MacroVoices #523 Jim Bianco: Energy, FED & Economy in the wake of Iran conflict
Summary
Oil Markets: Extensive discussion on the Strait of Hormuz disruption, extreme WTI backwardation, and how prolonged logistics blockages could elevate prices and keep inflation sticky.
Energy Security: Emphasis on how insurance-driven shipping freezes, not direct military closure, are choking Gulf exports and could trigger broader food and fuel shortages.
LNG: Bullish implications for US LNG as Qatar/UAE supply reliability is questioned; long-term contracts may tilt toward the US due to perceived security and availability.
Stablecoins: Deep dive into dollar stablecoins enabling de facto dollarization in weak economies, potential US statecraft, and limited net-new Treasury demand despite tokenization narratives.
Agentic AI: Shift from generative to agentic AI highlighted as productivity game-changer, with rising electricity demand from data centers and policy friction over energy sourcing.
Nuclear Energy: Case for advanced nuclear and small modular reactors to power AI/data centers and grids; regulatory progress (e.g., non-water-cooled approvals) seen as a key inflection.
Precious Metals: Gold’s atypical response to geopolitics attributed to de-risking and margin calls; longer-term bullish fundamentals contrasted with short-term selling pressure.
Macro & Policy: Higher oil-induced inflation constrains Fed cuts; debate over future Fed leadership, dissenting FOMC voters, and the risk of easing into an inflationary backdrop.
Transcript
This is Macrovoices, the free weekly financial podcast targeting professional finance, high- netw worth individuals, family offices, and other sophisticated investors. Macrovoices [music] is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred. Now, here are your hosts, Eric Townsend and Patrick Szna. Macrovoic's episode 523 was produced on March 12th, 2026. I'm Eric Townsend. Biano Research founder Jim Biano returns as this week's feature interview guest. Jim and I will discuss everything from the geopolitical situation in Iran to oil prices to precious metals and much more. We got a lot of positive feedback on last week's Advanced Nuclear Energy interview with Aloto atomic CEO Matt Lozac, but also a few criticisms. A few of you said that we should have been clearer about whether or not there was a present opportunity to invest in Aloto atomics and how to go about it. I'll revisit that after today's feature interview. But the much stronger criticism was that we picked a hell of a week to step away from macro and run a nuclear energy interview as war was literally breaking out in the Middle East. Look folks, our guest interviews are scheduled weeks in advance. So, there's no way that we could have anticipated or coordinated the timing of the Iran conflict with last week's feature guest booking. But what we should have done last week is the same thing that we did on January 30th of 2020 when we dropped everything to bring in a second feature interview guest, Dr. Chris Martinson, who correctly called the COVID pandemic in that episode during a second guest interview. Sorry folks, we didn't think of that last week, but we can definitely make up for it this week. So, be sure to stay tuned after the feature interview with Jim Biano for a second feature interview with none other than Dr. Anis Alhaji, who will break down why this conflict probably isn't over the way the market was interpreting the news flow as of Tuesday night, along with Dr. Anis' analysis of what still needs to be sorted out before the conflict and markets can return to normal. All of that's coming up on this week's podcast. But wait, it doesn't end there. Patrick's trade of the week will focus on hedging portfolio tail risks in these troubled times and we'll have an announcement about another free portfolio hedging webinar from Big Picture Trading. And then of course we'll have our usual postgame chart deck. So make some popcorn for Jim Biano's feature interview and put your seat belts on for Dr. Anna Alhaji's explanation of why it ain't over until it's really over and how it's maybe not quite over in terms of this oil situation. Then stay tuned for the postgame chart deck and market discussion. And I'm Patrick Szno with the macro scoreboard week overweek. As of the close of Wednesday, March 11th, 2026, the S&P 500 index down 137 basis points, trading at 6775. The market is in the midst of a correction. The question is how deep does it go. We will take a closer look at that chart and the key technical levels to watch in the postgame segment. The US dollar index up 24 basis points trading at 99 and a quarter, trading at the top of its range, begging the question, will it break out? The April WTI crude oil contract up 1686 basis points to 87 and A4. It almost hit $120 on the weekend news as volatility remains off the charts. The April Arbomb gasoline up 116 basis points trading at 279. Prices at the pump up almost 70% year to date. The April gold contract up 88 basis points trading at 5179 continues to consolidate after January high was put in. The May copper contract down 17 basis points to 5.89. The March uranium contract down 23 basis points trading at 8570. And the US 10-year Treasury yield up 12 basis points trading at 423. A material rise in yields as traders are nervous about rising inflation. The key news to watch this week is the core PCE price index on Friday. And next week we have the PPI inflation numbers and the FOMC Bank of Japan and ECB policy statements and conferences. This week's feature interview guest is Biano Research founder Jim Biano. Eric and Jim discussed the financial