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- [00:00]
A
All right. Good morning, Doug. Last time we talked, we said we didn't think that the market was pricing in what was happening in the Middle East. And then over the weekend, oil futures got as high as $120 a barrel. And then there was announced interventions on the part of the state where Scott Besant was going to take some measures. And Trump said the war, actually, we're almost done. And that seemed to calm the market back down, but turns out the war isn't over and it still seems like the market's not pricing in everything completely. What do you think?
- [00:38]
B
Well, the first question is, is it going to be a short war or a long war? And you'll recall that when he started the war, and of course, this is, I think the most salient factor about this whole dust up with Iran is that this is a, an unprovoked war. Again, you know, this is the, this is a war crime type of war. This is the type of thing that happened with Germany against Poland in 1939 or Japan against China. And I'm trying to think of other similar egregious examples. And that's exactly what the US Is doing. Nobody wants to admit it or wants to say it, but, and I'm not saying that the Iranian regime are good guys. I mean, they're, the mullahs are religious fanatics. I, I don't think that's true of the average Iranian. But, but how do we, how do we know what the, you know, and the other thing, who's the average Iranian? Is it the idea, are we talking about educated people in the big cities that, you know, they're Muslims and Muslims take their religion, they tend to take it more seriously than Christians do. But it's generally the people in the countryside that are really serious about their religion that. Are the Iranians really killing 30,000 people, as is being reported? I don't believe it.
- [02:19]
A
No, no, I think that, I mean, that figure, I've, we've heard all kinds of numbers. I've heard numbers higher than that. There's, I think the Iranians said that in that what I would describe as a attempted color revolution, that in total there were 3,000 killed. But of course that included security services too, not just the protesters. So, yeah, I don't think that number's real. But the truth is we can't really rely on any statistic that any government is giving us about anything at this point.
- [02:54]
B
No, we can't. Because it's very important to remember that the first casualty in war is the truth. It's all about lies. And people's memories are short. It's like In World War I it was, it was famous that the German soldiers were bayonetting babies in Belgium and that's what they actually said and people believed it. And then when the, when Saddam's Iraqis invaded Kuwait, they were, they were throwing babies out of incubators so they could bring them back. I mean, these are all lies. These were all just bald faced lies. But people believe in it. Some people still believe them. They probably still haven't been disabused of it. So. And, and the things that you hear about who, who the Ayatollah really was, I mean, yeah, a religious fanatic. But could you say that the Pope or most Popes are religious fanatics? I suppose you can. Doesn't mean that they're not civilized and well educated and thoughtful. I mean, so you really can't believe any of this stuff. The one thing that I suppose it's going to piss off a huge number of people, Americans especially.
- [04:16]
A
Oh, and people have already been very pissed off by this. We've lost lots of subscriptions to the, our YouTube channel because of our comments. I get all this stuff.
- [04:26]
B
Oh, I was going to ask you. Yeah. Do we have actual numbers about that or people. I hate you guys.
- [04:33]
A
People say that obviously say nasty things in the comments, but that's always the case.
- [04:39]
B
But no, they say we're on the payroll of the Iranians or what do they say?
- [04:44]
A
They haven't said that. Of course, Trump derangement syndrome is a common one that they say, you know, that we're. That were, you know, that even they're just repeating a phrase that they've been told. Well, you know, they've been chanting Death to America for 40 years.
- [05:04]
B
Yeah.
- [05:05]
A
You know, and I mean, obviously someone put that in your mouth and you're repeating some phrase. You know, those things are funny. So a lot of things like that. But yeah, people definitely don't like us talking about this at all. I mean, how dare you say it was a war crime for the US to attack Iran. It's not even a war. Our Congress didn't think it was a war. Trump says it's not a war. Well, he says it's a war all the time, but he says it's a special military operation. So how. It's not a war crime. It's not a war.
