JERK REPORT #4 The economy runs on agreements, not laws

JERK REPORT #4 The economy runs on agreements, not laws

This week's signal started somewhere else.

Every issue so far tracked something inside the US economy. Jobs numbers. Tariff rules. Who gets laid off and who doesn't.

On February 28th, the US and Israel struck Iran. By March 3rd, the Strait of Hormuz was closed. Twenty percent of the world's daily oil supply stopped moving.

You saw it at the pump before you saw it in the headlines.

What most people are missing

The Strait of Hormuz was never guaranteed to be open. It was open because enough parties found it useful to keep it open.

That's not a law. That's an agreement.

Global trade is an agreement. The internet is an agreement. The dollar as reserve currency is an agreement. GPS. Container shipping standards. SWIFT — the messaging network behind almost every international transaction you've ever made. The rules-based international order.

None of these are laws of physics. Unlike gravity, they can go away overnight.

This week, one of them got stress-tested in public.

Here's what four layers of change tell you right now

Position

Oil is above $100 a barrel for the first time since Russia invaded Ukraine. Gas is $3.41 nationally, up 43 cents in one week. Diesel is $4.51, up 75 cents. Three AWS data centers in Bahrain and the UAE were struck by drones and taken offline. Claude went down for several hours. You may have felt it. I was teaching class and it was challenging.

Velocity

The Strait went from 70% reduced traffic to effectively zero in four days. Over 150 ships are anchored outside it, waiting. Repair vessels for damaged undersea cables cannot safely reach the Red Sea or the Strait right now. Both chokepoints. Simultaneously. First time in modern history. The rate of change is fast and still accelerating.

Acceleration

The supply chain isn't just oil. Semiconductors and batteries ship from Asia through this corridor. Pharmaceuticals from India. Petrochemical feedstocks, like plastics and rubber, come from the region itself.

Qatar supplies roughly 30% of Taiwan's liquefied natural gas. Taiwan's LNG reserves run about 10 days under normal consumption. TSMC, which makes 90% of the world's advanced chips, uses 9% of Taiwan's electricity.

That chain reads: Hormuz closed → LNG can't move → Taiwan power stress → chip supply tightens → your next hardware purchase costs more and takes longer.

It hasn't broken yet. Lead times will move before prices do. Prices will move before shortages do.

Watch your next supplier quote. That's your acceleration signal.

Jerk

The jerk layer is rarely a headline.

It's the thing underneath — the signal that changes how fast the acceleration itself is moving.

There are three this week. Each one changes how fast the acceleration itself is moving.

One. Repair ships can't reach damaged cables. Anything broken stays broken until the conflict ends. For businesses dependent on cloud tools or payment processing — outages that start as inconveniences can become multi-day disruptions. Not because anyone is targeting you. Because the repair window is closed.

Two. The administration is describing this as a targeted operation, not a war. Oil above $100, two chokepoints closed simultaneously, data centers struck, supply chains rerouting around Africa — those are war-scale signals. Business owners who wait for the official position to match the signal are making decisions a derivative behind. When the official position diverges from what the derivatives show, the gap between them is where the real risk lives.

Three. CISA is simultaneously managing furloughs, a management reshuffle, and a partial shutdown. The institutional buffer between Iranian-aligned hackers and your bank, your utility, your telecom provider is thinner than it was 30 days ago. You probably won't feel it directly. Your vendors might.

What this means for your business

Ask yourself which agreements your business is running on.

Not contracts. Agreements. The things you've never written down because you never thought they could change.

Some of them are holding. Some are quietly under pressure. Some will fail due to no one in the agreement’s fault. And some were always one decision away from changing.

The businesses that come through this period won't be the ones who predicted which agreements would hold. They'll be the ones who stopped assuming any of them were permanent.

Your five-minute practice this week

List three things your business depends on that you've never questioned. Pick the one that would hurt most if it changed overnight. Ask: is this a law, or is this an agreement?

If it's an agreement — audit whether it still holds. Whether the terms still work for both sides. Whether it needs to be renegotiated before circumstances force the conversation.

You don't need to blow anything up. You need to know which agreements are load-bearing.

If you want to go further

This week: Call your three most critical vendors. One question — what's your lead time today versus 30 days ago. Write it down. That number is your velocity baseline.

Ask your favorite LLM what your industry's exposure looks like to these disruptions. Not for the answer — for the questions it surfaces that you hadn't thought to ask.

Next 30 days: Pull forward any hardware purchase planned for Q3. Lead times are extending. Prices are moving up. Buy before both get worse.

If this extends past 60 days: Raise prices with an honest explanation. "Costs are up. Here's why. Here's the new rate." That's a relationship. Absorbing it silently until you can't is how businesses disappear.

Watch — not the headlines: Hormuz tanker traffic. When ships start moving again, the first and second order effects begin unwinding. That number is your signal to exhale.

The through-line

Issues one through three tracked signals inside the US economy. Each one looked like a specific problem. Each one was a stress test on an assumption.

This week names the pattern.

Several of the agreements the modern economy runs on are being tested right now. At the same time. By different actors for different reasons.

That's what jerk looks like at scale.

And the question isn't which agreements will hold. It's which ones you've been running on without knowing it.

View the interactive tracker

The JERK Report — designrosetta.com/jerkreport — Rose Thun, Design Rosetta