A major war between the US, Israel and Iran.
So far, events are unfolding according to one of the worst-case scenarios imaginable.
The Strait of Hormuz has been blocked for nearly a month! With no progress toward reopening it. Logistics and supply chains are being disrupted.
Iran is destroying the oil and gas infrastructure of Middle Eastern countries! And this is the greatest risk to the entire global economy right now.
Qatar and Kuwait have already stated that it will take 2-3 years to fully restore their capacity (if the war ends tomorrow).
In the UAE and Saudi Arabia, oil facilities have suffered very serious damage!
All of this is pushing the world toward a real energy catastrophe!
Already, many countries (including those in Europe) are beginning to impose fuel restrictions!
Trump’s operation has gone down the drain. And now he clearly doesn’t understand how to end this war with dignity.
The old, deranged man is talking about negotiations with Iran (but 20,000 Marines are moving toward the Iranian coast).
The only thing Trump is trying to do is buy time and calm the markets before the next strikes on Iran this weekend.
It’s obvious that the Americans will attempt to seize the island of Kharg (Iran), where the country’s main oil infrastructure is concentrated. What will Iran do? That’s an open question…
For example, burn down all the remaining oil infrastructure in the Middle East? Why not?! I believe it.
Oil prices are skyrocketing. And this is the fastest rise in history. A global inflationary shock will begin to take effect in a couple of months… unless we take action right now!
All of this threatens to trigger a devastating global recession. The world has never before faced an energy crisis like the one that is bearing down on us at the speed of light.
Against this backdrop, many countries have decided to tap into their oil reserves to bring prices down but this is only a temporary fix.
Once again, the destruction of the energy infrastructure is a long-term symphony that will play out in a few months!
In 2025, that red-haired bastard waged a tariff war against the whole world and demanded that the Fed cut rates. We remember what happened.
In 2026, he plunges the whole world into an inflationary shock and demands rate cuts.
Powell will step down in May. Warsh will take over. It’s naive to think he’ll do anything right away.
The Fed will likely monitor inflation until the fall and make a decision then.
Our equation now contains a huge number of unknowns and a complete lack of understanding of what will happen next.
Goldman Sachs and Bank of America believe that a Brent price of $120 would destroy the entire global economy.
What are the world’s central banks doing?
Everyone has switched from shorting the dollar to going long!
From a soft or neutral monetary policy stance, virtually all major central banks on the planet are forecasting interest rate hikes! No one understands anything, and they’re just going to wait and see what happens next.
The uncertainty index is hitting every conceivable and inconceivable level. And right now, it’s at its highest point in history!
There’s some good news, too, in my view: in 2026, the Fed will launch a full-scale, powerful round of quantitative easing.
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