market implications of the Iran conflict, the risk that higher oil prices could keep inflation elevated, the role of stable coins in the global dollar system, and how rapid advances in agenic AI could reshape productivity, energy demand, and the future of work. Then stay tuned for our special follow-up appearance by energy expert Anas Alhaji, who joins Eric later in the program to break down the latest developments in the oil markets and what the crisis in the straight of horm could mean for global energy supply and prices. Eric's interview with Jim Biano is coming up as macrovoices continues right here at macrovoices.com. And now with this week's special guest, here's your host, Eric Townsend. Joining me now is Bianco Research founder, Jim Biano. Jim, no shortage of things to talk about this week. Let's discuss the Iran conflict, what it means, what comes next. Uh, how are you looking at this >> being that we are financially oriented and that's our real interest is we have to look at this from a financial standpoint. What does that mean for financial markets and potentially the economy, global economy in general? And obviously the answer is what does it mean for the price of crude oil? And in the immediate short term, we've got a problem in that the crude oil is not moving. Crude oil is kind of like the circulatory system of the world. It it gets it gets pumped. It gets put into storage. It gets put on the tankers. It gets sent to refineries. and the system constantly has to be moving. Well, right now we have a big blockage and that blockage is in the straight of Hormuz. Now, the good news is we have not really done any damage to the system. Not that I've seen in terms of stories, you know, we haven't blown up a bunch of infrastructure or pipelines or wells or ports or anything that would cause an extended period of time to repair it. We've got a bunch of ships sitting around waiting for the ability to go through the straight and keep that circulatory system moving. So, the hope is that this is a short-term problem. Short-term being 2 to 3 months, you a couple of weeks to get this resolved and then 6 weeks to two months to maybe get that circulatory system moving. The concern is the longer this goes, the more we keep lobbing missiles at them and they keep lobbing missiles at us or their neighbors, the higher the probability that they're going to break something that will take a significant period of time to fix and that will create a bigger problem for the [snorts] energy markets. So for right now, the hope in the energy markets and I share that hope for right now is all we're doing is we're waiting for the straight to get hope in so we could start moving that the moving the crude oil again. You know, we haven't sunk any of these ships or anything, but the concern is the longer this goes and in the middle of a kinetic war, the longer it goes, the higher the risk is we break something. >> Let's talk about what the impacts are if something does get broken and it delays the ability to deliver crude oil. It seems to me like obviously there's a cost to the economy which is the the most immediate effect of all of the sudden energy costs much more and it's it's crippling on the productive economy. But I think there's a lot of knock-on effects. The first and biggest one in my mind is the inflation wave that that creates. Inflation tends to be self-reinforcing. So you get the potential that you've started a fire you can't put out. And then there's probably several other feedback loops. So when you think about what if they do break something that results in even after the uh the piece has been made, it's going to take a long time to fix those broken things before we get the oil delivery system back to normal. What are the knock-on effects that you see financially? >> So first of all, I'll I'll measure the knock-on effects in a very marketoriented way. If you look at the forward curve in the crude oil futures market, it is in record backwardation. By Sunday night, uh on March 8th, it hit minus 25%, meaning that the sixmon out the September futures for WTI was 25% lower in price than the April futures, which is the current contract. And that is the most extreme that it's ever been um right now. So one way you can look at that is that the market is still pricing and hoping that this is going to be a short-term thing. So if we break something of significance, how do we know it? I think you would see that backwardation start to narrow a lot because those deferred contracts would start to rally to meet where the spot contract is. But you're right, if that were to happen, you're probably going to see more inflation. Now, all things being equal, we've been doing a little back of the envelope calculation with the price of gasoline in the United States in the last 8 days. The war, the day we're recording, March 10th is um the 10th day. So, we've got 9 days worth of data. Price of gasoline is up 18% or 55 cents. All things being equal, that probably is going to give you a March CPI report of around 610 or 710. That is probably going to push year-over-year inflation over 3% for March. Now, every economist will say, "Oh, but that's temporary. That's just an inflation thing." Correct. Unless, of course, those deferred contracts and rally the backwardization narrows. And then you could start talking about April being elevated. You could start talking about May being elevated as well. I don't think this is going to produce big inflation like 7 8 9% inflation. But what it can do at least in the very short term of the next 3 to 6 months if not longer is keep the inflation rate around 3% if not above 