Source: Operation Disclosure Official | By David Lifschultz, Contributing Writer

Submitted on July 4, 2024

GLOBAL CHOKEPOINTS IN MARITIME TRADE AND ITS WORLD FINANCIAL DANGERS

Compliments of The Lifschultz Organization, Founded in 1899

The first link covers the Straits of Hormuz chokepoint which if shut down would collapse the US financial system that the Pentagon at the highest levels maintained cannot be kept open by the US Naval forces as quoted in the same link. The entire world financial system would implode. The direct quotes with the Pentagon are in the first link. This link reflects the danger if the war in the Middle East spreads. This is the wild card that can bring down the entire world financial system by triggering the implosion of the 618 trillion dollar derivative exposures as reported by the BIS or Bank for International Settlements where the central bank representatives meet each month to coordinate currency flows. No major newspaper such as the New York Times will even touch this danger in detail. Other sources say the actual exposure in derivatives is two quadrillion in the second link. Over 20% of the world oil supply travels through the Straits of Hormuz and my inquiry sometime back with the Goldman Sachs oilderivative specialist said the oil price would go over $700.00 a barrel imploding the entire world financial system. Of course, then the price of oil  he went on to say would collapse as the world collapsed.  Dr. Doom (Henry Kaufman) in a conversation with me said the day it happens all the national  banking systems in the world would have to be nationalized by each nation. Warren Buffett has talked repeatedly about these derivative exposures characterizing the danger which if detonated would act in a chain reaction manner as a nuclear bomb imploding all the world financial markets.  In footnote one I cover this in more detail in a letter to Jamie Dimon the CEO of J. P. Morgan Chase.

If anyone doubts these conclusions we would refer them to review how a tiny and primitive group such as the al-Houthis have been able to block half the commercial traffic via the Suez Canal-Red Sea covered in the third link. We can assure the reader that no traffic will go through the Straits of Hormuz cutting off 22% of the world oil supply. Here at least there is an alternative which is to travel around Africa though it is more costly as the travel time massively increases.

https://goldbroker.com/news/two-quadrillion-dollars-global-timebomb-2261

https://www.imf.org/en/Blogs/Articles/2024/03/07/Red-Sea-Attacks-Disrupt-Global-Trade

Graphic Essay: Global Chokepoints in Maritime Trade

When these passages are blocked, it dramatically affects the availability and price of goods in every corner of the world.

By Geopolitical Futures – July 3, 2024

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Editor’s note: The following is the first of what we hope will be many Monthly Graphics, a visual-rich, subscriber-only essay that complements our long-form offerings and doubles down on what makes our Weekly Graphic so popular. Please feel free to provide any feedback you might have.

More than 90 percent of all goods traded – food, construction material, pharmaceuticals, you name it – are transported on water. Under normal circumstances, it is easily the safest and most cost-effective way to get a product from one place to another. But maritime trade is inherently vulnerable to natural chokepoints. When these passages are blocked – for whatever reason – it dramatically affects the availability and price of goods in every corner of the world.

The importance of the Suez Canal – in case anyone ever doubted it – was brought home in 2021 when a container ship known as Ever Given ran aground, blocking traffic for nearly a week and stranding many billions of dollars worth of goods. More recently, Yemen’s Houthi rebels last year threw their support behind Hamas after the Oct. 7 attack on Israel and have since intermittently fired rockets at commercial vessels in the Red Sea bound for the Bab al-Mandeb strait and the Suez Canal. The World Bank estimated that traffic through the two channels had been cut in half as of March 2024.

Many of the world’s leading oil producers export through the Strait of Hormuz, making it a critical passageway for the transportation of global hydrocarbons. Last year, nearly 21 million barrels of oil per day, or roughly 20 percent of global supply, sailed through the strait. Iran controls the northern rim of the strait, putting it in the best possible position to hold oil and gas supplies and prices hostage if it ever wanted to. The West’s general animosity toward Iran – and the possibility of spillover violence from the Israel-Hamas conflict – only adds to the uncertainty along this route.

China’s economy lives and dies by its ability to export goods cheaply to foreign markets. Hemmed in as it is by islands – many of which are loyal to the U.S.-led security alliance in the Western Pacific – China depends on the Strait of Malacca for its livelihood. Every year, some 60 percent of its total oil supply and more than 70 percent of its petroleum and liquified natural gas exports pass through these waters, cutting transit time by 40 to 90 hours compared to other routes. The strait itself opens up to the South China Sea, a hotspot of Chinese naval activity and military posturing meant solely to avail itself to other sea lanes. Naturally, this pits it against the United States, which regularly conducts freedom of navigation operations in the region.

The Panama Canal is as strategically important as it is economically vital. In connecting the Atlantic Ocean to the Pacific Ocean, it indirectly links the coasts of its primary supporter, the United States, and ensures the security of the Caribbean Sea. And unlike other chokepoints, the threat of conflict along the canal is low thanks to the understood support of the United States. The bigger problem for the Panama Canal is water shortages that have forced authorities to reduce transit. As the country enters its rainy season, efforts are now underway to build back capacity and increase vessel draft.

Footnote one:

Letter to Jamie Dimon:

Mr. Jamie Dimon
J. P. Morgan Chase

Dear Jamie:

Here is a summary of the problem the international banking system faces if the BRICS, Arabian and Russian producers cut off the oil that Washington has not addressed in the calculations of the dangers that we face which are not entirely of a military nature in the Middle East.

With best wishes.

David

David Lifschultz
THE LIFSCHULTZ ORGANIZATION
This email address is being protected from spambots. You need JavaScript enabled to view it.

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