were asking
10:02
questions about what's called by the the Pentagon and other
10:07
military's magazine Depth. In other words, in those bunkers
10:11
in Norfolk, VA, or somewhere out Midwest or whatever, how many
10:16
Patriot missiles have you got? How many naval missiles, you
10:19
know, torpedoes, all the other paraphernalia of war?
10:22
That's The Expendables. Now, obviously, when you buy a
10:25
new Patriot missile and it's $4 million a time, you tend not to
10:31
build up too big a stock. That's been the problem during
10:33
those long years that the US was just confronting insurgencies in
10:39
Iraq, Afghanistan, people who couldn't shoot their planes down
10:41
or, or you know, fire ballistic missiles at them.
10:44
I mean, the UK even more so ran down all those stocks.
10:49
And so we, we knew going into the war and there was a lot of
10:52
speculation that the Iranian missiles might exhaust the
10:56
defensive missiles stocks like Patriots, like the, the one
11:00
called the, I think it's the Terminal High Altitude Air
11:03
Defence System or Talon, which is the one that actually
11:05
intercepts missiles in space. the Super expensive, that's $12
11:09
million around now we find out there was a leak to CNN earlier
11:14
this week. The stocks of Talon and Patrick,
11:18
the defensive ones had been reduced by about 1/3 during the
11:23
exchanges of October 2024 and then June 2025 when the Iranians
11:30
were firing at Israel. We now know that they're down to
11:32
half level and we also know that some of their attack missiles,
11:39
there's a new one that they've used.
11:41
In fact, it's been implicated in that tragedy at the school in
11:45
Mihab on the second day of the war, I think it was called
11:48
PRISM, which is a very advanced attack missile.
11:51
They've apparently fired off 45% of their stock of those now.
11:56
I think in a way people saw this through the wrong PRISM.
11:59
They thought, Oh, well, as soon as they're getting low, they're
12:01
going to have to sue for peace, which is not quite right.
12:04
There are there are other reasons why Trump wants out of
12:07
this. But I think it does leave real
12:10
serious worries in the Pentagon and elsewhere in Japan, in
12:14
Taiwan, about what on earth would the US do if there was a
12:18
big emergency in the South China Sea or the Taiwan Strait.
12:21
And that's, we believe what the chairman of the Joint Chiefs,
12:25
General Dan Kane, specifically warned Trump about a couple of
12:29
weeks before this started. We, it's sort of, we can sort of
12:32
do this, he said. But we've really got to think
12:35
whether that leaves us defenseless.
12:37
Visa V China. So quite, quite a big point for
12:41
the Pentagon when it's supposed to be focusing primarily on the
12:44
Chinese challenge. I mean, I want to talk about
12:47
China later on, but I mean, just just in terms of sort of the
12:49
geopolitics, China has been been relatively quiet.
12:54
You know, it's been doing a lot of diplomacy behind the scenes.
12:56
It's been putting pressure on Iran.
12:58
It's been saying the Strait needs to be reopened.
13:01
It's been working with the Pakistanis.
13:03
But there's this sort of assumption that that all eyes
13:07
are on the Trump visit to go and meet XI next month around around
13:14
mid-May, and that they don't want to rock the boat.
13:18
And that's sort of chimes with what they were saying to me when
13:20
I was in China when Starmer was there, which was that they want
13:23
now to be seen as upholding the old fashioned international
13:28
order and doing things the old fashioned way.
13:30
Yeah, that's what you think is the is the reason for their
13:34
relative. Well, I, I think they want to be
13:36
seen as, as a, as a, as a reliable, you know, believer in
13:42
the international rules based order and not part of the
13:45
Trumpian upheaval of everything that's going on.
13:48
And they also have to keep their eye on their international
13:52
relationships. I mean, they, they remember our
13:54
friends with everybody in that region.
13:56
They have relationships with Israel, with the Gulf states,
13:58
with Saudi Arabia, as well as Iran.
14:00
And, and arguably their relationship with Saudi Arabia
14:03
is more important than their relationship with Iran in terms
14:06
of the future supply of oil. For China, yeah, I think you're
14:10
bang on there and it and it's interesting that one of the few
14:12
things that have been said publicly was Xi Jinping did say
14:16
we can't accept the law of the jungle, which is exactly your
14:20
point about China wanting to position itself as the
14:23
responsible, you know, wise status quo power in a way.