3% higher if the crude oil situation worsens. I've been arguing that the Fed cannot cut rates if that's the inflation rate. We have gotten used to and we are still used to that 2010 to 2020 period where no matter what the Fed did, they couldn't get or no matter what the economic circumstances were, the inflation rate never got above 2%. In fact, it averaged around 1.6 during the 2010 to 2020 period. So at any wobble in the economy, print money, cut rates to zero, print more money. And that mantra remains to this day that whenever markets or economies wobble, print. You can't do that if we've got inflation. Because if you print, what you're trying to say is the economy is wobbling, financial markets are under stress. We need to create easier financial conditions by cutting interest rates or expanding the Fed's balance sheet. But in this environment, if you do that, then you're saying to bond traders, we don't care about your real returns. You have a fixed income investment, and we're willing to risk inflation going up even though your investment's fixed income. You should sell bonds right now. And so if they were to try and be easy in this type of environment, you could wind up with higher interest rates and actually making things worse, making it actually tighter. So one of the things about the higher inflation is it takes the Fed off the table even if we get worsening employment numbers even if markets start to wobble a lot more because the res the reaction would be oh markets are in trouble or the economyy's just weakening we have to cut. Yes. And then if 10-year note traders run away from the 10-year note and those rates start soaring you've made things worse. they're going to want some assurances that they're not going to lose money because inflation's going to go up. So that's where I think the the nuance is going to come in. This is not the 2010 to 2020 period. And if we have enough inflation now because of the rise in crude oil that we've seen and the rise in gasoline we've seen now to keep the inflation rate above three, the Fed is just off the table. They just cannot step in and start cutting rates under that environment. Jim, at the risk of nitpicking semantics, I want to come back to your your language around saying the Fed cannot cut rates. I think you just made an extremely good argument for why they should not cut rates. Are you really convinced that they won't? >> Oh, yeah. I guess you're right that in in a semantic argument, I I would argue they should not because the risk is they make it worse. That's what I meant by cannot is that they need to be very very careful. Now, obviously, if things were to deteriorate to the point where you would argue that they would overwhelm whatever higher inflation you would get that the economy would be so weak that even with higher energy prices, it would offset that. You could then see the Fed cutting rates. But we're talking about like a almost like a rerun of 2008 or 2020 in that type of scenario. And as we're talking now, the stock market isn't even 5% off of its all-time high. So, we're nowhere near that type of scenario. But you're right. I should have said they really should not because the risk is that in the attempt to try and make easier financial conditions by cutting rates. They spook bond traders that they're not acting in their best interest. They sell, rates go up, and you actually wind up making tighter financial conditions, and you wind up making it worse. Jim, let's take that a little bit further and talk about the next step with Worsh taking office as Fed chair. You'll have to refresh our memory on exactly what date that becomes effective. It seems like we don't have a really clear signal. A lot of people thought he was more hawkish, but then again, it seems like he's extremely loyal to Trump. He's going to give Trump whatever he needs. I agree with you in what you said about the reasons the Fed should not cut here. I don't think President Trump got the memo on that. And if Wars is going to do whatever Trump wants, and I'm not sure if that's the case, it seems like there's a potential that the Fed does cut. Am I missing something? >> No, you're not missing anything at all. Just as a quick aside, I I'll remind everybody that Donald Trump is a real estate guy, and I've yet to meet a real estate guy who has not met an interest rate that he doesn't think should go lower. So, I'm not surprised that at every turn he just keeps demanding lower and lower interest rates because every real estate guy does that. Now, as far as Kevin Worsh goes, you're right. The problem we face right now is we're all saying he's hawkish. And why do we say he's hawkish? Because we're going back and looking at what he was saying in in writing back when he was a Federal Reserve governor during the financial crisis. I hate to date us all, but that was 20 years ago, 19 years ago, um, at this point. And we don't really know where his thinking is currently because in the last 8 months, he's only given two public appearances. And he was kind of vague on where he stands on this. Now hopefully when they do get his confirmation hearing scheduled, he'll have an opportunity to explain his thinking a little bit more fully. And as far as the date goes, it's May 15th is the last day for um J. Paul. So all things being equal, Kevin Walsh would be the chairman at the June meeting. So that would mean the next two meetings, the March 18th meeting and the early May meeting will be uh Jay Pal will preside over those. So he's got two meetings left and then we'll have Kevin Walsh unless there's a snag in his confirmation hearings in any way. The bigger