- [05:35]
B
It's a special military operation. Right, I know. And the same thing probably happened when we said that Putin was actually provoked into attacking the Ukrainians. I mean, you can't say that to know it's amazing. If you have control of the apparatus of the state and you're the government and people conflate the government with the country and our government's always good. It's, it's, it's kind of hopeless being a, an ancap or a libertarian, a free thinker, classical liberal in today's world, because we tend to talk to each other and talk to people that share the same views. But it's increasingly obvious to me that we're a teeny weeny minority. And when these things get dangerous and out of control, which I think this war is going to. That's my best guess at this point.
- [06:45]
A
And soon.
- [06:46]
B
Absolutely. It's actually dangerous to say these things. I mean, you've got to dummy up. Just like H.L. menan dummied up during World War I and, and World War II. I mean, there's just, there's just no percentage. And having the vast majority of people hate you and want to, and some of them want to kill you, frankly.
- [07:11]
A
Right. And I think what's going to happen between. If this is, you said questions, this can be a long war or a short war. I think it should be a long war. And if it's a long war, then I expect a massive psychological campaign on Americans to really get them on board with the whole effort. And it might be unimaginable today for people to think that. But, you know, this reminds me of February 2020, when if you're paying attention, you knew about COVID and you could see it sort of spreading in the world, but every American thought it was no big deal and they, or they certainly weren't afraid of it. And then one month later, the American public demanded that things get shut down. Like that's the psychological power that can be deployed against people. And I think we're going to see that and soon.
- [08:05]
B
And even to this day, people think that the government was right. Thought she was right about COVID I guess.
- [08:16]
A
Yeah.
- [08:16]
B
Yeah.
- [08:17]
A
Operation Warp Speed was a smashing success, Doug.
- [08:20]
B
Yeah, I forgot about that. Well, anyway, it's hard to know what's actually happening on the front because news from the front, well, truth is the first casualty. But the one thing I think we can be sure about from the facts we have, that we know our facts, is that this was an unprovoked war. Yes. Apparently lots of Iranians were chanting Death to America, but there were actually reasons why they had to dislike the American government. So you don't, you don't, you don't attack Somebody for using harsh language. I mean, that's, that's actually quite improper to do that.
- [09:20]
A
Right, right. It's like being in junior high and you know, a click of other kids doesn't like you. And so your thought is they must be destroyed?
- [09:30]
B
Yeah, yeah, pretty much. Well, and Trump said this war will be over in four days and then it's a week and now it's September. Yeah, right. So, and it's, and apparently the US is losing a lot of very expensive assets in the Middle East.
- [09:51]
A
Yeah, from what I've heard, it's the, the, the most amount of damage that we've suffered since like Pearl Harbor. You know, the, the, the 5th, the 5th Fleet headquarters in Bahrain apparently has been basically destroyed. I mean, facilities over in the Gulf that we've spent literally trillions of dollars building over the last 30 years there are becoming unusable altogether. And you know, well, we don't know, like information is questionable at times like this. But you know, I, I, I, I, I, I know that people in Dubai are trying to get the, out of there. I mean they are trying as hard as they can to get out. I know that from a personal contact and I also know that you could see the airport volumes when it, when it opened up and you know, the, it's just packed with people and they're trying to get out of there as fast as they can. So they're really close to the action and they're saying we need to get out of here.
- [10:55]
B
Yeah, well, and so many of these Gulf states are totally hooked up with the US Government. And the reason that the Iranians are attacking them is because there are U.S. assets there. So it's, you know, I'm not, I'm not trying to revive, defend the enemy regime. I just think this war is gonna, gonna end very badly for the US And I don't wanna see that happen. But Trump can't back out of it at this point because he's idiotically announced for a non war that we want unconditional surrender of the Iranians. I mean this is, it was a bad idea during World War II to have demanded that. And it's a worse idea in this case.
