War

[Chiefster23]

Well folks it looks like the Iran war is back with a vengeance. And escalation seems to be the name of the game. I think the Trumpster is pissed off and it doesn’t seem to be in his nature to back down. The IRGC is just plain crazy and ain’t backing down either. So now the rags are threatening to close down the Suez canal, Red sea, and the straits. This isn’t looking good and it appears we are in for a long painful haul. The SPR is still being drained and world oil reserves are running on fumes. I’m thinkin it’s gonna cost a fortune to heat our homes this winter. I’m stocking and prepping accordingly. I’m looking for a real good stock market day to sell off some stuff and convert to CDs. A world wide oil shortage could push us into a bad recession. Buckle up boys and girls!

[T-Man 1066]

I was going to start a thread about the war, nut I will post this here. This is something that might shed light onto Trump's foreign policy strategy. I did not write this but found it online.

Its a worthwhile read, albeit long...


Long post from end of March I read on X from 10Delta, thought it was at least, provacotive and makes a strong argument that this "war" is more about the global markets than just Iran.... Long post but concise:
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.

[Chiefster23]

Sounds reasonable.
I looked at propane prices today expecting to see increases but was very surprised to see it cheaper today than my last refill in late winter. Of course heating fuel prices are typically cheaper in summer, but I expected to see it more expensive due to the war. I refilled my coal bunker in the spring and I think I’m going to load up my small trailer with an additional half ton this fall just to have some extra on hand.

[T-Man 1066]

One bird in the hand is worth two in the bush...

[Dwight]

One bird in the hand is worth two in the bush...

Thanks T-Man . . . the long article hurt my eyes to read it all . . . but it was pretty much worth it. I don't agree 100% . . . but he and I are walking down the same road more or less.

The "market" for AI will be a calf sucking momma's bag when it is all done . . . and I truly think we are on the track to be the one.

The chinks have the numbers of minds doing what they do . . . but all those minds have ever done is reverse engineer other's inventions.

The freedom loving . . . independant thinker that brought us all the US inventions . . . is the same breed of thinkers that will take us to the end game of AI . . .

May God bless,
Dwight

[Texas PO]

I was going to start a thread about the war, nut I will post this here. This is something that might shed light onto Trump's foreign policy strategy. I did not write this but found it online.

Its a worthwhile read, albeit long...


Long post from end of March I read on X from 10Delta, thought it was at least, provacotive and makes a strong argument that this "war" is more about the global markets than just Iran.... Long post but concise:
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.

How Machiavellian. I don't know that I can go along with this in it's entirety, but it does provoke some thought.

[T-Man 1066]

How Machiavellian. I don't know that I can go along with this in it's entirety, but it does provoke some thought.

Exactly. The other thing I keep thinking back to, is that I don't have a tiny fraction of the intel that Trump, Heg, etc have. I would only assume if I knew what they did, my opinion of the whole issue would shift...

[T-Man 1066]

So I just saw a news story that Iran told the Houthis that if we bomb their power grid, that they should close the Red sea. Looking at a map of the region, that would go a real long way to piss off the Saudis and Egypt. Especially that a major factor of Egypt's economy is the tolls for ships passing through the Suez canal. No Red sea access, no need Suez, no $$ for Egypt.

Saudi Arabia would pretty much be choked off global shipping from both sides, and the Red sea is Sudan and Eritrea's only ports. Doesn't that just make it worse for Iran? Now everybody wants to bitch slap them, and probably Yemen too for hosting the Houthis.

What sayeth you?

[Chiefster23]

It would be extremely difficult, if not impossible to close off the red sea. But they don’t need to block it off entirely. Just cause enough damage for the insurance carriers to hike premiums into the stratosphere or crews to refuse transit. Just like Iran has done in the straits. If this situation escalates that far, I think the gloves might come off completely. Tactical nukes anyone? The entire world isn’t going to be held hostage to a bunch of crazy fanatics.

[StratBastard]

Well folks it looks like the Iran war is back with a vengeance. And escalation seems to be the name of the game. I think the Trumpster is pissed off and it doesn’t seem to be in his nature to back down. The IRGC is just plain crazy and ain’t backing down either. So now the rags are threatening to close down the Suez canal, Red sea, and the straits. This isn’t looking good and it appears we are in for a long painful haul. The SPR is still being drained and world oil reserves are running on fumes. I’m thinkin it’s gonna cost a fortune to heat our homes this winter. I’m stocking and prepping accordingly. I’m looking for a real good stock market day to sell off some stuff and convert to CDs. A world wide oil shortage could push us into a bad recession. Buckle up boys and girls!

Yep, me too. As of friday, I will be completely hedged in safe CD's and PM's. I'm not chasing gains anymore anyway, and who knows? Interest rates on CD's could go to 5% soon. We'll see.

[Texas PO]

It would be extremely difficult, if not impossible to close off the red sea. But they don’t need to block it off entirely. Just cause enough damage for the insurance carriers to hike premiums into the stratosphere or crews to refuse transit. Just like Iran has done in the straits. If this situation escalates that far, I think the gloves might come off completely. Tactical nukes anyone? The entire world isn’t going to be held hostage to a bunch of crazy fanatics.

I think once a tactical nuke is used in any theater (My money is on Russia /Ukraine) the genie will be out of the bottle. We are making sure our ducks are in a row.

[Chiefster23]

Yes. That would definitely be a game changer. But we are on escalating paths in both Ukraine and Iran. Unless something drastically changes, nukes could be used.

[Texas PO]

Agreed Chiefster, both theaters are spinning out of control. Putin is backed into a corner and is in trouble at home. The oligarchs are not happy with how the war is going. How long will Putin go before he does something drastic? I am kind of surprised he hasn't before now.

Iran has no intentions of backing down and is threatening to widen the conflict. Now there is a talk of ground troops being used. All the while look at who is being very quite and watching very closely, just waiting for us to get bogged down in yet another war.

I am looking at the same things as you. High gas prices, higher meat prices, and higher inflation. May even see some shortages. I am making sure our stores are topped off and and everything is in working order

[Dwight]

"I am making sure our stores are topped off and and everything is in working order"

Same thing here . . .

May God bless,
Dwight

[T-Man 1066]

I am surprised that China hasn't gone after Taiwan yet. I always figured one they seen we were too busy in all these conflicts they would go in.

[Chiefster23]

Just reported on the Fox news feed, we have dropped at least 5 bridges in Iran, maybe more. And started hitting their grid. They are urging citizens to conserve electricity by reducing AC but daytime temperatures are way over 100 degrees. They retaliated by hitting a desalination plant in Kuwait. These are major escalations. Hitting drinking water plants in a desert country takes this game to a whole nother level. There will be immense pressure on Trump to either quickly neutralize these crazies or to back off entirely. What will he do? I don’t think his ego will allow him to ba ck off.

[Dwight]

Back off??? Not sure you could talk him into that . . . may be able to squirrel around with a different argument to get it done . . . but a simple "back off" would get that voice fired.

May God bless,
Dwight