You’ve probably already heard about the new 60-day pause, but I’d love to hear your assessment of it. Personally, I can see why Trump felt he had to approve it, but I suspect it will be a mistake. The Islamic regime simply cannot be trusted. They will use these 60 days to strengthen their hand, and Trump will end up having to bomb them anyway - possibly after they’ve committed some atrocity against us.
From what I have read President Trump has not approved it yet.
The 60-day extension presumably calls for a full-reopening of the Strait of Hormuz, including a lifting of the US Navy blockade. What happens with Iran's enriched uranium is not entirely clear, although Trump has been consistent in not wanting Iran to have it or to take responsibility for destroying it.
If no frozen funds are released, and sanctions are not removed, but the navy blockade is lifted in return for opening the Strait, the 60-day extension might be a worthwhile idea.
Until President Trump and the Khameini regime both formally agree to a ceasefire extension, I am not going to speculate beyond that over what might be in the agreement. That's a moving target that is next to impossible to hit.
You really are superb at these kinds of analyses, Peter. You were born an economist!
Reading the details, I keep seeing every commodity scenario as being in flux, impossible to predict. For example, Canada probably has the capacity to increase refining of aluminum, but they are also being hit with higher energy costs. Is it therefore feasible to increase smelting, or do energy costs outweigh the potential financial gains? Would Alberta, as Canada’s main energy source, use its increase in leverage with Ottawa to bargain for better terms in representation, or would Alberta feel emboldened by its oil wealth to break free? It’s all in flux.
Globally, we could see some countries seize market-share opportunities (what will Milei in Argentina see as possible?), and we could see regimes topple because of consumer despair. It’s all in flux. On the present trajectories, more stagflation is likely, but it’s impossible to predict the rate or how widespread it might become.
One question in my mind, Peter, is regarding federal gas taxes.I saw a brief Substack note just a few days ago, saying Trump will issue an EO to eliminate federal gas taxes (for now). I’ve heard nothing more about it. It would lessen some domestic economic pain, but it seems to me that it would be politically too difficult for Trump to reinstate them, especially before the midterm elections. What do you think, Peter?
President Trump's proposing an EO to suspend federal gas taxes has gotten the attention of a few in Congress, who are proposing legislation to do the same thing--and the benefit of legislation is that there is no Constitutional question about authority.
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Republican Sen. Josh Hawley of Missouri said on social media Monday that he will introduce legislation to suspend the gas tax. Democrats have previously sponsored similar legislation. Rep. Anna Paulina Luna, R-Fla., also said in a post on X that she will introduce a bill “to suspend the federal gas tax in light of Trump’s recent remarks.”
Senate Majority Leader John Thune said Monday he has not “been a fan” of a gas tax suspension, but added: “You know, I’ve got some colleagues out there who think it’s a good idea. So, we’ll hear them out.’'
Important point to realize is that what is being discussed is a suspension, not a repeal. In all probability the legislation would have an expiration date on it so that the gas taxes would return at a specified date without further legislative action. That neutralizes most of the political landmines surrounding reinstatement. You'll notice that Congress did the same thing with the healthcare subsidies that expired during the big government shutdown. New legislation was required to extend them, that legislation never saw the light of day, and how much have you heard about the issue since? Democrats aren't even making it a major mid-term election issue.
Will a suspension help? Anything that trims the price of gas is going to be well received, but if the Strait of Hormuz remains closed, a gas tax suspension is just playing for time. The longer the Strait is closed the more rising gas prices will overtake any cost reductions from the suspension.
If Trump does push a gas tax suspension I suspect it means he's planning on the Strait being closed for longer, and is working all the angles to buffer the impact on Americans.
At current levels of shipping through the Strait, Iran is as blocked off as everyone else, and their best case scenario is they are shutting in oil wells at a slower pace than some have initially projected. The longer Trump can keep the pressure on the more likely the IRGC will either collapse from within or do something colossally stupid to justify renewed hostilities.
