JohnnyBlue

Macro investor; author of literary fiction “Soul Like a River” ; jazz pianist; old-world wine connoisseur ; Global trade background

[JohnnyBlue @KindofBlueMiles]

@SCapStrategist Bro “real rates” are actually negative; do some homework; see that thing called inflation

[10Δ @_10delta_]

3 weeks ago I argued the US goal in Iran is to seize the global oil spigot. Venezuela in January -> Iran in February.

Neutralize every supply channel outside the dollar system within 90 days. Achieve a compliant successor government and complete energy dominance.

The oil thesis was the obvious layer. However, when you zoom out & view the last four years as a single sequence rather than isolated geopolitical events, the architecture of the grander US plan becomes visible.

1st was Europe, which laid the groundwork.

The Ukraine conflict provided the justification for sanctions that collapsed Russian pipeline gas from 150 billion cubic meters to 40.

Then Nordstream was destroyed, which rewired the entire European energy system permanently. The US went from supplying 28% of Europe's LNG in 2021 to 58% by 2025, exporting a record 111 million MTs, the 1st country in history to break 100 MT.

Europe was transformed from a customer with options into a captive market now purchasing its survival in USD.

2nd was Syria.

The fall of Assad severed the critical node connecting China's Belt & Road Initiative to the Mediterranean.

The trilateral railway linking Iran, Iraq & Syria, designed to bypass Western maritime chokepoints, was completely destroyed.

This isolated Iran geographically & cleared the path for what came next.

3rd was Venezuela.

In January the US effectively took control of the world's largest heavy crude reserves. The US Gulf Coast has the most advanced refining complex on earth, specifically built for heavy sour crude. Phillips 66, Valero & the rest are now positioned to process hundreds of thousands of barrels of Venezuelan crude daily.

The US captured a massive strategic reserve & solidified its position as the dominant exporter of refined petroleum products, an industry worth $110 billion in 2025 alone.

Venezuela & Iran were the two major oil supply channels that existed outside the dollar system. Both produce heavy crude sold primarily to China & evaded US financial supervision. Both now being neutralized within 90 days, which leads us to..

4th is Iran & the Middle East energy shock.

Israel struck Iran's South Pars gas field, the world's largest natural gas reservoir. Iran retaliated against Qatar's Ras Laffan, the single largest LNG facility on earth, responsible for a fifth of global supply. QatarEnergy's own assessment is that 17% of export capacity is gone and recovery will take up to 5 years. The Strait of Hormuz is closed. European gas prices spiked 70%. Asian spot prices doubled.

The only remaining scaled supplier? The United States.

If Iran falls & a successor government is installed that the US controls or influences (the Delcy model described weeks ago) then roughly 40 to 45 million barrels per day of global production out of 103 million is effectively under US control. OPEC becomes irrelevant because the US coalition is now the marginal producer. Now add the gas dimension & it goes beyond oil.

This war is solidifying the petrodollar system as it evolves into a hybrid petro/LNG-dollar. The old system was built on Saudi crude priced in USD. The new system is built on American crude plus American gas from the Gulf Coast, with no alternative supplier of comparable scale. The dependency is deeper because LNG infrastructure requires long term contracts & regasification terminals that lock buyers into supply relationships for decades. Europe & the Pacific allies (Japan, South Korea, Taiwan, etc.) cannot pivot away as there is nowhere left to pivot to. They're now locked into the US energy system.

The market confirms this. DXY went from 96 to 101. Gold down ~20% from its January all time high. Bitcoin down 20% on the year. Brent above $100. European & Asian institutions are liquidating precious metals and crypto to buy dollars because they need dollars to buy the only remaining scaled energy supply. The world is selling its gold to buy American energy in American currency. The dollar is now being weaponized through energy dependency.

The structural repricing is happening regardless of how the conflict resolves.

But the US grand strategy goes deeper..

Artificial intelligence is a physical industry. It runs on power and chips. Data centers require massive uninterrupted baseload electricity, primarily provided by natural gas. Semiconductor fabrication requires helium & rare earths.

By choking the Strait of Hormuz & crippling Middle Eastern LNG & helium production, the US is systematically degrading China's ability to power its data centers & fabricate semiconductors at scale.

The US is energy self sufficient, especially with newly captured Venezuelan reserves & expanding Gulf Coast capacity running on domestic gas.

On the other hand, China is import dependent & every joule it imports effectively now transits chokepoints the US Navy controls..