- [11:53]
A
Right. And there are in the, you know, I think in the 70s, you know, the oil crisis, I believe that was like a, you know, something like 6% of global supply was taken offline, something like that. And you know, obviously had major consequences for the US economy, but this is more like 20%. And the straight of Hormuz is effectively closed. There are ships, you know, attacked today that tried to go through there. They have allowed some like Chinese destined vessels, you know, to go through a couple, but you know, so 20% of it taken offline. I mean US is in a better position than most places for dealing with this. But you know, you can already see the early affected countries, what they're doing. You know, some, some are instituting price controls, others are rationing. Others, governments are telling their, their government workers like to only work four days a week or work from home in order to save on fuel costs. I mean this is only 12 days
- [12:59]
B
in, only 12 days in. I think it's going to get a lot worse. And what's really going to hurt things is the stupidity of these governments because you know, governments have, have to feel, governments feel that the people have to be made to feel that they're effective, they're doing something. If you don't do something, you're a do nothing government. And the government's supposed to be the cornucopia that saves you. So of course they're going to do price controls and rationing. And just as during the great oil crisis of the early 70s, the real damage was done by the US government's price controls and rationing, not by a cutoff of a bit of oil. They won't let the price go up because so this, this thing could go over the edge economically. Could happen to the stock market as well. Yesterday, I don't know. Have we recommended corn yet? The etf?
- [14:12]
A
I don't think that's gone out yet, but now you said it, so.
- [14:16]
B
Yeah, well I, I bought a bunch of corn that's an ETF C O R N and it looks like it's, it's turning into a very good trade. And I'm going to stay long because corn itself, the grain is actually pretty cheap in real terms at this point. And as fertilizer and ammonia is more than oil and things that come from oil that are being cut off crops will go down. So I'm doing that. I think people want to look at it because that's a commodity. Commodities are all cheap, but corn itself is one of the cheapest of them. And Also even at $80, frankly I think oil can be said to be. I thought it was reasonably priced at $60, but now it's only 80. So I might actually consider, of course we're long oil stocks like, like Petro and Echo petrol, which are out of harm's way and paid big dividends. But I think they're going to go higher. But I might Go long on oil ETF at some point here, too.
- [15:42]
A
Yeah. One thing that scares me out of the oil trade is that, you know, that the US is already besant was talking about intervening in the paper markets, at least to keep the price of it down. And that reminds me of COVID You know, like, I thought I had a great trade set up with it where, you know, with all essentially junk bonds, like, I thought those companies would be in real trouble, that held a lot of debt. And so I was invested in a fund that was short them, but then the Fed came out and was literally on the other side of the trade, literally buying those things, you know, so these things where they, if it gets into a crisis, you know, and the government is willing to do anything, I don't want to get caught on the wrong side of that trade again, I guess.
- [16:41]
B
Of course not. Well, it's a chaotic situation. It's a crisis situation that's going to get worse. And I just hope that, I hope it doesn't spin totally out of control. But the US keeps prodding the bear, so. And, and of course you're not allowed to say that this is really, this is really all about Israel. I mean, we really should make them our 51st state, kind of legitimize the situation.
- [17:21]
A
Yeah, well. And, yeah, and we talked earlier about how if you put in context everything that's happened since, well, you can pick a date, but October 7th, if you took that one. Everything that's been done in the Middle east up until now, it makes, it follows a, like a logical phased campaign, you know, to get to a point where an attack on Iran is logistically possible even, you know, so it, it seems like it's been a long planned, well executed campaign to get us to this point.
- [17:59]
B
Yeah, yeah. Well, we don't know what's going to spin out of control next. It's, it's like the Middle east is like a, a Rube Goldberg machine where you push one thing and something weird happens over there and that activates something else there. And we don't even know. We don't even know. We don't know. So.
- [18:24]
A
Well, here's, here's. Sorry, go ahead.
- [18:28]
B
I was just going to say the best thing for Trump to have done because, you know, got to remember when, when he was elected, it was to straighten out the US economy. That's what Doge was all about. Doge is a totally dead duck. It's kind of like opposite of Doge now with the spending with 500 billion more for the Department of War. And hiring, hiring back lots of government employees that were fired. No, no agencies like the Department of Education or Aid were actually abolished. So yeah, Trump is, look, I don't have Trump derangement syndrome, okay? I was so happy that he won instead of Kamala, but I guess Kamala could be worse. But you know, Trump is, Trump is acting like a big man. He thinks he's Mussolini, he thinks he's Peron. He's the guy that can solve all these problems for the US and the big problem is that the US Is already a bankrupt empire with giant amounts of debt. So it's, it's a pity.
