Luke Gromen

MacroVoices @ErikSTownsend & @PatrickCeresna welcome Luke Gromen @LukeGromen. They discuss why the economic fallout from the prolonged Strait of Hormuz disruption has been slower than expected, with China’s reduced oil demand and coordinated strategic reserve releases helping cushion the supply shock, and why the bigger credit risk from AI may sit with the consumer. bit.ly/4sufi1M

.@SecScottBessent: “At the G20 in Asheville, North Carolina, in August, we pushed all the G20 members toward growth. We said that the biggest risk to financial stability is a lack of growth.”

if we look at the labor market...Fed should have been cutting today as we're entering recession territory!?! N'est-ce pas?

Q: There's been essentially no progress toward the 2% inflation target. Why not raise rates today? KEVIN WARSH: It's a good question (Note how he never answers it!)

BESSENT: OPERATION OUTCAST ON IRAN IS SUCCEEDING

Jamie Dimon to a country that pulled its gold out of New York: you have three armies within 400 miles, while gold in America is protected by two oceans and the US military “If we have the strongest military in the world and the strongest economy in the world, we will be the preeminent reserve currency. It is those two things.” “I was in a country somewhere in the Middle East, and also in Europe, and the people said, we took our gold out of the vaults in New York City and moved it to our country. You know what I said to him? I said, you have three armies within 400 miles who can come take your gold.” “That’s the real world. You’re not thinking clearly about safety. That gold is protected by the Atlantic, the Pacific, the United States military, the rule of law.” “But if we are not the preeminent military and economy, you will see our reserve status come down.”

But corporate profits and margins skyrocket as a result and wealth effect keeps things going vertical? K shape worsens but wealthy drive the economy already? No?

Helium added to the list of critical materials: energy.gov/sites/default/fil…

QatarEnergy signing long term contracts to purchase U.S. LNG may be what “Gulf states fend for themselves” looks like in practice. If the U.S. is going from guaranteeing energy security to selling it, then Qatar paying for U.S. goodwill with LNG deals now instead of hosting U.S. bases makes sense. The Qataris have traditionally been clear eyed about their situation and made decent deals. From before the British in Ottoman times to 1915 when the British expressly forbid Ibn Saud from attacking Qatar, Kuwait, and the Sheikdoms that would become the UAE. When Qatar became a separate country in 1971, Sheik Al Thani became Emir Al Thani and two days later the U.S. recognized the new nation. In the 1990s, Qatar discovered offshore natural gas deposits and transitioned from a poor peninsula of pearl divers to having the highest wealth per capita in the world in one generation and hosting F1 races. Similar to the House of Saud gaining U.S. support by recycling oil profits into U.S. treasuries, and Bahrain through hosting U.S. naval forces after taking over when the British withdrew east of Suez, Qatar built the largest air base in the Middle East, Al Udeid following the first Gulf War at over $1 billion and invited the U.S. Qatar security became synonymous with U.S. national security interest. Now the Qataris are shifting strategies by buying U.S. LNG after Ras Laffan took missile hits. The contract to buy U.S. LNG is for about 5% of Qatar capacity, and they already own 70% of Golden Pass LNG in Texas, so they are diversifying their long term supply outside chokepoints. Would Qatar bother if they thought the world was going back to the way things were? They are buying long term LNG contracts that don't start until the next U.S. administration and run through 2054. Is Qatar being clear eyed about a shift in U.S. policy and aligning themselves with the U.S.'s new policy of selling energy instead of guaranteeing security? qatarenergy.qa/en/MediaCente…