Iran was the Belt & Road's overland energy bypass, the corridor that allowed China to mitigate the Malacca Trap. With Iran neutralized that corridor is severed. China faces a world where its compute infrastructure competes for scraps on a depleted global LNG market, while American data centers run at full capacity on domestic energy.

Russia is next in the sequence. A post-war Iran reopening under US influence competes directly with Russia for the same refineries in China & India at lower cost. Iran's production costs are lower. Russia loses its last structural advantage in heavy crude & its economic lifeline. Additionally, under the Iran war cover, Ukraine has been opportunistically destroying Russian energy infrastructure & all signs point towards Russia being at the end of the line. The message from Washington becomes very simple: we dismantled two regimes in three months, your economy is about to get crushed, sign the Ukraine deal.

Then Trump sits down with Xi holding every card. Complete energy dominance. The hybrid petro/LNG-dollar fortified, Iran cleared, Russia cornered, & China facing the Malacca Trap fully closed with no remaining energy bypass.

Israel & the GCC are absorbing the kinetic cost of a conflict whose primary beneficiary, counter to the mainstream narrative, is actually America (First). Qatar offline for 5 years reprices the entire global gas market in favor of US exporters for the remainder of the decade. The Gulf states face years of rebuilding. Europe faces its 2nd energy crisis in four years.

Sure, the average American might face temporary moderate inflation & higher gas prices. But if you are the architect of the US empire & you view the rise of China & Chinese ASI as an existential winner takes all scenario, the collateral damage is acceptable cost.

Whoever controls the energy corridors controls the monetary system. Whoever controls the monetary system & the energy supply simultaneously controls the compute infrastructure that determines which civilization builds ASI first.

The US is seizing all 3.

[JohnnyBlue @KindofBlueMiles]

@htsfhickey Since when has the lame WSJ columnists trader mindset been obsessed with anything beyond 2 o’clock tomorrow afternoon;
first laugh … then, of course, gleefully ignore them

[JohnnyBlue @KindofBlueMiles]

@FlorianGrummes @FirstMining @FMSilverCorp @keith_neumeyer @MiningDiscovery @ResourcingTomo @KitcoNewsNOW “Your job is to buy the dip” - still applies

[Shanaka Anslem Perera ⚡ @shanaka86]

Everyone is covering the Hormuz crisis as a list of problems. Energy. Fertiliser. Shipping. Insurance. Each gets its own headline. Each gets its own analyst. Each gets modelled independently.

That is exactly why every model is wrong.

The crisis is not a list. It is a loop. And the loop is feeding on itself in ways that no linear framework can capture. Follow the chain.

Gulf sulfur supply is cut. Nearly half of global seaborne sulfur trade is Gulf-dependent. Without sulfur there is no sulfuric acid. Without sulfuric acid there is no phosphate processing. China sees its own phosphate production threatened and bans exports through August. Global phosphate tightens. Blended fertiliser costs spike. Corn economics collapse relative to soybeans. American farmers shift 1 to 2 million acres away from corn. Corn supply tightens. But the ethanol mandate does not care. The Renewable Fuel Standard requires 15 billion gallons of corn ethanol annually, consuming roughly 43 percent of the US corn crop regardless of price. Ethanol demand is inelastic. Corn gets squeezed from both the supply side and the demand side simultaneously. Corn prices rise. Feed costs rise. The protein cascade flips. US cattle herd sits at 86.2 million head, a 75-year low. Poultry and pork were benefiting from cheap feed. That reverses when corn crosses $5 per bushel. The entire animal protein complex margin-compresses. Meat prices rise. Food import bills for developing nations swell. Egypt, already facing $29 billion in external debt repayments, cannot absorb it. Pakistan, where debt service consumes a devastating share of tax revenue, cannot absorb it. Sub-Saharan Africa’s $90 billion 2026 debt wall leaves zero fiscal space. Sovereign stress worsens. The fiscal capacity for fertiliser subsidies erodes. Application rates fall further. Yields drop further. Grain markets tighten further. Import bills rise further.

The loop closes. And starts again. Tighter each cycle.

Now layer the channels nobody is modelling.

Iran struck a desalination plant in Bahrain on March 8. Kuwait depends on desalination for 90 percent of its drinking water. The Gulf holds 42 percent of global desalination capacity, co-generated with power infrastructure under active bombardment.