14:30
And I think you're also right that they're looking in, in many
14:34
ways to capitalize at the end of this on the sort of degradation
14:40
of American credibility to the Gulf states.
14:42
You know, the Gulf states having urged time and again don't do
14:46
this, having their will ignored by Trump, then dealing with all
14:49
the awful consequences of, of being hammered by Iran.
14:53
And China definitely wants to, to, to capitalise on that
14:57
diplomatically, commercially and all sorts of other ways.
15:00
So I, I think that's right. They can't be seen as as taking
15:05
Iran's side of this and openly siding.
15:08
Now fascinatingly, with that ship that was stopped going in
15:13
to Iran at the start of this week, I've got to remind myself
15:16
of the name the Tusker. Now that was a container vessel
15:19
sailing in, of course, with imports to Iran.
15:22
Now, Trump has tried to imply that there was Chinese weaponry
15:25
on board. I'm not sure.
15:28
I mean, China seems to be denying that.
15:31
But I mean, Trump seems to be trying to deny them that
15:34
position of having it both ways and trying to put them in the
15:38
frame as being on Iran's side. But precisely because he's
15:42
presumably getting anguished calls from MBS in Saudi Arabia
15:46
and, and the Emiratis and everyone else saying, you know,
15:49
you've got to stand with us and don't sell us out.
15:52
And and it's quite a dilemma I think for China.
15:57
It's, it's worth remembering that quote from the Indian
16:00
foreign minister, Jay Shankar, who, who was a ambassador to
16:03
China for a long time. He said in that period after,
16:07
you know, 2000, when America was, was, was again in the
16:10
Middle East bogged down. You know, he, he characterized
16:14
the relationship as, you know, China was winning but not
16:18
fighting and America is fighting but not winning.
16:22
And I, and I think that's how China would hope the dynamic to
16:27
continue. Now, yes, I mean, I, I want to
16:30
bring in a, a, a guest now 'cause we have Anne Pettiford,
16:35
the eminent economist and author whose latest book is The Global
16:41
Casino. And she's been an adviser to to
16:45
many people around the world, not not least the a previous
16:48
incarnation of the Labour Party under Jeremy Corbyn and John
16:51
McDonnell. And thank you for joining us.
16:54
You, you have now you sort of written on your sub stack that
17:00
you feel compelled to come out and say you think the world
17:03
despite the ceasefire, despite all the optimistic talk from
17:08
Trump and others that the world is heading for a global economic
17:11
slump. Absolutely.
17:12
Thank you very much by the way for having me on.
17:14
But the, you know, the most visible shock is on tankers and
17:19
if you like, and everything that's happening at sea.
17:22
But in reality, the much more imaging shock is already moving
17:26
through the global system. You know, we're seeing that
17:30
there's a problem with vessels not leaving the Gulf six weeks
17:37
behind, docking where they should be docked.
17:39
We've seen that inventories are not being drawn down and that
17:43
when production plants should already have been turned into
17:46
output, output that's already blocked now that's building up
17:51
already. You know, the, the, the, the,
17:53
the tanker that was due to have left six weeks ago is still not
17:56
left. It should have arrived at dock
17:58
in China, in Asia mainly. And where there's a cargo
18:02
waiting to, to be loaded onto the back onto the ship to become
18:07
home. Those, those cargoes on dockside
18:10
are going to build up and and back up if you like as
18:14
production arrives at the port. So we've got a real big problem
18:17
already and that still hasn't kind of manifested itself
18:21
because we're still so focused on a the oil price when actually
18:25
the fertilizer price and the shortage of fertilizer potassium
18:29
and sulphur is actually much, much bigger problem.
18:33
We're so focused on the Gulf, we can't see what is already
18:37
happening down the system change.
18:40
I mean, we are, we're seeing obviously the immediate impact
18:44
as you say on fuel prices showing through in our domestic
18:48
inflation rates already, you know, but what, what is it
18:53
that's coming down the track next?