issue I think he's going to face other than you know he will articulate a comment or a view I assume that will say that we should be cutting interest rates is that the Federal Reserve has been changing its stripes. The individual members of the Fed have been really talking a lot more independent than they've ever been and they've really been acting more independent. We've seen way more dissents in the last three or four meetings than we probably saw in the last 5 years combined. And I don't think that's a fluke and I think that's going to continue. so much that I've argued that Fed watching is no longer about parsing the individual words of what the chairman says, but it's really about listening to all the voters and putting them in the cut, hold, or hike column and asking the question, which one has seven votes? And whichever one has seven votes, that's what the Fed's going to do. And as of right now, as I look at the Fed speech broken down, of the 12 voters, fully 10 of them have made hawkish comments. I mean, basically Steven Morin is made, you know, he's still pretty doubbish, and you might argue Chris Waller is kind of on the fence, but the rest of them are pretty hawkish. So given all of that, if we had a Kevin Worshes Fed chairman right now and he said, "Look, we have to cut rates." I would just turn around and say where the other six votes you're going to get to approve that rate cut because if they're going to vote the way they're talking and I assume they will. I don't see where those votes are coming from. So I think that's going to be the next big thing we're going to see when we get this new Fed chairman is how much of it is really going to be about parsing his words and how much of it is going to be really just about voteing and just trying to figure out where all the votes are coming from. Let's talk about the broader economy and where the market was headed before this whole oil shock happened even before the decision was made to go ahead and have an attack on Iran. It kind of felt like the market was rolling over and you know maybe we're heading into a soft patch here. Uh we've just tested the 200 day moving average at least very briefly in the overnight session on the S&P. Is it over? Is it at all clear or are we really just kind of back to where we were of wondering if it's time for this market to run out of steam? >> I think you when it comes to the economy that there's really an issue that is difficult for a lot of economists and a lot of other people to really get their head around and that continues to be the story about labor supply. We got the February employment report back um last week, the week before we're recording and it came in at a stunning number of minus 90,000 jobs. And yet the reaction in the market was very muted. You would have thought you would have saw interest rates plunge and you would have thought you would have saw uh maybe the the stock market take it poorly and it largely didn't. Now, part of that might be because it was still wrapped up in paying attention to oil, but I do think that it really comes down to the other issue, and that is what is the biggest driver of labor because labor is the most important aspect of any economy. How many people have jobs? How many people are going to be able to get a job? And the biggest aspect of labor, I think, comes to population growth. And we have no population growth because of the um slow of what's happening at the border. And there's arguments to be made that the number of jobs that the US economy needs to create is somewhere around 0 to 50,000, probably with an average closer to 15 to 25,000 jobs a month. That's all the US economy needs to create right now. It's not 150,000 like it used to be a couple years ago. And again, that's because if you don't have population growth driven by immigration, the number of 15 to 64 year olds or 16 to 64 year olds, excuse me, that's the working age population isn't growing. And if that's not growing, you don't need to create a number of jobs. That's why I think we also have this other instance where if you go back to the summer of 2024, the US economy on a 12-month average basis was creating about 150,000 jobs a month in the year ending July 2024. In the year ending in February of 2026, that fallen from 150 to 9,000. But the unemployment rate hardly moved. It was a 4.2% in July of 2024. It's 4.4% 4% in February of 2026 up two ten while we lost all that job growth. Now why isn't it higher? Because we don't need that many jobs is really where I think it is. And that really gets to the other issue too is that if we don't need that many jobs and none other than Jay Pal talked about this at his last press conference maybe at these very low numbers that we're seeing with employment we are still in balance. And if we are still in balance, the risk you face is that if you overreact to these supposedly weak numbers and cut rates too much, again, that could be perceived as overstimulating when the economy doesn't need it. So, I do think that when you look at the market, I don't think it's necessarily looking like it's going to roll over on the idea that the economy is weakening because I think that the numbers have so fundamentally changed here right now. And it's a admittedly it's a hard thing to get your head around because when you say that the population growth is down then people ask can you be more precise and the answer is not really because demographers have never been structured to give us high frequency updates in the population of the United States because they've never had to you know and so what about uh labor force participation those numbers