- [19:44]
A
What's the. What, how do you think that this could impact, you know, your typical person in the US at this point? Like what, what should they be watching out for?
- [19:56]
B
Well, a few years from now they're going to be cutting Social Security benefits for people that think can afford it. They're not going to be raising them for everybody else. I don't know what they're going to do about Medicaid and Medicare, which along with Social Security are the biggest parts of the US Government by far. What are they going to do about that? I think what's going to, what's going to wind up happening is they're going to try to keep the stock market up because God forbid pension funds and people's HR10s or 401ks. Yeah, yeah, whatever. If that stuff goes down, that's. I don't think they can stop the bond market interest rates from going up. So that's another thing I would be, you can buy an ETF which is short interest rates. I think that would make a lot of sense. Interest rates are eventually, and eventually is not the long distance future are going back up to where they were in the early 80s. 15, 20% is what the US government was paying. They didn't pay quite 20% was about 18 and something. So that's going to happen too as the dollar loses value. So they can't do anything about that because what about, what about, what about
- [21:20]
A
short term impacts related specifically to this conflict in Iran? I mean like we see, you know, price controls and rationing around fuel. You talked about fertilizer being a large percentage of global fertilizer being cut off and the feedstock for a lot more fertilizer being cut off. So food price is probably going up. What about in. In general? Because the underlying, you know, feature of global trade is global energy. Right. So you know, our supply. What about supply chains getting screwed up, you know, because of all this you know, I mean, could that, could that.
- [22:02]
B
Yeah, that could happen too. You know, and this kind of reminds me that there was an Iranian frigate, I believe it was a frigate, although I heard it was a corvette, which is the next step down, my frigate. I mean, it wasn't like a big boat, but it had about 150 crewmen or people riding on it. And a US submarine sunk it. I mean, I don't know.
- [22:32]
A
Off, Off. Off the coast of Sri Lanka. Yeah.
- [22:36]
B
Yeah. Well, that's, that's really kind of worrisome. Were you. Anyway, I'm sure, I'm sure they had it coming.
- [22:49]
A
Yeah, I guess. Yeah. But. Yeah, you know, but I mean, we've started to see. So we saw, we've seen seizure of, of ships, you know, the dark fleet ships by the US Already. We saw them blowing up those, what they called drug boats. Never had to substantiate it at all. And then.
- [23:08]
B
Totally. I'm sure some of them were, no question. But that's not the way you do things. I mean, if you can blow up the boat, doesn't it make more sense to pull it over and capture it if you know it's there and find out what the case is instead of. And this is. I think Trump is really. Trump is actually deranged. I think he's gotten scary. Although I got to admit, when I listened to him speak, I think he, he's funny. He does most that it's possible for a human being to do with the 500 words that he uses in his vocabulary. That's no more than that. But he strings them together. And I enjoy listening to him just, just because he, he was. I'm trying not to get involved in this stuff, but.
- [23:56]
A
Yeah, I mean, he's, yeah, he's, he's, he likes the attention when the cameras are on. He's, he's like a standup comedian.
- [24:07]
B
Yeah, he's good. And I understand why, you know, people like him. I, I don't just actually, I don't dislike him. Might get a little bit tiresome because he's got to be the center of attention. But, you know, I wouldn't mind having a beer with them, but I couldn't even remotely feature having a beer with any democratic politician, God forbid. Kamala. No, actually got to get the pronunciation right.
- [24:33]
A
Right, right. Yeah. I just, There was. I did see some other headline too. You know, you remember that around the Panama Canal, the, On either side of. Was a Chinese company that ran the port facilities there. And I don't know if you saw this. But the Panamanian government or Supreme Court there declared somehow that it was illegal for them to be running those port facilities. And so is it Maersk, the company Denmark, as Michael Yan says, you know that the country that's owned by Maersk Denmark.