Australia imports virtually all its urea, two-thirds from the Gulf. Its entire heavy freight network runs on AdBlue, which is 32.5 percent high-purity urea. No urea, no AdBlue, no freight movement, no groceries delivered. A Gulf drone dictates whether Sydney supermarkets stock shelves.

Southeast Asian aquaculture, 68 percent of the world’s farmed fish, depends on soybean meal for the majority of feed costs. Soy is repricing as corn-to-soy acreage shifts alter the entire oilseed complex.

US cotton acres declining 3.2 percent to 9.0 million. Bangladesh imports over 95 percent of raw cotton and faces simultaneous synthetic disruption from the same petrochemical shutdown. The garment sector generating 85 percent of export earnings is being hit from three directions.

And underneath all of it: PE, PP, PET, aluminium, tinplate, glass. All rising simultaneously. Adding several percentage points to retail food prices through a channel no farm futures contract tracks.

The Fed meets tomorrow with core PCE at 3.0 to 3.1 percent and GDP growth deteriorating. Markets price at most one rate cut in December. The central bank that is supposed to stabilise prices is watching fourteen transmission channels reprice simultaneously through a single chokepoint it has no tool to reopen.

This is not fourteen separate crises. It is one system consuming itself.

Full analysis: https://t.co/iFmUcarGdV

[JohnnyBlue @KindofBlueMiles]

@grok @aimeespage @GoldTelegraph_ @grok which companies mine these

[JohnnyBlue @KindofBlueMiles]

@Macrobysunil A real nutcase

[JohnnyBlue @KindofBlueMiles]

@DangoteGroup @grok how many countries will Dangote connect via pipelines

[JohnnyBlue @KindofBlueMiles]

Numbers don’t lie

[Mohamed A. El-Erian @elerianm]

Please find below the monthly performance table for major asset classes.
Dispersion, one of my three core themes for the year, was on full display in February.
While global equity markets saw the S&P 500 and the Nasdaq slip into the red, those losses were offset by significant rallies in Europe, Japan, and China.
There was also a striking divergence between Gold and Bitcoin; while both saw double-digit changes during the month, they moved in diametrically opposite directions.
Meanwhile, Oil continued its steady c2026 limb, ending the month in positive territory.
#economy #markets #stocks #bonds #oil #gold #bitcoin

[JohnnyBlue @KindofBlueMiles]

@ekwufinance Not a “trade”, bro. Turn off your Bloomberg screen.
Only morons “trade”.
More like a long overdue monetary “reset”.

[Oguz Erkan @oguzerkan]

Software stocks have been in a free fall lately on mounting concerns about disruption by AI.

I have just published a 4,000-word essay explaining why AI won't kill B2B software, but kills their growth story.

You can read it below, no paywall:
https://t.co/L1KFt5CCjQ

[JohnnyBlue @KindofBlueMiles]

@TheStalwart @tracyalloway Enlightening interview

[JohnnyBlue @KindofBlueMiles]

@stoddeo @KevRGordon @carlquintanilla Wait … you actually “watch” CNBS

[JohnnyBlue @KindofBlueMiles]

@KevRGordon @LizAnnSonders The “world is eating software” - memba dat

[JohnnyBlue @KindofBlueMiles]

@PermabullNino @MySportsUpdate We “own” the flippin Falcons, bro. See the tape

[JohnnyBlue @KindofBlueMiles]

@MilesFranklinCo @ASchectman Oh great … Social media hog spouts the obvious

[JohnnyBlue @KindofBlueMiles]

@rodboone Yo peoples… jes let da coach “COACH” ! … for heaven’s sake.
Way too much “nitpicking” going on regarding an excellent young coach that we are fortunate to have here in da QC.
The future is bright.

[JohnnyBlue @KindofBlueMiles]

@UGAfootballLive Too bad; this season’s game up in Knoxville was one of the most entertaining football games of the entire college football year. “Gunna” pulling out pin point passes in the waning moments of that tilt was electrifying and kept everyone interested on the edge of their seats.

[JohnnyBlue @KindofBlueMiles]

@TheBubbleBubble @reneedek1 All are thieves;
If I were you … I wouldn’t cite them so proudly as some kind of authorities in these matters.
I mean … like where were they a year ago when the same macro dynamics were in play?

[JohnnyBlue @KindofBlueMiles]

@TheBubbleBubble Whatchu mean “could”, bro