are constantly revised but we do know that the population growth has come from immigration because of the low fertility rate and we do know that immigration is most likely negative right now. You know, more people leaving the country than entering the country. As we're recording on Tuesday afternoon, we're looking at about 5,200 on the gold price. Something I reported last week on Macrovoices is it feels like there's been a change in the reaction of gold to geopolitics. We had last Monday uh we had a situation where bombs are dropping, oil is going straight up and gold was down literally uh $400 over the course of just 10 hours. We saw kind of the same thing on the Sunday futures open where it was just a moonshot on on oil prices in reaction to escalation over the weekend in the straight of Hormuz and so forth. And obviously oil is the the direct affected commodity. But you didn't see the expected gold up with oil. It was actually gold down. Feels like somebody is either selling gold to raise money to cover their losses on something else or selling into strength or something. It feels like there's been a disturbance in the force with respect to precious metals. What do you think is going on? You know, sometimes the easiest answer might be the best answer is that first of all, gold and silver as we know from early February had that massive reversal and while they haven't followed through on the downside, their upward momentum is stalled. So, you've got a lot of people that have a lot of unrealized gains in those. And when you look at markets wobbling and you wonder that if people need to sell something, there's the old adage on Wall Street, you sell what you can, not what you want. And what you can sell is the thing that has big unrealized gains and no momentum. So whether it's to meet a margin call or a perceived margin call like Sunday night when futures S&P futures were down 2 and a half% at their worst point or in oil because of the big whipsaws we've seen in it. So somebody's going to get hit with a margin call. Where are they going to get the money from? They've got this other thing here. We assume that they're holding that they've got a big unrealized gain and they can sell it. So, I think that there might be some of that um going on with gold because you're right, normally speaking, all things being equal, if you've got geopolitical stress, the textbooks say gold and silver and precious metals are the place to go. But they have definitely not been the place to go since February 28th because they have not been responding to this. >> Jim, that as you said was the old school adage is precious metals. Of course, the new age version of that would be cryptocurrency. How has that fared since February 28th? Yeah, it's been more of the same. I mean, it's really struggled to do anything right now. Now, it's very volatile. You could say it's up five or six%, but in Bitcoin, five or six% is kind of an average day. So, it hasn't really done anything to establish any kind of an uptrend as well. But I also think that they're also stuck in a different type of cycle as well, too. Bitcoin peaked at the end of October, $126,000. at its lows in February, it was down 50% from that high. So, it has definitely broken momentum as well. And I think the narrative behind Bitcoin has is been changing right now. The narrative used to be that institutions, retail investors through wealth managers, and everybody's going to buy it through these new products like the ETFs, and they're all going to say kind of the old gold story. Remember if all if only anybody everybody only owned 5% of their portfolio in gold, it would go to the moon. Well, that was kind of the argument that they were using with Bitcoin was if everybody just bought three or 5% of their portfolio in Bitcoin, it would go to the moon. I think that narrative is over with right now. Now, the potential for a new narrative is out there. And I think the new narrative, if that old narrative was permission, that the regulators were giving you permission with it, that Wall Street was creating products to give you permission to own it, the new narrative for it might be replacement instead of saying, because I've I've seen on social media a lot of Bitcoin enthusiasts saying, "Oh, don't worry. You know, Larry Frink and Black Rockck are talking about tokenizing every asset in the world, and that'll be bullish for Bitcoin." And I was like, why are you waiting for Larry Frink to do it? Why doesn't the Bitcoin development community do it instead of him? So maybe the next narrative will be replacement. Instead of waiting for regulators to approve it, waiting for Wall Street to create products for regular people to trade on it, why don't you create an alternative system and say, "This is better than the old system. Let's go play on that game and let's play it in this way." Jim, you told me off the air that you heard my interview recently with Michael Every about stable coin statecraftraft and that comes to mind with what you just said because talk about an asset to tokenize that's already been tokenized. It's the US dollar. What if Trump and Bessant were to say to the whole world, look, uh, don't worry about what your government is telling you the rules are in your country. Don't worry about what your banking system says in your country. you can skirt the whole system and just buy US dollar stable coins on your cell phone regardless of of what your country's rules are and uh yeah, you're backed by the US government. That could potentially replace the petro dollar system with the stable coin system and shore up the US Treasury market. Do you think