← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
The Analyst Who Predicted The Iran War 2 Years Early Just Told Me What Happens To The Dollar Next | Tom's Deepdive
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If you have dollars in your wallet, just know that money only has value because of oil. And right now the US is in danger of getting tricked into a protracted ground war with the very country that that controls the flow of a huge chunk of the world's oil. If that happens and they lose, the money in your wallet becomes worthless and the American empire dies not with a whimper, but with a bang. At least that's what one of the most viral analysts on the Internet, according to Google Trends, told me yesterday in a long form interview. Despite being almost entirely unknown just a few months ago, this analyst had has gone hyper viral recently for predicting that Trump would attack Iran. And I don't mean that he made that prediction after Trump, Bond Fordeau, or even after he started sending troops to the region. He made that prediction back in May of 2024, almost two years ago, before Trump was even re elected. He stood in front of a camera and his students and mapped out Trump's reelection and and the fact that he would inevitably launch a war against Iran. With uncomfortable precision, he laid out the justification, the trap that's waiting for Trump, the unraveling of an empire, and more beat by beat. His name is Professor Jiang and the reason he could see all of this coming when almost nobody else did, is that he's using a very specific framework that you're going to want to understand that has led him to some startlingly accurate conclusions. In five parts, I'm going to break down this framework. The stark economic thesis that predicted this war, its potential outcome and what comes next, as well as who the winners and losers are likely to be and how you can prepare yourself for what's coming if all of this comes true. Now, if you're like me, Section four is going to make you mad, but it's worth understanding if you want to know what's going on and how to position yourself to win. Welcome to part one. The framework that predicts the future. In May of 24, Professor Jiang's lecture predicting this war had fewer than 1,000 views. When the bomb started falling on Iran, however, it went to a million views in just 72 hours. The world suddenly needed to know, how did this guy see this coming? Jiang's framework combines three game theory, historical pattern recognition, and something he calls predictive history, something that he borrowed from Isaac Asimov. Namely, that large scale human behavior follows structural patterns that repeat across centuries. Not because people are predictable, but because the economic and geographic forces acting on them are. Strip away the personalities, the ideology, the news cycle noise, and you can see where things are actually headed. That's how he called this war two years early. And that's the lens that we're going to use right now. And our first stop is 1971, when Nixon cut the dollar loose from gold. The dollar should have collapsed, becoming just another fiat currency drowning in its own debt. But it didn't. Instead, it was saved by one of the most consequential backroom deals in modern history. A one, two punch that rewired the entire global economy and kept the dollar indis not by law, but by structural necessity. The new system has a name. We call it the Petrodollar. And Iran is the country that sits on top of the one geographic choke point that can bring the whole system to its knees. And that's why every time you turn around, a US President, not just Trump, is saying, we have got to do something about Iran. When you've got a madman that lives on the same street as your company headquarters and he's constantly waving a gun around, threatening your livelihood, odds are you're gonna feel some type of way about that. And when the only policeman in the world is you, you're going to be tempted to act, even if it needs to be violently, to ensure business remains good, the company stays open, and your dollars keep flowing. That's what this war is actually about. And once you understand Iran is the madman at the end of the street and you see it through that lens and everything. The bombing of Fordao, the ships in the Strait, the desperate scramble for a victory that keeps not arriving, all of it, everything snaps into focus. Here's how the Petrodollar actually works in practice. The Gulf States, Saudi Arabia, the uae, Kuwait and the rest of the GCC nations, they sell their oil exclusively in dollars, which means every country on earth that needs energy has to acquire dollars first. Every country needs energy every day. That Structural demand is what keeps the dollar positioned as the world's reserve currency, even as America runs deficits that would have collapsed any other currency on Earth. And crucially, those dollars do not just sit in vaults in the Middle East. They get put to work in the economy all over. The Gulf states take their petrodollar earnings and invest them. And for decades, the most promising market in the world was the US Market. And the safest bet, the thing literally known as the risk free rate of returns, is US treasury bonds. So the GCC countries poured money into US Treasuries, creating a near endless demand for US debt. And when the rate of return went too low, the money flowed into US Equity markets. And recently, that money has been specifically flowing into US Artificial intelligence infrastructure. And it flowed in, in massive quantities. When Trump came back from his Middle east tour early in year one of his second term, he announced to much fanfare that he had secured roughly $2 trillion in Gulf investment commitments to the United States, something that the Gulf states have been doing anyway, but they know to package it up as a