18:55
What is the next wave of this that you think takes us into,
19:00
well, potential recession? So, Krishna, the point is this
19:04
that, you know, at the moment Trump embarked on this war,
19:07
Trump and Netanyahu, the global economy was deeply unbalanced.
19:12
You know, I predicted the global financial crisis in 2005, six,
19:17
when global debt was to 120% of GDP.
19:21
And I argued that because the debt was so high relative to
19:24
global income GDP, it would not in the end be repaid and that
19:28
would cause a crisis. And so indeed it did.
19:32
Then then after the crisis, debts were resolved really
19:35
through through bankruptcy largely.
19:37
But then they built up in advance of COVID when debt rose
19:41
to about 158% of GDP. And that precipitated another
19:46
crisis at the time of COVID, in fact, a great financial crisis,
19:49
which we often overlook this. The global debt now is backed
19:54
down again to about 130% of GDP, but it's still massively
19:58
unbalanced. So we have trade imbalances,
20:01
which cause political tensions, which has led to, you know, the
20:05
rise of tariffs and so on from the United States.
20:08
But we also have financial imbalances and in continents
20:11
like Africa which are going to be so badly damaged by the
20:14
failure of these stocks to flow from the Gulf.
20:18
Two markets across Africa, those countries are already dealing
20:23
with sovereign debt crises. So I'm trying to argue that.
20:26
And then of course, in the United States, we have a bubble,
20:29
We have a massive AI bubble. So these are all imbalances,
20:33
huge amounts of corporate borrowing with no real
20:37
indication of where the profits and income for repaying that
20:41
borrowing is coming from. In the case of AI, these
20:44
imbalances already exist at this point.
20:46
Trump sort of Chuck say a Wrecking Ball at the global
20:50
economy. And I must say that from where I
20:52
sit, it looks like an attack on, on Asia, but also in particular
20:57
on China, because most of the goods that were due to leave via
21:02
the Gulf were, were really heading towards Asia.
21:05
And I, I, I, I mean, I, I'm with you that China's playing a
21:08
clever role here, but it must be very, very testing for her
21:13
because, you know, as Helen Thompson has argued, you know,
21:16
this appears to be an attack on China rings.
21:19
I wanted to ask you about the disconnect between this kind of
21:24
looming disaster, which seems inescapable given everything
21:29
you've said, You know, all those indicators about fertilizer and
21:33
other products that not leaving and the relatively buoyant state
21:37
of markets. Now you've mentioned the US
21:40
market, but it's not just there, is it, You know, the Europe, the
21:45
Israeli stock market are the are the kind of high, I mean, why is
21:49
there this disconnect given that there seems to be this kind of
21:53
doom juggernaut just just down the road?
21:57
Well, I think partly, I mean partly I think it's delusional
22:01
and I've never trusted the judgement of markets when it
22:03
comes to economic outcomes. But the point is also there's a
22:07
lot of money around. Quite a lot of it comes through
22:10
the shadow banking system. There's, there's you know,
22:14
trillions of credit, there's $127 trillion of financial
22:18
assets, if you like in the in the shadow banking system.
22:22
And a lot of this money is aimed at finite resources, at finite
22:26
assets like for example, AI. And so the markets are reckoning
22:32
that because the world seems to be awash with this cash that
22:36
actually all things will be resolved in any way.
22:38
You can always trust Trump to chicken out and sort of sort it
22:41
out. I, I, I actually think he would
22:44
love to chicken out at this moment, but he's unable to do
22:46
so. So the in the markets in not,
22:49
you know, predicting that and not acting in line with that I
22:53
think proving to be quite deceptive at the moment and
22:57
delusional. But, and this has happened in
22:58
the past. I mean, it certainly
23:00
happenedbeforethe.com crisis and before the great financial
23:03
crisis when markets gave no indication that there was going
23:06
to be a an implosion. And isn't it also the case that
23:11
central banks in this situation will tend to concentrate on the
23:15
headline figures of inflation rather than what they need to do
23:21
to support individuals, consumers and countries to try
23:26
and weather the storm? I mean, you know, the, the, the
23:30
Bank of England Monetary Policy Committee are unlikely to cut
23:33
interest rates as they might have been expected to a couple
23:36
months ago next week. And you know, it's unlikely they
23:41
will raise them at this stage. But you know, you never know
23:43
what's going to happen down the road.
