DIVERSIFY SUPPLY CHAINS

“And while we can make up some of that gap, because countries and companies have stockpiles, we can sort of like massage it a little bit here and there for the moment. The longer this situation goes on, the longer the tankers can't make it out of the Strait of Hormuz, the longer that 10% will continue compounding. And the longer that the supply disruption will end up rippling through the global economy.”

“So year-over-year inflation through the CPI index, which is a broad measurement of inflation, is up 3.3% from a year ago. And the Federal Reserve uses 2% as a target for where it wants inflation to be. Even before the war with Iran started, inflation was above that target level. And what we have now is an energy shock that is sending gasoline and diesel prices on one of their steepest climbs in decades, if not ever.”

“We are a net exporter of energy. We are the largest oil producer the world has ever seen. So why the heck am I paying higher gasoline prices when all of this is happening 7,000 miles away? The reason why is oil is the most global market. So we are a huge exporter of crude oil, of gasoline, of jet fuel, mainly from the US Gulf Coast. So that tethers us to the global market in a really big way.”

“There was a survey from the University of Michigan. It was the lowest ever in 74 years of the survey taking place. And so some of that might be an overreaction in vibes because the economy was pretty strong coming into this. But the direction of travel, how fast that plummeted in just one month as people were seeing those price increases in the gas station, that just goes to show that people hate this.”

“Natural gas, which is a huge part of what the Middle East exports in terms of energy, that is key for global power generation. It's key for air conditioning. It's also a key input for manufacturers around the world. If we're thinking about companies that build everything from chips to companies that create steel and need high heat, to companies that produce fertilizer for farming, all of that requires an immense amount of natural gas.”