On Friday, ZeroHedge, in partnership with the Macro Dirt Podcast, hosted a debate focused onthe implications for agriculture, inflation, and global supply chains given the current situation in Iran. The discussion was illuminating and worth a rewatch if you missed it.
The discussion featured former Bridgewater head of commoditiesAlex Campbell,Brent Johnsonof Santiago Capital, and was hosted byTony GreerandJared Dillian.
Even in a best case scenario where shipping lanes reopen immediately, Santiago Capital’s Brent Johnson says the damage is already embedded in the system.
“If everything opens tomorrow in the strait and goes back 100% to normal, there’s a five to six week open spot where ships are not arriving where they typically arrived.”
The warning came during last night’s ZH deep dive into a potential fertilizer and farming crisis, with possible Arab Spring-level disruptions in the Third World, but as Johnson said“the U.S. is not immune”.
Johnson joined Tony Greer and Jared Dillian of theMacro Dirt Podcastand former Bridgewater head of commodities Alex Campbell who now writes atcampbellramble.ai. Here were the key moments for those short on time:
The five to six week wartime-gap (assuming that’s all) is colliding directly with the agricultural calendar.
Johnson: “The planting season is largely already over. And the fertilizers that would have normally been available were not. And those that were available were higher priced…You look at the number of bankruptcies that are being filed by farmers in the United States and it’s spiked.”
At the same time, weather risk is rising. “This is an El Niño year… and that throws all kinds of havoc with weather patterns.” The combination, he says, raises the probability of a delayed but meaningful shock.
“You could have a perfect storm six to nine months from now.”
Source: ZeroHedge News
