A 30-year fixed mortgage in Switzerland today runs about half a percent.
Jeffrey Currie, former global head of commodities research at Goldman Sachs, points to that number as proof of what a TRUSTED currency buys a nation, and why Hormuz has become a wager over the dollar itself.
The deal dates to Bretton Woods.
The world trades in dollars recycled through New York, and in exchange the US Navy guards the sea lanes, everyone's sea lanes: even a copper shipment from Chile to Shanghai sails under American protection.
That bargain funds the exorbitant privilege, an America consuming 7 PERCENT more than it produces because the world happily holds its currency.
Walk away from Hormuz, Jeffrey argues, and the bargain snaps in public.
Every strait on earth absorbs the precedent, the Fifth Fleet's exit from Bahrain becomes the symbol, and his search of history comes back empty: no hegemon pushed off the water has ever remained the hegemon.
The last time the job sat vacant, 1920 to 1945, the world produced two wars.
Looking across Hormuz, the Red Sea, the Caspian and Russia's burning refineries, he said it plainly:
"I don't want to use the term World War Three, but we're in it."
This war prices in barrels. The losses, if it breaks wrong, arrive in dollars.
@CommodMkt
