It is not a big sudden accident but a series of small disasters. That, according to some people, is the prospect facing the world economy and the financial system due to the conflict in the Middle East. But what if these small disasters fall and collapse together?
And what if the Trump administration emerges as the only winner in the conflict due to the fact that, in engineering the closure of the Strait of Hormuz, it has locked Europe and Asia into heavy dependence on American oil and gas, especially now that the United Arab Emirates has declared Exit from the Organization of the Petroleum Exporting Countries (Opec)?
Or what if in addition to its aggressive actions in the Middle East, the United States under President Donald Trump also forces Europe and Asia to bear the financial burden of self-defense, thus allowing the United States to emerge as the only true economic winner in the war that it, along with Israel, started?
Experts from various disciplines – economic, financial and geographical – seem unable to put it all together or acknowledge the danger of a general crisis. Instead, they seem to have focused on the idea of systemic resilience.
Eswar Prasad, a professor of trade policy at Cornell University, has been reported as saying: “The global economy has shown itself to be able to withstand major shocks such as massive US tariffs, so there is room for hope that it will withstand the fallout of a war with Iran.”
Such views or diagrams do not capture the full picture, however. They describe a single economic and financial blow that causes the victim to stumble in his step but not together to cause a fall – something that can now be expected.
