President Donald Trump’s decision to join Israel in its war of aggression on Iran has not only failed to achieve its political aim, but for the United States and the world economies, the financial fall out has been a disaster, which, if conditions continue, will only intensify.
Although the United States is a net exporter of oil and natural gas, restrictions on Persian Gulf energy flows will still negatively impact the American economy.
According to a Business Insider article by Jennifer Sor, Goldman Sachs projects that if the Strait of Hormuz remains closed and energy flows do not return to prewar levels, higher oil prices could result in the loss of approximately 10,000 U.S. jobs per month, pushing the unemployment rate to 4.6% by the end of the year. *
In addition to job losses, the reduction of Persian Gulf energy will also mean an uptick in “inflation,” squeezing consumers. “Higher oil prices,” Sor reports, “could push up the prices of other goods and raise inflation – but the fallout could extend much further, given that consumers are likely to pull back spending in other areas, hurting growth and potentially causing hiring to slow.”
Goldman Sachs, along with much of the financial press, academia, and many among the alternative media, misunderstands what inflation actually is. This discredits their analysis. Whether this is intentional to mislead or stupidity is hard to say.
Properly understood, inflation is an increase in the money supply; the rise in prices is the result of inflation – money printing. Thus, higher oil prices due to supply shocks do not cause overall price increases, even though energy is a critical component of production.
Under a stable money supply – such as a gold standard – an exogenous price shock in oil would not raise the general price level. Instead, higher spending on energy would simply mean less money available for other goods and services (home remodeling, dining out, clothing, etc.). This would result in a redistribution of spending toward the energy sector and a reduction of income allotted to other goods – the overall price level would not increase.
The rise in overall prices results from the Federal Reserve’s continuous expansion of the money supply primarily to finance massive government spending through debt monetization. Policymakers have long blamed oil price shocks for rising prices since it diverts attention away from the real culprit: money printing.
With continued monetary growth, Americans face a double whammy of job losses and rising prices – stagflation. Under a non-expansionary monetary policy, hikes in oil prices would lead to a fall in prices in less energy-dependent sectors. This is what occurred to a large extent during the Great Depression of the 1930s. Despite mass unemployment, prices across the board tumbled which mitigated, somewhat, Americans’ economic suffering.
This is not to say that higher oil prices will not adversely affect the economy. They certainly will, but not in the sense that most commentators assume.
Significant increases in costs without viable alternatives will force many businesses to curtail output. Companies cannot simply raise prices without affecting consumer demand which in turn lowers revenue. Lower revenue leads to less hiring and ultimately job losses. While the extent of unemployment is difficult to predict, one thing is certain: the longer the Iran conflict lasts the greater job losses will be.
Rising fuel prices will lead consumers to cut back on non-essential purchases significantly affecting industries such as leisure and hospitality. Goldman Sachs predicts that this sector could lose up to 5,000 jobs per month through the end of the fourth quarter.
Furthermore, higher oil prices will reduce personal savings, which are already at historic lows. With more income spent on essentials such as energy and food, Americans will have less for savings as more and more households will live paycheck to paycheck than ever before.
As bad as Goldman Sachs’ prognostications are for the American economy, nations more heavily dependent on Persian Gulf energy imports will be worse off. Europe, which has insanely cut off Russian energy due to its support of Ukraine, has only itself to blame, while a number of East Asian nations are seeking deals with Iran despite U.S. sanctions.
Despite opposition among a number of his political and military advisors as well as the enormous economics risks to the United States and world economies, Trump proceeded with the war. The primary reason, rarely acknowledge in mainstream outlets but widely discussed in alternative media, is that Iran stands in the way of the Greater Israel project which seeks to establish the Jewish state as the dominant power in the Middle East. All other stated justifications for the war – such as Iran’s nuclear enrichment, ballistic missile capabilities, and U.S. support for protesters – are merely diversions.
Until Israel and its U.S. lackey renounce the Greater Israel project, Americans and the rest of the world will suffer severe economic consequences.
*Jennifer Sor, “Goldman Says the US Could Lose 10,000 Jobs a Month This Year as the Oil Shock Ripples Through the Economy,” Yahoo Finance, 26 March 2026.
https://finance.yahoo.com/economy/articles/goldman-says-us-could-lose-170635983.html?guccounter=1
Antonius Aquinas 