Nobel laureate Paul Krugman laid out the NACHO trade—short for “Not A Chance Hormuz Opens”—last week, arguing the Strait of Hormuz will stay shut and the US is heading for “the greatest strategic defeat in American history.”
Events since have only proven his thesis.
President Donald Trump rejected Tehran’s latest counter-proposal as “TOTALLY UNACCEPTABLE” on Sunday night, sending Brent crude up 3.5% to $104.80 this morning.
Robert Kagan, a prominent neoconservative, made the same case over the weekend, calling a US defeat “not only possible but likely.” He wrote that Iran can now “demand tolls for passage” and “limit transit to those nations with which it has good relations,” a position that could push oil to $150 or $200 a barrel.
The pump-price proof is already showing. AAA’s national diesel average sat at $5.67 a gallon last week, up from $3.49 a year ago. California regular unleaded broke $6.15 …
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