You’ve probably already heard about the new 60-day pause, but I’d love to hear your assessment of it. Personally, I can see why Trump felt he had to approve it, but I suspect it will be a mistake. The Islamic regime simply cannot be trusted. They will use these 60 days to strengthen their hand, and Trump will end up having to bomb them anyway - possibly after they’ve committed some atrocity against us.
https://www.theepochtimes.com/world/tentative-60-day-iran-ceasefire-deal-reached-pending-trumps-approval-sources-6039888?utm_source=ref_share&utm_campaign=copy
From what I have read President Trump has not approved it yet.
The 60-day extension presumably calls for a full-reopening of the Strait of Hormuz, including a lifting of the US Navy blockade. What happens with Iran's enriched uranium is not entirely clear, although Trump has been consistent in not wanting Iran to have it or to take responsibility for destroying it.
If no frozen funds are released, and sanctions are not removed, but the navy blockade is lifted in return for opening the Strait, the 60-day extension might be a worthwhile idea.
Until President Trump and the Khameini regime both formally agree to a ceasefire extension, I am not going to speculate beyond that over what might be in the agreement. That's a moving target that is next to impossible to hit.
You really are superb at these kinds of analyses, Peter. You were born an economist!
Reading the details, I keep seeing every commodity scenario as being in flux, impossible to predict. For example, Canada probably has the capacity to increase refining of aluminum, but they are also being hit with higher energy costs. Is it therefore feasible to increase smelting, or do energy costs outweigh the potential financial gains? Would Alberta, as Canada’s main energy source, use its increase in leverage with Ottawa to bargain for better terms in representation, or would Alberta feel emboldened by its oil wealth to break free? It’s all in flux.
Globally, we could see some countries seize market-share opportunities (what will Milei in Argentina see as possible?), and we could see regimes topple because of consumer despair. It’s all in flux. On the present trajectories, more stagflation is likely, but it’s impossible to predict the rate or how widespread it might become.
One question in my mind, Peter, is regarding federal gas taxes.I saw a brief Substack note just a few days ago, saying Trump will issue an EO to eliminate federal gas taxes (for now). I’ve heard nothing more about it. It would lessen some domestic economic pain, but it seems to me that it would be politically too difficult for Trump to reinstate them, especially before the midterm elections. What do you think, Peter?
President Trump's proposing an EO to suspend federal gas taxes has gotten the attention of a few in Congress, who are proposing legislation to do the same thing--and the benefit of legislation is that there is no Constitutional question about authority.
-----
Republican Sen. Josh Hawley of Missouri said on social media Monday that he will introduce legislation to suspend the gas tax. Democrats have previously sponsored similar legislation. Rep. Anna Paulina Luna, R-Fla., also said in a post on X that she will introduce a bill “to suspend the federal gas tax in light of Trump’s recent remarks.”
Senate Majority Leader John Thune said Monday he has not “been a fan” of a gas tax suspension, but added: “You know, I’ve got some colleagues out there who think it’s a good idea. So, we’ll hear them out.’'
-----
https://archive.ph/AePZy#selection-20615.0-20625.206
Important point to realize is that what is being discussed is a suspension, not a repeal. In all probability the legislation would have an expiration date on it so that the gas taxes would return at a specified date without further legislative action. That neutralizes most of the political landmines surrounding reinstatement. You'll notice that Congress did the same thing with the healthcare subsidies that expired during the big government shutdown. New legislation was required to extend them, that legislation never saw the light of day, and how much have you heard about the issue since? Democrats aren't even making it a major mid-term election issue.
Will a suspension help? Anything that trims the price of gas is going to be well received, but if the Strait of Hormuz remains closed, a gas tax suspension is just playing for time. The longer the Strait is closed the more rising gas prices will overtake any cost reductions from the suspension.
If Trump does push a gas tax suspension I suspect it means he's planning on the Strait being closed for longer, and is working all the angles to buffer the impact on Americans.
At current levels of shipping through the Strait, Iran is as blocked off as everyone else, and their best case scenario is they are shutting in oil wells at a slower pace than some have initially projected. The longer Trump can keep the pressure on the more likely the IRGC will either collapse from within or do something colossally stupid to justify renewed hostilities.
Thank you, Peter. The excellence of your reply is a thing of impressive beauty!