that's a realistic scenario? And would it play into what you just said about, you know, the market creating those tokenized assets without waiting for anybody? Oh, I think that in that case that is a realistic scenario and in fact you could argue that that has already started to happen. If you look at countries like Venezuela, Afghanistan, even Iran and other hotspots around the world, I'll take Venezuela as my example. If you wanted to go and find out what is the black market rate for the Venezuelan Boulevard, their currency, the most credible source that I have found is Binance giving you a tether to Bolvar rate. In other words, a stable coin. A stable coin is really where they are where that they operate. And when you dig deeper into it, you'll find out that in countries like Afghanistan and Iran to some degree and Venezuela definitely, those are dollarized economies. They are now trading in commerce in dollars, but it's not stacks of $100 bills. It's on their electronic wallets. They're owning the dollar stable coin and they're trading it back and forth. So in the respect that the dollar is going to get a leg up on remaining to be the reserve currency and that it's going to have a digital version of it in the crypto universe and a stable coin. I think that's already happened. Now it's going to be a while before we see that come to say Europe or the United States because our financial system is more stable. We don't go to bed every night worrying that our banks are going to fail. And we don't go to bed every night worrying, I'm talking about Europe, the United States, Japan, that our currencies are going to get seriously devalued. At least we don't yet. Or maybe I should say we don't now. But so we don't really need it, but in a lot of places around the world, they do. So I agree that's coming and I agree that to some degree, it's already here. Now the second part of that is what Scott Bessant is trying to argue is this will be hugely beneficial for lowering interest rates in the US because as trillions of dollars of stable coins are created they're going to have to be backed by US treasuries and that's going to create a demand for them. The problem I have with that argument is where is that money coming from right now? that money that would go into a stable into a dollar-based stable coin was probably already in to some degree in the financial system to begin with and it was already backed by a dollar. So if the argument is we need to pass the Genius Act and once we get the Genius Act passed that Americans are going to start opening up electronic wallets and they're going to be buying hundreds of billions of dollars worth of stable coins. I understand that argument. I just don't know whether or not a stable coin will be more attractive than a current bank account is, at least not now. But even if that were to happen and they start buying hundreds of billions of dollars worth of stable coins, where's that hundreds of billions of dollars coming from? It's going to be coming out of the banking system that's already backed by a Treasury security and it's going to go into a new secure a new instrument, a stable coin that's backed by a Treasury security. So, it's purely a substitution effect is what you're going to get. You're not going to get any really big net buy. Now, you might get net buying out of places like Venezuela, Afghanistan, Iran, because they're they're not backed by dollars and they put their money into a stable coin, but they're not going to be enough to move the needle when you have a $40 trillion deficit. It's really going to be the developed world that's going to be able to move the needle. But I just don't see where you're going to get that net new money. But let's go back to the first part. the fact that everybody is now using stable coins and they're using them through electronic wallets and they're using them in order to, you know, affect trade, the dollar is maintaining its dominance as the reserve currency. It's just that if you're looking at the traditional numbers of currency and circulation and how much trade is going on, how much are being held by the banks and reserves, you're not going to see it. you're gonna start you're but you're seeing it at the margins where they need it the most in the countries that are most vulnerable and that's what people are doing is because remember that in even in the poorest countries in the world cell phone penetration smartphone penetration is still 80% even in you could pick the poorest countries in Africa 80% of the people have a cell phone and they could download an electronic wallet and they can hold a stable coin and that electronic wallet and they could transfer it to another phone and that's how commerce is being done and it's all backed by dollars. >> What do you think about the state craft argument of it where Bessant and Trump intentionally basically tell the rest of the world look the model that we used to have where you guys thought your central bank was in charge of things like managing your own currency? No, we're in charge now. We're going to just tell the entire world that the settlement currency for all international transactions is US dollar stable coins and we're going to bypass any monetary policy that other countries try to implement because we're calling the shots. Is that scenario something they would do intentionally? >> I think in fact that is the scenario that we're having. Now whether they're trying to intentionally do it, it's very possible. But the idea is they are giving you a frictionless version of the dollar that everybody can own and more importantly unlike the old system that