23:45
They they, they are still likely to say we need to strangle
23:49
demand because inflation is above target.
23:52
Exactly. So, I mean, this is what is, so,
23:55
I don't know, contradictory about central bank policy and,
23:59
and I'm worried about it because the Bank of England at its last
24:02
meeting, although they didn't declare they were going to raise
24:04
rates, they were, their statement was extraordinarily
24:07
hawkish and bond markets reacted violently to that.
24:11
And everyone blames the bond market.
24:14
But in fact, it was the Bank of England's hawkishness that
24:16
triggered that. In the case of the Fed, they
24:19
were very much more cautious about what they were said, and
24:22
they chose not to be hawkish and they did not have a similar
24:25
crisis. But the fact is that central
24:27
banks do not have the tools that are needed to deal with global
24:31
markets fixed, you know, largely fixed by speculators.
24:36
I mean, clearly global recession of the kind that you believe is
24:39
coming will be intensely damaging to people's lives and
24:44
livelihoods. I mean, in a domestic context,
24:48
you know, people say technically 2 successive quarters of
24:52
negative growth is a recession. But I mean, what are you looking
24:56
for on the global level to to tell you that this moment that
25:01
you're dreading is actually upon us?
25:03
So what are? What are the key indicators?
25:05
So one of the key indicators is the strength of the dollar.
25:09
I mean, the dollar was weakening and the Trump administration was
25:12
making deliberate efforts to weaken the dollar because they
25:15
finally learnt that actually a very strong dollar is bad for
25:18
the American, for American manufacturing in the American.
25:22
But now because of the crisis and because of it, it's still
25:25
regarded as a safe haven. The dollar is strengthened and
25:28
the stronger it is, the worse it is for those countries that need
25:32
dollars to to buy pharmaceuticals and to buy oil.
25:37
So there's one really important indicator and the other is going
25:40
to be the price of food. So you're going to see
25:43
governments facing enormous political crises as as people,
25:47
of course, become very agitated over the fact they don't get
25:50
their daily bread. And that's another indicator.
25:54
But I mean, they're just too many.
25:56
It seems to be at the moment. And, and, and there is just
26:00
another indicator, of course, is what's happening in China.
26:03
And China's growth appears to be slowing down and we have to
26:06
worry about that. I think as well maybe that, you
26:10
know, fewer exports and also more imports and perhaps more
26:14
expensive imports account for some of the imbalances in the
26:17
Chinese economy. But but these imbalances have
26:21
been there for a long time, and they don't need to be shocked,
26:26
rocked and shaken by some new shock.
26:30
Isn't it also the case that that China has insulated itself to
26:34
some degree from the short term shocks by having bought a huge
26:39
amount of oil in advance? And, and, and so they, they are
26:43
sort of less affected than Europe.
26:46
And the other people of course, who are much less affected are
26:48
the Americans. Those who consume the stuff at
26:51
the at the at the petrol pump are really hurting and that and
26:56
that's because the price of oil in the United States, despite
26:59
the fact that the United States is awash with oil is as is the
27:03
global price is $100 hundred dollars a barrel.
27:06
But I wonder whether this. Price to China.
27:09
You know, what Trump had been saying about Europe and NATO not
27:12
getting involved in the Straits of Hormuz with the fact that
27:15
America, you know, doesn't need the oil that's coming out of
27:19
there and that that's perhaps affecting, you know, his
27:22
relatively relaxed attitude now all of a sudden, rather
27:25
mysteriously, towards Iran maintaining its blockade.
27:28
Well, I think that may well be the case.
27:32
I mean, a little bit like people have said, you know, all the way
27:35
through the first term and, and this second term of Trump, he
27:38
doesn't understand how NATO works and how, you know, it's,
27:42
it's not a case of who puts what into some central Kitty.
27:45
It's what they're spending nationally.
27:47
Similarly, I think there seems to be some evidence from his
27:50
statements that he doesn't really get how this global oil
27:55
price situation is going to work because of course he sees the US
27:58
as a net beneficiary of that because it, it, it produces and
28:03
exports so much energy now and gas.
28:06
And that he doesn't seem to sort of get that.