gift. The overwhelming majority of that money was earmarked for AI data centers, chips, the physical build out of the AI economy. That means that two of America's most important economic pillars, the petrodollar and the AI infrastructure investments that we're banking our entire future and economy on, are tied to money created by oil tankers flowing through the Strait of Hormuz. I hope it's all starting to make sense now. The very place being threatened by the theocratic regime that waves its guns around at the rest of the world screams death to America and desperately wants to disrupt the growing relationship between the us, Israel and the GCC countries, something that has only been growing stronger with the Abraham accords, hence the October 7th attack. Prior to Trump, everyone had been willing to accept the fragile stability in the Middle East. Keep your head down, keep the dollars flowing. That was the mantra. You can sanction Iran, but otherwise leave them alone. But Trump just couldn't leave well enough alone. Whether because he really feared them becoming nuclear and taking control of the Strait, or because he was feeling himself a little bit too much after Venezuela, or because Israel wants a war between Gog and Magog. More on that later. Or something else entirely, Trump decided to launch the war. And history provided us with a swift reminder that the only law of history is the law of unintended consequences. And thusly, the Strait of Hormuz was immediately shut down, not by Iran, but by the insurance companies who feared Iran would attack the Ships. And they were right. Make no mistake. This is why Iran has always been the pressure point. Iran doesn't need to beat the United States military to win this war. All they have to do is make the Strait unusable. Mines, drones, missiles, asymmetric warfare that doesn't require a navy. Just chaos. Disrupt the Strait and the oil stops flowing. The petrodollar cracks, the Gulf states panic. And that $2 trillion that was supposed to fund the American AI economy, it goes into defense instead. Here's what Jiang's framework showed him that so many other people missed. The growing alliance between Iran, Russia and China create an existential danger to the U.S. especially because right now, the U.S. is a declining empire. And when you combine that with the incentives facing Iran, plus the incentives of Israel and Saudi Arabia, it becomes impossible for Trump to stop himself from attacking Iran. I'm going to break all of that down first. Just understand, not only did the circumstances dictate that Trump was guaranteed to attack Iran, the circumstances guaranteed that it would be impossible for him to win once he did. Jiyoung could see that for reasons that are going to become incredibly clear, the attack would cause Trump to lose control of the very thing he was trying to protect. The Strait of Hormuz. Welcome to Part two, the part of history everyone has forgotten. To understand why Iran specifically is the pressure point on the US and why it was the pressure point on the British before that, and why, in this moment, the US Was guaranteed to attack, you need to understand a piece of paper written by a British geographer back in 1904. His name was Halford Mackinder, and what he published in 1904 was one of the most important and least talked about strategic documents in modern history, and it continues to echo to this day, controlling behavior that most people simply do not understand. Mackinder looked at the world and saw something that basically everybody had missed. For centuries, the tiny island of Britain had managed to dominate the globe by ensuring that they had the largest navy so that they could control the seas. Given that trade happened on the seas back in the day, it didn't matter how big your country was, it mattered how powerful your navy was. As an island nation, Britain understood that that was the only way for them to dominate the world. And dominate they did. At their height, they literally controlled all of global trade. They controlled the open sea, the shipping lanes, the choke points, the ports. If you wanted to move goods or armies, you had to put them on a boat. And if you put them on a boat, you had to deal with the British Navy. But railroads were going to change everything and they knew it. For the first time in human history, you could move enormous quantities of goods and soldiers to across land faster than ships could carry them by sea. And that meant that whoever could unite the great Eurasian landmass, the stretch of territory running from Eastern Europe through Russia, through the Middle east all the way to China, would have access to a combined pool of energy, manufacturing capacity and population that no navy in the world could blockade or stop. Now Mackinder knew England's an island, so it's gotta have some solution. Mackinder called this territory the heartland. And his warning was blunt. If any power ever manages to unite it, the game is over. For whoever controls the seas, the seas just won't matter anymore. Britain's response was to make sure that nobody ever united the heartland by any means necessary. Fund wars back opposing factions. Keep Europe and Asia divided and at each other's throats. Force commerce back onto the water where the British Navy could control it. The Napoleonic wars, which most people think of as a story just about French ambition. It's that. But in large part it was about Britain spending enormous amounts of blood and treasure to make sure France didn't unify continental Europe. Same with Russia's attempts to push towards warm water ports. Same with backing the Ottoman Empire to keep Russia contained. Every major British geopolitical move for 150 years was a variation on that same theme. Prevent Eurasian unification. Keep the heartland divided. Then when the British Empire was simply too battered, bruised and indebted after World War II, they were forced to to pass the baton onto the new great power. The United States and America understood the playbook and they have been running the exact same method ever since. Different tools, sure, but same objective. Stick around. We'll be right back after this. Premier hosts on VRBO deliver quality vacation rental stays with fast responses and clear instructions so you don't have to worry about surprises. I asked our host a question about the house last night and he got back to me so super quick. See, that's a premier host move right there. I wish I had a premier group chat. I asked them where we should have dinner last night and they left me on red. I know you saw it. It says it. Classic group chat move. Don't walk into a surprise. Book a top rated vrbo. Stay with a premier host if you know you vrbo.