- [25:14]
B
Yeah, right, yeah, but Michael says Denmark should be pronounced Denmark, not Denmark.
- [25:20]
A
Right. So but now they have it. They, they control it. But then I heard, but so in response the Chinese Costco, which is like the largest global shipper, has ceased operations around the Panama Canal. You know, and so anyway I just, you just see this like all the global connections are just being severed piece by piece. The basic systems of trust, you know, that you could, you, you know when you're in international waters, you're, you're not going to be blown up by a submarine, you know, when you know or that you know the, I mean when you're flagged legally that you're not going to be boarded by and seized by a foreign government. You know, all those, so all of those norms are gone and then you know, then these, you know, these, you know with the Strait of Hormuz being closed with you know, gravity getting total control over the Panama Canal. I mean it really does seem like we're, I mean there's, it's just law of the jungle now and there's a girl power struggle.
- [26:33]
B
Well and even in, in Europe which is increasingly a non factor for absolutely anything. I mean there industries closing down. I mean their governments are actually criminally, criminally insane. But even they are doubling their, their war budgets. And that's the problem when everybody is being encouraged and actually is doing it, building weapons and all this type of thing, it threatens somebody and you have all those weapons, you feel like you got to use them, can't let them go bad, waste the investment. So yeah, we're heading towards a much more serious war. So I feel, I feel happy having, having a crib here. I'm in Argentina at the moment. Just came across the mighty Plate river by ferry yesterday. Fortunately US submarines or nobody sub river so I felt pretty, pretty safe coming across. But yeah, it's, I think you really want to have a. With I've always said this for decades. You want to have a crib someplace else in the world just in case, you know. And it's enjoyable and it's broadening economically and financially and blah blah, blah. So we're actually coming up to the hour when this is all happening right before our very. I think this is the biggie coming up my guys.
- [28:09]
A
I think it's, I Think it's the big one too. And I think, I just think, as if you're an American, it's better to wake up to this. There's going to be a point, there's going to be like that toilet paper moment during COVID where everyone's going to realize there's a crisis and they're going to like, you know, do whatever they can then to prepare themselves. And it's better to panic early with these things. I think there's going to go fill up your gas tank, you know, I mean, do some basic things just to make sure you're set.
- [28:46]
B
That's right, panic. Panic now and beat the last minute rush. And remember, Trump is entirely capable of, of putting on price controls or rationing or got all the marvelous things that the US Government can do for its benefit, not necessarily for the benefit of the people. So you should plan on that now before we're in full, full blown war mode.
- [29:13]
A
And that's, it's, the people will wake up like one day the news will tell them now it's a crisis and then they'll believe it and they'll act like it is. And so right now the news is still saying, the mainstream news at least is still saying everything's, you know, it's going okay. You know, we're winning. We've already won. We, we can, as Trump says, anytime I want it to end, it will end.
- [29:39]
B
Right? Yeah. In, in his, in his dreams. Right?
- [29:45]
A
Exactly.
- [29:47]
B
Once the cat's out, once the cat's out of the bag, it's like, yeah, anytime I want to put that cat back in the bag, I can, I can do that.
- [29:54]
A
Yeah. Good luck. Yeah, I wish it were that simple. But so, yeah, panic early, I think just. And I, you know, I also think if you assume this is a, a war, the war with Iran is the way they see it is existential. That know, is there someone's trying to destroy them and what might they do in response? And I think you should, you know, prepare yourself for that. Like, we've heard about the, the cyber capabilities of Iran for a long time, you know, and I, whether they're true or not, I mean, I wouldn't be surprised if there's a significant cyber attack in the US in response to this false flag or real. I mean, I, I just think you, you like it will, this is going to reach out and touch you wherever you are.
- [30:44]
B
Yeah. And so far the Iranians have been very constrained. They haven't launched a cyber attack against the US that would really bump the war Up a lot. And I don't doubt that Trump would use a nuclear weapon. Oh
- [31:07]
A
yeah, I think so too. As soon as Americans start, get hurt and are afraid enough that they demand it. Yeah, they will.
