Too many known unknowns
At the end of the third week of the Iran War or Gulf Crisis, its expansion, damage to supply changes and neighboring economies have become devastating. Our job is to make predictions about the Turkish economy and politics, but without understanding how long the war might last, what its permanent impact on Gulf energy infrastructure and our trading partners might be, as well as what the physical-psychological effects on Turkey could be, it is impossible to do our job properly. The problem is that we frankly don’t know the answers to many questions relevant to our objective.
For instance, is Trump serious when he proclaims Iran operations are close to being wound down? If so, why is he sending two (or three, source disagree) marine contingents to the Gulf of Hurmuz? Will he dare order an invasion of the Kharg Island? Another example: is the recent statement by Iran’s new supreme leader Mojtaba Khamenei that the attacks on Turkey and Oman were false flag operations by the Zionist enemy true? Relatedly, could Turkey be dragged into this war directly?
Since we can’t just say “we don’t know” and shake our hands free off this one in a generation event, the politics author takes a first stab at this monstrous topic here in this report, which we shall venture to follow up with another one -- with illustrative macro forecasts -- late next week.
With macro forecasts planned for next week, the econ author reports very briefly on two topics only in this round, the February budget data and our latest estimates on CBRT reserves.
Now read on...
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