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All right, let's pick up where we left off. Do not let Mackinder's heartland get united. Then. It keeps everything on the seas. And when you're the US and you're far away from Asia and you're far away from Europe, now all of a sudden you keep everything on the oceans where you with your major navy can control the entire globe. Now, with that in mind, look at the BRICS partnership. Look at Iran and China through that lens. Look at Venezuela and its Chinese oil shipments through that lens. Look at Trump's attempts to seduce Russia away from China through that lens. Russia and China are already aligned. Russian energy, Chinese manufacturing. Two of the three legs of a potential heartland alliance already connected. The US knows that the thing Mackender spent his entire career warning the world about is already half built. Iran is the third leg. Geographically, Iran is the keystone. It's the bridge between Russian energy to the north, Chinese manufacturing to the east, and the oil fields of the broader Middle east to the south and west. It anchors China's Belt and Road Initiative, the network of land based trade routes that Beijing has been building for years specifically to reduce dependence on, you guessed it, sea lanes. Sea lanes that the U.S. navy controls. But Iran is far weaker than the other two. So if you're the US and you're looking for a target, your eyes go right to Iran. But if they could secure a nuclear weapon, they would no longer be the weak link. A nuclear armed Iran that can shake off US sanctions, bully the region and cooperate with Russia and China is a force powerful enough to potentially unite the heartland and and relegate the US to a far less dominant role on the global stage. When you're the reserve currency, that is existential. This is exactly what Mackinder spent his career warning about. A connected Eurasian landmass that routes around naval power entirely. And with a land based alternative in place and a weaker us, the GCC no longer benefits from the protections that the US is currently providing. And that would render the petrodollar the meaningless. Once that structural demand for the petrodollar disappears, the US's power is weakened even further. That is why the United States launched an attack on Iran. A nuclear armed Iran is not only a danger to the us, Israel and the GCC countries. But it's also the final piece in a completed heartland alliance that is truly an existential threat to the entire architecture that gave birth to American power. But if Jiang's framework is correct, it's already too late and the US will not be able to win this war. So the question becomes, did attacking Iran simply trigger a trap? Welcome to part three. It's a trap. Every president for the last 40 years sanctioned. Iran threatened Iran and then ultimately left them alone. There was a reason for that, and Trump just found out what it was. The US has enemies in this conflict. That's obvious. But according to Jiang, what's not obvious and what. What makes this unlike any war the US has fought in recent memory is that some of America's most important allies actually want America to enter this war specifically because they believe America will lose. Let's start with Saudi Arabia. On the surface, the Saudis and US are allies. They sell oil and dollars. They park their money in American markets. They share the US's desire for a weakened Iran. Now all that is true. But zoom out and ask what Saudi Arabia actually wants in the long run. They want to be the dominant power in the Middle East. A nuclear Iran is an existential threat to that for sure. So yes, they want Iran destroyed. But a United States that decisively wins this war and plants a flag permanently in the region, that's not in Saudis best interests. The Saudis have been quietly building relationships with China. They've been floating the idea of pricing some oil in yuan. They want options. A dominant entrenched America in their backyard shuts down some of those options. So the ideal outcome for Riyadh is a wounded Iran and a distracted, overextended America that needs Saudi cooperation more than ever. They want the US in this war. They just don't want the US to win it cleanly. Israel's calculus is more complex and definitely more unsettling. There are powerful factions within Israeli leadership who view this conflict explicitly in biblical end of days terms. Jiang is direct about this in a way that most analysts just refuse to talk about. Admittedly it sounds pretty crazy, but these factions want Iran destroyed. Not weakened, destroyed. But some of them also believe that unchecked American imperial power is ultimately an obstacle to to what God intends to unfold in the region. And they are pushing politically to make sure that America is not going to be there in the end. Much like Saudi Arabia, they want the U.S. s help to weaken Iran. But for the biblical prophecies to come true, the US must be out of the picture for the war of Gog and Magog to take place and