Geopolitics and politics taking center stage as the trading week kicks off.
Capitol Hill is adjusting to a sudden shift in the legislative balance following the passing of South Carolina Senator Lindsey Graham and the prolonged absence of Senator Mitch McConnell and in the Middle East tensions are rising following several rounds of US strikes in Iran.
Conflicting declarations remain over the critical Strait of Homs with President Trump stating this morning that the US will probably take over the strait.
And over in the UK and the B is preparing to take power and also exploring powerful fiscal overhauls that include public utility control and a potential land value tax.
Well joining me way in this morning is Patrick young chairman and founder of exchange that Patrick great have you on the show.
Thank you so much for joining us.
So a lot to cover.
This morning, let's start out with the Middle East.
The US and Iran issuing totally conflicting reports on whether the strait is actually open or closed to commercial ships.
So based on what you're seeing right now, what is the actual situation in the water and how is the geopolitical risk affecting Washington's legislative priorities right now?
OK, so clearly what we've got at this juncture is a completely closed trait of Hormuz to commercial traffic right now, but an American regime amongst other allies who are desperate to get it open, and that's going to impact not just the numbers for TSMC in the next quarter as you were talking about their glorious 36% profit rise, but the entire world, because this is the season when we need to refill our gas reserves in Europe ahead of the winter and of course 20% of.
LNG is going through the Straits of Hormuz.
What have we got here?
Well, in many ways it looks like that old logic puzzle, you know, the immovable post and the unbreakable cannon.
But the truth of the matter is that it might be a bit sapped for resources at the moment, but ultimately with enough armament, nobody is going to be able to manage to take on the USA sooner or later.
That could involve mass suffering, of course, which is absolutely tragic for the people of Iran per se, but we're seeing.
Movement everywhere.
Look at even the UK today where it just landed in London.
They have actually taken steps.
They're going to be proscribing the Iranian Revolutionary Guards Council.
That's a good move because it basically allows terrorists to be labeled as terrorists.
And of course the IRGC are setting up for their Alamo.
It's their last stand.
But the difference is in those days you had a couple of wagons and all sorts of cannons.
Nowadays you're up against them.
Of the US Air Force, and as we know, the US Army has got more resources than pretty much all of the rest of the world put together.
So, conflicting statements, they may be conflicting at the moment, but sooner or later they're going to be homogeneous because we're going to see American, if they put enough firepower in, succeeding.
And if not, we're going to see some sort of capitulation from the Iranians because ultimately the regime is already in difficulties on the ground.
Yes, and Patrick, there are a lot of moving parts here.
We're just coming off the NATO summit that happened last week.
It does feel as though several weeks have passed, but in reality it was just recently, and tensions are heating up again.
Last week, the Treasury Department revoked a waiver permitting Iranian oil sales, and here in New York morning trade were Looking at WTI as well as rent prices climbing higher.
So although there is a heat wave in many parts of the world right now, we are looking ahead to winter and we are paying attention to the pain at the pump here.
So how does the price of gas fit into the equation as a possible resolution or sticking point?
Of course it's got to be a sticking point.
We're in the middle of American driving season.
During the course of summer, people want to be able to drive as far as they possibly can and they often don't manage to buy themselves Chinese electric vehicles yet as the rest of the world seems to be doing.
But of course, seriously, what we're looking at here is Trump has been riled.
Trump has made him, I mean he's been made to feel as if he's being humiliated by the Iranian Council.
We don't really know who's running Iran in terms of a particular.
Person, but we know that the IRGC are the people behind whoever happens to be the front man of the week.
Ultimately that system is going to have to be broken down before we're going to get more stability to oil and gas prices.
Is that going to impact the Straits of Hormuz going forward?
This is going to be a critical fortnight because the USA really needs to make sure that it has managed to indelibly take control of the opportunity for shipping to flow because otherwise.
It's not just about the gas, it's not just about the oil.
It's about all the ships that are currently wrong, slaughtered at the wrong end of the Strait of Hormuz.
Because that has big issues for the supply chain.
Because don't forget, September, October, that's the time people need to get their stuff into shipping in order for it to be available for the Christmas shopping season, for Black Friday, for all of these sort of semi religious organizational events that the United States of America, the world's greatest economy is built upon.
Yes, and I do want to shift our focus on back to the US here, to the nation's capital, and in particular to look at the digital asset market and also clarity.
So with Senator Graham's passing as well as Senator Mitch McConnell out on a multi-week medical absence after a fall which did lead to a mild case of pneumonia, we're paying attention to what we can expect ahead of the midterm elections.
So how vulnerable is the Republican Party's leadership structure right now?
Look, I think there's more to be talked about in the short term.
At the moment, the fundamental problem is we've got 3 weeks for the US government to pass bills before it starts into the summer break up.
And it doesn't look good, because they need to get 60 senators for various acts.
And actually, the Clarity Act is not only a secondary or tertiary level of importance compared to other items on the priority list of the GOP.
That is obviously made much more difficult.
Mitch McConnell is out, as you say, he's been seen, he's visible, he seems to be recuperating, thank God.
But unfortunately he's not going to be appearing in the course of the next few weeks.
Tragically, Lindsey Graham died at the weekend, and that gives us a huge problem because suddenly the Republican Party is on 51 senators maximum.
It needs to get 60 senators in order to manage to get through the various.
Votes that are currently blockaded in the Senate and it's looking increasingly unlikely that it can do that.
Now moving further forward, obviously one of the issues is that we're going to see therefore a special election in South Carolina, understandably because this has come before the threshold cut off for nominations for the Senate going forward.
So that's obviously going to be an issue even if Mitch McConnell's going to be able to carry on to presumably and hopefully a full term for him in reasonable health.
So there are various issues for the, the GOP to look at at the midterms.
But then again, on the other hand, you know, the Democrat Party just squandered the opportunity to take May by fielding what was a hideously inadequate and rather horrendous candidate.
So neither party is particularly playing a good ground game in terms of what's warming up to be the midterms.
Everything to play for, but quite feasibly, the Senate will remain Republican.
Looks as if the house may tilt towards the Democrats.
Either way, are we going to see 10 Democrats cross the House floor and say we support crypto bills, like clarity, because we've seen the president and his entourage being hugely enriched by crypto.
I think that is very difficult in terms of rail politic, regardless of what we might think of fintech advocates.
And Patrick, we have less than 60 seconds here, but I do want to squeeze in a question about the UK.
So Andy Burnham is set to take over 10 Downing next week with plans to merge the budget and tax revenue.
So why is this important for US investors to keep an eye on?
On Wednesday evening there's going to be a football match, semi-final of the World Cup.
You may have forgotten about it, America, because of course you got knocked out I think last week or something.
I have no idea actually.
But it's going to be Argentina against England.
What's the big difference at this point in time?
Who cares about the football?
I don't know the first thing about that.
But Argentina is in resurgence mode.
It's got a proper pro free market presence.
Who wants there to be liberty, prosperity for all.
And in the UK they've got Andy Burnham, who's continuation of the failed politics of the last 30 years.
What can we expect?
More taxes, more disaster, more fiscal zone issues for the United Kingdom, as it tries to become where Argentina was in the 1970s.
Well, Patrick, we will have to leave it there for today, but thank you as always for joining us and thank you so much for your commentary as well as all of your insights.
