Mini-crises sparked by the Iran war may add up to a big collapse

The global economy and financial system are facing a prospect of multiple mini-crises due to the conflict in the Middle East. These mini-crises, affecting energy, inflation, trade, and global growth, may collectively lead to a massive crisis. Experts, including Eswar Prasad, professor of trade policy at Cornell University, have expressed optimism about the economy's resilience, citing its ability to withstand significant shocks like broad US tariffs. However, this view may not capture the full picture, as the cumulative effect of multiple mini-crises could be more severe. The conflict's impact on global demand, investment uncertainty, and the financial burden on Europe and Asia are potential factors contributing to a generalised crisis. The risk of a collective collapse is being acknowledged, with some warning that the US may emerge as the only real winner economically in a war that it, together with Israel, began.