fulfill God's will for his chosen people, the Israelites. So according to Jiang, they have encouraged and cajoled the US into entering the war. But ultimately, once Iran is sufficiently weakened, they want the US to be forced to retreat due to domestic political pressure, something that seems pretty likely to happen if ground troops are used. That's the trap. America enters a war that its closest allies helped engineer against an enemy that believes it's fighting for its very survival in terrain that neutralizes almost every advantage the US military has once they go in on the ground. Jung notes, this kind of thing has happened in history before. In 415 BCE, Athens assembled the most powerful naval expedition the ancient world had ever seen and sent it to conquer the much weaker Sicily. The Navy was so dominant and so confident that that defeat genuinely seemed impossible. Sound familiar? However, every ship that left never came home. The expedition was annihilated, and the Athenian empire, the greatest military force of its age, never recovered. For the trap to work, Iran doesn't need to win. They just need to drag the US into a war of attrition like we got drug into in Iraq and Afghanistan. Now this is something Trump swears he'll never do. But only time is going to tell. Welcome to part four, the part that's going to make you mad. Now, I warned you about this section, because here's where Jiang's framework stops being a geopolitical history lesson and starts being a story about your money, your job, and your future. The old world doesn't end with a single catastrophic explosion. It ends through a chain of connected failures, each one making the next that much more likely. And in no small part due to the war with Iran. That chain reaction is already in motion. Imagine it. The war drags on, the strait stays closed or just too dangerous for normal commercial shipping for an extended period of time. The GCC countries, the same ones that pledged $2 trillion into American AI infrastructure, now they have a problem. Their own oil infrastructure and water infrastructure are at risk. Their populations are nervous. And they have a very simple decision to make. Do we keep buying US debt and funding the American AI economy, or do we fund our own defense and ensure our survival? It's a pretty simple decision to make. And at a certain point, if Iran still poses a threat, the GCC countries will redirect all of their capital towards their survival. And that's when the US economy really goes boom. And not in a good way. When the GCC money that has been feeding our economy in ever growing amounts for decades now suddenly stops flowing into America. Not only does the appetite for US debt, the debt appetite that's required to fund our reckless spending, not only does that cease, but the AI bubble will also burst. Because right now, AI valuations are not based on current revenues. They're based on the promise of future revenues that are expected to come. But only if we actually finish this AI infrastructure build out and the revenues get delivered. Because AI just keeps getting better and better. If it stalls out now, we've got a problem. Remember, AI companies are now talking about building in outer space. If you pull the capital flow, the math collapses. And if that last part of the US economy breaks, it's going to be devastating. The American economy is already in a horrific K shaped situation. Most people are struggling to make ends meet. And the only people that are spending are the people at the top of the K. And they're able to spend because all of the GCC fueled money is flowing into the market. If that stops now, the top of the K and the bottom of the K are in trouble. The top of the K right now is creating an illusion that the consumer economy is basically functional. But without GCC dollars creating demand for that debt and private investment into the AI industry, those spenders too are going to feel the pinch and the economy is likely to violently implode. Add on top of that the fact that foreign governments and central banks are already selling U.S. treasury bonds because they're not dumb. They're looking at our debt, which is absolutely reckless, out of control and insane. And if they all abandon the US debt market at the same time, things could get dark, really dark, for a long time. And that is exactly how empires die. Slowly at first and then all at once. But as always, in times of massive disruption, there is always massive opportunity. So welcome to Part 5, the New World Order. If all of this comes to pass, what comes next and how do you position yourself to win? This is the part where most analysts just throw up their hands and they say nobody knows. Jiang disagrees strongly. What comes after the petrodollar is a world shaped by three forces. And these aren't policy choices that leaders are going to get to make. It's just what happens when the machine that held the old world together stops working. The first is deindustrialization. The global economy we've all grown up in was built on cheap, stable energy from the Middle East. Urban centers flourish, global supply chains move smoothly. The knowledge economy, AI, all of it, all of it is Downstream of affordable oil. When energy becomes expensive and unreliable, the model inverts. Local resilience beats global efficiency. Nations have to rebuild more self sufficient economies. That's painful, sure, but it's coming regardless, at least according to Jiang. The second inevitability is mercantilism. The global free trade order required a guarantor, a cop willing to enforce the rules all over the world. In the scenario that we've been discussing, the US will no longer have the economic ability to act as the world's police force. Even if they want to do it, they're not going to be able to do it. Because without that appetite for their debt, they can't deficit