28:08
And, and I think you're right, I think that might be feeding into
28:10
an attitude of, well, you know, you may think you've got the
28:14
higher pain threshold, but hey, it's not so bad for the US if
28:18
prices stay this high for longer.
28:20
I mean against that has to be balanced his considerations
28:23
about you know, $4.00 gas and and the midterms and all the
28:26
rest of it. Well, Anne Pettifor, thank you
28:28
very much indeed. Thank you, Anne.
28:29
I wonder. Whether we should just sort of
28:32
more explicitly talk about what China will be learning as it
28:36
looks to American military power, as it thinks about its
28:41
own its own ambitions for Taiwan.
28:43
The Chinese timetable was widely expected to be 2027.
28:47
You know, the, the, the President Xi had reputedly told
28:51
his military, you know, that's what we want you to be ready to
28:54
start enforcing a blockade of Taiwan or be ready for some sort
28:58
of invasion. And, and the, the pressure
29:01
against this obviously is the American security guarantee.
29:05
The American security guarantee just doesn't look that credible
29:07
anymore. No, no.
29:09
And I think even before this, there were a lot of people who
29:13
really wondered what it amounted to.
29:16
And would somebody who who proudly proclaims American
29:21
self-interest in the way that that Trump does America first
29:24
and all the rest of it would really risk World War Three to
29:28
go to the aid of Taiwan, which as as he has said, he's always
29:32
been part of China anyway, sort of thing.
29:34
So, so, so I think those doubts were there from the get GO-1
29:39
slight dissenting thought. So I was talking to to a senior
29:43
Taiwanese official a couple of weeks ago who thinks that they
29:47
won't entirely be drawing positive lessons from this.
29:50
The Chinese sent some advanced air defence systems to Iran
29:54
after last year's 12 day war, which apparently have all been
29:58
taken out by the Israelis and the Americans, which has not
30:03
been well received in Beijing and has caused, you know, a sort
30:07
of carpeting of the military as if to say what's wrong.
30:11
You know, why are our more advanced air defence systems not
30:14
apparently worth anything? So I think they will be drawing
30:17
some lessons from this that that are cautionary.
30:21
But overall, yes, I mean, I think the war has exposed the
30:25
the limits of US naval power and the thing that the point that
30:29
you've been making is the way that China thinks strategically.
30:33
So did have a six month reserve of oil ready to to withstand
30:39
various international crises. You know, does have the
30:42
manufacturing capability from production lines that are
30:46
already going full tilt to exploit a surge in renewables.
30:50
You know, does have the manufacturing capability to to
30:54
fill its magazines of missiles with even more, you know, to
30:58
capitalize on the Americans running their defensive missile
31:02
stocks down. I mean, they are in the most
31:04
extraordinary position in that sense because they've fought
31:07
strategically over the long term.
31:10
And by contrast, I mean what feels like the absolute opposite
31:13
in America. I mean, the thing we haven't
31:15
mentioned actually is that is the slight political chaos in
31:18
the Defence Department, having just sacked the secretary of the
31:22
Navy when the Navy is at its most important moment in this
31:26
whole crisis. I mean, do we know what's behind
31:29
that? Allegedly, it's because he had
31:32
not sufficiently gripped the problems in American shipyards.
31:37
You know which I mean, he hasn't had very long to do so.
31:41
But but that is a big problem in terms of the increasingly
31:45
adverse relationship into in numbers between the Chinese
31:49
fleet and the US fleet. They are completely out
31:52
producing the Americans and of course have been for years and
31:55
and they are now the largest fleet in the world, the Chinese.
31:59
And of course Trump wants that dealt with as a matter of
32:02
urgency. But I think the broader issue in
32:03
the Pentagon is obviously the problems of working with Pete
32:06
Hagseth, which, you know, quite a few people have come unstuck
32:10
there, both in secretary of Defense's office.
32:13
You've got the head of the Army leaving early, Secretary of the
32:16
Navy. He's got problems with the
32:18
Secretary of the Army too, which have been widely reported.
32:21
It's it's a pretty unhappy place to work, I think.
32:24
That's a good place to leave it, I think.
32:26
Thank you very much indeed for joining us.
32:29
And that's it for the forecast indicators.
32:31
Goodbye.