- [31:15]
B
Yeah. Yeah, exactly.
- [31:19]
A
So anyway, I just, just prepare for like the. I know no one takes it seriously, but I think you, yeah, the Americans around you won't even, you know, take it seriously at all. But that's, that's the time to be, be early to it all. I mean, in February I went in, in February 2020, I went into my kids private school and talked to the head of school and I said, ask them if they'd heard of this Covid thing. And they hadn't, of course. And I said, I told them your school is going to close, like it's going to close. And a month later the school was closed. It like the attitude of everyone around went from nothing to oh my God, within a month. Yeah, I feel like maybe this won't be a month, but it's gonna be something like that.
- [32:01]
B
I know. It was unbelievable. And then people were painting little dots every six feet from each other where you had to stand in lines and wearing masks when you, the restaurants were still open. You wear your mask until you sat down at your table. Then you could take your mask. The stupidity and the mass hysteria of it was amazing. And we'll see the same thing again. So one thing I'd like to ask those who have stuck with us is if they ask any questions is I'd like some boots on the ground if you talk to your friends. What does the average American out there think about all this stuff? I mean, just ask questions of a few of your friends and bring some data back to the conversation on Friday because I, I'd love to hear what the average NPC out there. Thanks.
- [33:01]
A
Yeah, yeah. Please post in the comments. I'll get them all organized so that I can talk to Doug and I can talk about them on Friday. That sounds great.
- [33:09]
B
Yeah, I love to have some boots on the ground. Examples. When you ask somebody what they think about all this stuff, what they say, don't argue with them. That's always a mistake. But do ask, you know, questions because you want to find out.
- [33:23]
A
Yeah. And are people in general even talking about it?
- [33:26]
B
Yeah.
- [33:27]
A
Is it even a subject of, you know, conversation?
- [33:30]
B
I can't wait to get back to the US and probably May, late May to find out. Find out what, what people are thinking.
- [33:42]
A
You'll be just in time for the cyber attack, Doug.
- [33:44]
B
Yeah. And just in time for foreign Exchange controls or travel controls or something like that, so. Oh, well.
- [33:54]
A
Well, and keep in mind one other thing. It's just if you're looking at timetables, is that as of NO later than April 1st, every state in the US will have a rapid reaction. A National Guard force that can be deployed within eight hours to anywhere in the country.
- [34:13]
B
Wait a minute, is this some kind of a law ruling or something like that? I hadn't heard about it.
- [34:17]
A
It's an order that was issued. The first time I saw it was, I think in December. And, yeah, the official date is no later than April 1st.
- [34:27]
B
Oh, incidentally, talking about dates and times, I thought one of the. One of the reasons that I supported Trump, well, insofar as I supported him, was that I thought that I thought he was going to get rid of Daylight savings time, which is just a really stupid inconvenience. And we haven't heard anything about that. That's something positive. He could have. I mean, that won't happen.
- [34:53]
A
I was persuaded by the income tax eliminating or. Or the IRS or the Department of Education.
- [35:01]
B
Oh, oh, yeah, all that stuff. No, that's. Yeah. Launching an attack against Iran is much more important. Just like Vietnam. The average American knew absolutely not and still knows nothing, absolutely nothing about Iran.
- [35:19]
A
They're going to find out more and more though it soon. I think.
- [35:23]
B
War. War is. War is nature's way of teaching Americans geography.
- [35:28]
A
Exactly. All right, Doug, well, we'll leave it there. And, yeah, please give us your feedback from your peers or friends or people you encounter, what they think about the situation in Iran and the Gulf, whether it's a topic conversation and just kind of what people's views are. Yeah, we'll talk about on Friday. All right, thanks, golfer.
- [35:48]
B
The Arabian Gulf, not the American Gulf, which used to be in the Mexican Gulf.
- [35:53]
A
Right, of course. All right, thanks, Doug.