spend. You have to balance your budget. You can't be a world cop with a balanced budget. Things will once again be forced to be regional. Regional powers will emerge. Countries will become more self sufficient. Nations will increasingly start acting in their own self interest. Regional trading blocks, local supply networks. The era of frictionless global commerce is over at that point. The third is remilitarization. Pax Americana is ending. When there's no global guarantor of security, every nation that wants to survive has to be able to defend itself. The nations that refuse to face that reality will be absorbed or coerced by the ones that do. In Jiang's view, America's decline does not lead though to a Chinese rise, as many people will assume. This is one of the more sure shocking predictions that he makes. According to Jiang, China is optimized for the old world order and that order is ending. China's entire economic model was engineered for global supply chains, Western capital and stable Middle Eastern energy. The new world breaks all three simultaneously. China wants to trade its way to dominance, but in the new world that will be impossible. Japan, of all places, is Jiang's pick for the regional power in Asia. Now it's beyond the scope of this topic to explain why, but you can watch my full interview with Jiang where we cover this in detail. Europe as we understand it today, in Jiang's assessment, is also toast. They outsource their energy to Russia and their military to America. And they're going to find themselves perpetually at risk in the new world order. And the United States doesn't disappear. It contracts, becomes a Western hemisphere power still formidable, but no longer the world's enforcer. As for the Middle east, if their theologies hold true and God really returns, then all bets are off. Otherwise, the dominant power there will be determined by how things turn out with Iran. The new world is not going to be a world ruled by one great power. It's going to be ruled by several regional powers, each dominant in their own sphere, none strong enough to set global rules more contested, more dangerous, with no shared rulebook. So now what do you do with this information? First, and I cannot stress this enough, please don't panic. The goal of stepping inside of Professor Jiyoung's frame of reference is to understand the framework that helped him see what so many other people missed. It's not to send you screaming into a bunker. It's to help you assess more potential outcomes so you can make better decisions based on first principles in cause and effect, and have a broader view than the people around you who are stuck inside of a narrative that was almost certainly handed to them by somebody else, not something that they thought through after evaluating a bunch of perspectives. Now here's how I'm thinking about all this. The economy right now is weak. It's certainly fragile. Optionality is king. I am trying to keep updating my assumptions all the time based on where things are trending, the more options I have mapped out ahead of time, and the triggers that indicate which option I should pursue when, the better off I think I'm going to be. Most financial and career plans are built on the idea that the world basically keeps working the same way that it always has. People assume that the dollar is going to stay strong, that US Markets will recover over time. But for the first time in a long time, that may not be true, but it's still unknown. Global supply chains may stay intact, or the Strait of Hormuz may stay closed for months or even years. So build resiliency into your strategy. Start considering a world that is more local than global. What would that look like? Consider what works in a world with shorter, more local supply chains. Contemplate what holds value regardless of what the dollar does. Think about assets that aren't someone else's liability. Be more skeptical of debt than ever. The people who navigate this transition best are not going to be the ones who predict exactly what's going to happen. They're going to be the ones that never allow themselves to have a single point of failure. Now, as always, pay attention to energy. It is absolutely foundational to everything. Be positioned to weather energy price shocks that are almost certainly going to keep going for a while and stay liquid enough to have options. The one thing even Buffett and Dalio agree on is optionality. Don't be so locked into a single bet that you can't move when a clearer picture of the future begins to take shape. And as a final reminder, I think Professor Jiang is a phenomenally interesting thinker, running a framework with high predictive validity. But humans and economies are far too complicated to get overly confident in any one framework. Don't forget to routinely zoom back out and update your mental model. All right, that's it for today's episode. If you got value out of this, it would mean the world to me if you would go give us a five star rating. It helps more than you know. All right, thank you and until next time, my friends. Be legendary. Take care. Peace. When you manage procurement for multiple facilities, every order matters. But when it's for a hospital system, they matter even more. Grainger gets it and knows there's no time for managing more multiple suppliers and no room for shipping delays. 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If you work in university maintenance, Grainger considers you an MVP because your playbook ensures your arena is always ready for tip off. And Grainger is your trusted partner, offering the products you need all in one place, from H Vac and plumbing supplies to lighting and more. And all delivered with plenty of time left on the clock, so your team always gets the win. Call 1-800-GRAINGER visit grainger.com or just stop by Grainger for the ones who get it done.