Transcript
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David Pakman (0:56)
we are now looking at what some experts are calling the Armageddon scenario for global energy. This is after missile strikes hit a facility that supplies about a fifth of the world's gas. This is of course directly tied to the optional escalation happening under Donald Trump in Iran. Prices are spiking, we've seen shortages start and this is going to ripple through the economy in a way that will affect every single one of us now. Now we're also going to look at a moment where Donald Trump said something so bizarre to the Japanese Prime Minister about Pearl harbor that everyone looked stunned and the dementia question came up again. At the same time, Trump seems to be realizing that the situation is likely to get much worse, especially as far as gas, oil, diesel and even fertilizer prices are concerned. And behind the scenes there is an important shift where top Republican donors are moving away from JD Vance and towards Marco Rubio. In thinking about 2028, this says a lot about how they see Trump's power significantly diminished. We'll also hear from some voters who voted for Trump not once, not twice, but three times, but they are sick of him. How quickly things change. We are now crossing into the consider of a worst case global crisis scenario that experts have been warning about for years. This is optional. It's happening because Donald Trump has pushed the Iran situation and thus the energy situation to the brink and the word Armageddon is now regularly being used. This is not a phrase that activists came up with. This was not MSNBC or some random socialist commentator. People who analyze global Energy markets for a living are looking at what's happening in Iran, what's happening in the Strait of Hormuz, what's happening with gas, what's happening with oil, and saying that this may be getting to a point not of no return, but of no immediate return. Now the latest escalation is that Iran has launched missile strikes on Qatar's Ras Lafan facility. This is one of the most important energy sites in the world. About 20% of global LNG, that's code for liquefied natural gas, 20%. One fifth of the world's LNG comes from this one place. So when that gets hit, it is a global issue. It's, it's not even regional. It hits the whole global energy system immediately. And that is exactly what we are seeing now before even pricing that in. Gas prices are now up 44% in the last two months in the United States from 273 for a regular gallon of gas up to 392. We haven't even priced in this latest set of strikes. Similar situation in Europe where gas prices are up about 30% basically overnight. Oil is spiking and traders are now trying to figure out what is the right price, meaning the market price when this much of the world's supply is disrupted. And this is, forget about weeks, you know, we, for a couple of weeks now I've been saying even if Trump stops today, we're talking about months of disruption and then we'll get into the summer, high demand for gas period, etc. We are now starting to see a scenario take shape that could be a years long disruption. This, I think a lot of people are missing this. This energy story could carry, forget about into the midterms. This could carry into the end of Donald Trump's term and play a role in the Republican and Democratic primaries of 2028. Three to five years of repair is what some experts are talking about now. Again, just like a reminder, optional Armageddon scenario as Trump loves to say. It never should have happened. It never should have happened. So what's next? Well, countries will have to start competing for diminished supply. Europe needs gas, Asia needs gas. Japan, South Korea, they're all bidding against each other now. I'm talking about liquefied natural gas, not gasoline. They all are going to be competing for more limited supply. Basic economics reminds us that that means prices go up even more. You're already seeing shortages in some places. There are reports of factories in parts of Asia already slowing down or even shutting down. Some cases of countries actually raising the amount of coal that they are using, which is the opposite direction we should be going in. LNG is better than coal, but it's obviously much worse than renewables. And we're seeing some parts of Asia go backwards to coal. So we've got economic damage, environmental damage, political insanity, absolute and total political insanity. And it's all happening as part of this escalation that Donald Trump has chosen to do in Iran. He should have known because basic foreign policy analysis tells you if you expand a regional conflict and you hit strategic targets and you raise the stakes and possibility of a bigger confrontation, at some point the response comes. And when it's the response that is now affecting global energy, it's no longer up to you to end it. Trump could go, it's over. And Iran will say, no, it's not. I spoke about this yesterday extensively with Steve Schmidt on his podcast. I think it was an interesting conversation. And the unfortunate thing is that energy infrastructure seems to be growing as the obvious target. And other countries, including Iran certainly know that you can cause chaos. You know, we talk about these scenarios, what if, what if a foreign country were able to taint our water supply and the chaos that that would cause? Yes. And that would be extraordinarily chaotic. And similarly, other countries know if we start hitting American energy infrastructure more proactively, they are right to know and believe that that could cause a completely out of control situation here in the United States. Now we're, so far everything I've told you right now is about this one strike affecting 20% of global liquefied natural gas production. Imagine if every other day there's a facility hit. If there's more shipping routes like the Strait of Hormuz that become either unsafe or completely impassable. We are looking at, I mean, listen, I, I, I don't like to be hyperbolic. I'm going to try to stick to what people are really saying. I mentioned this economist who was talking about $175 oil and $175 oil implies about 7 to $8 gasoline. There are others talking about 200 plus dollar barrels of oil now without saying this will happen, just kind of like pricing out the scenario. If we saw $225 oil, that would imply eight to nine dollar gallons of regular gasoline in California. For premium, you could be talking about 11 or $12 of gas for a premium gallon. Nothing that the United States has seen. I mean it would sort of be a functionally equivalent to the shortages of the 1970s more than likely. But what we are now expecting and looking towards are higher energy prices, higher electricity costs, higher food prices, supply chain problems, scarcity and shortages. And that is how the optional decision, likely illegal by Trump to go into Iran means we all are going to get screwed. It's a chain reaction that's very difficult to contain. It's sort of like a cascade. And what we're looking at right now is the nightmare Armageddon scenario that experts have been warning about. Trump would be smart to end this insanity now. That won't solve the problem right away. We're probably already at the point where even if Trump stops all hostilities against Iran today, which he's not going to do if he stops today, we're talking about months of this. We are on the precipice of this being years to recover. You know, some people wrote to me and said, Cash Patel is playing dumb, but I think he's actually dumb. And we are now wondering, is Trump going to have to fire his deranged FBI director for this? This exchange happened yesterday when FBI Director Cash Patel was testifying. Senator Cohen was questioning the FBI director about the firing of a bunch of FBI experts believed to be experts on the topic of Iran. Highly relevant right now. Cash Patel is asked, these were Iran experts. Right. And Patel just plays dumb. Except I don't think he's playing dumb. I think he is dumb.
