Brad Setser on the War in Iran and the Future of the US Dollar | Odd Lots
From Odd Lots
Brad Setser•Whitney Shepardson Senior Fellow at the Council on Foreign Relations
Executive Summary
12 quotes
Concerns Raised
A prolonged physical disruption to global oil supply remains a significant risk to the global economy.
The rise of "choke point capitalism" and industrial leverage by nations like China creates new geopolitical and economic vulnerabilities.
Saudi Arabia's high fiscal breakeven oil price ($90-100) and reliance on borrowing to fund its ambitions create financial fragility.
Constrained global supply of key defense materials like missile interceptors will force difficult strategic shifts in alliances and defense spending.
Opportunities Identified
North American energy producers are well-positioned as reliable suppliers to a disrupted global market.
The continued dominance of US assets in global investment portfolios provides a stable, ongoing source of financing for the US current account deficit.
Countries with strong export sectors in high-demand areas, such as South Korea's memory chips, can experience massive growth despite other global headwinds.