you're that cannot be regulated by a different country. So if you're in Iran and they want to say that you can't use dollars because the government will punish you if you use dollars in the old system. Yes, it was hard to do, right? that you couldn't hold it in a a regulated bank account in that country. If you wanted to use dollars, you had to physically carry around money with you, a sack of $100 bills, and you were subject to crime, somebody trying to steal from you. But now, you just walk around with a with a phone like every other person, and they have no way to know whether or not you own that. So, they are providing a global standard to the rest of the world. And they're saying to other countries, if you run your financial system poorly or you try to devalue your currency a lot, we don't have to say a word. Your population is going to migrate to our currency, the dollar, through a stable coin, and the Federal Reserve will become the world central bank by default, whereas your central bank will then start to lose influence. So, I definitely think that that's effectively what's happening. I'll assume that that's kind of what they don't mind happening, but they haven't said it directly, but that's in reality what we're getting. >> There's another topic where it feels to me like the winds are changing, Jim, and that's artificial intelligence. I don't mean recent developments in AI, although there have certainly been some of those. What I'm talking about is the the public sentiment and reaction to it until very recently was, "Oh boy, this is just the coolest thing ever. It's gonna, you know, enable so many things. It's going to be great. I'm hearing a lot more of the fears of, you know, it's taking our jobs, it's putting us out of business, we're we're going to end up losing a lot of industries, losing tens of thousands of jobs, and it's going to make our electric bills triple because we're competing with AI data centers for electricity, and there's not enough electricity to go around. So, you've got the public sentiment seems to be changing and meanwhile, the military sentiment toward the AI developers. If you look at the pissing contest that Anthropic just had with or is still having with the US State Department, it seems like we're kind of getting to a showdown where the US government is saying, "No, look, we're going to tell you what to do. You don't get to decide what your technology gets used for or what you want to sell it for. You're going to sell it to us on our terms, whether you like it or not." It seems like things are heating up on on both fronts. Where do you see this going? >> Yeah, you're right. There was a recent poll done that was put out in the last week or so asking people their favorability, unfavorability of u of certain topics and AI scored near the bottom of the list. The very bottom of the list, by the way, was people's opinion about Iran. So, at least people like AI more than Iran. That's all they've got really going for them um at this point, but not much more. And of course, as you pointed out, the real reason that AI is looked down so much is we've been told by the media it's a threat. It's either a threat for our job or it's a threat for our electric bill that we, you know, that our um our local utility is going to be we're going to be competing with the data center in order to u pay for putting the lights on in our house um right now. And bear in mind that in some places, and I'll give you the state of Wisconsin for as a matter of fact, state of Wisconsin has a lot of data centers in it. Very popular place to put those. The electrical consumption of data centers in the state of Wisconsin is larger than the 6 million people residents of Wisconsin. Now to keep this number in perspective about 60 or 70% of all electrical usage in the United States is commercial and industrial and data centers are part of commercial and industrial but they're larger than residential usage right now. So that's part of the thing that gives people a lot of pause about AI. Now I have a little bit different view on it and you know just by background you know I've said this before I subscribe to the pro version of every data of every AI right now. I kind of use all of them and I'm learning that they're not all the same. It's not like switching from Coke to Pepsi if you go from um you know Open AI to Claude with this entropic. They all have their strengths and they all have their weaknesses depending on which one you want to use. But what has changed in the last 90 days that has really brought this on forward is what's called Agentic AI. In other words, we're all familiar with when Chat GPT went to its free service in late 2022. It's called generative AI. That's prompt and response. Ask it a question, get it an answer. It's Google search on steroids. But what angentic AI or AI agents is give the AI control of your computer. Tell it it has the ability to read your files, change your files, execute commands without you doing it. So don't tell me how to do it, just go do it. And that has been the thing that has really opened up people's eyes why the software stocks have been tr struggling because the most obvious application is is in coding and in development right now that people have been using AI to basically as an assistant as opposed to just something you ask questions for. And I do think that is going to be transformational. Now, as far as jobs go, I have a different view on it. Not necessarily a unique view. Uh, but what is a job? A job is a series of tasks. You do a number of things and put them all together and that's your job. Now, some of those tasks tend to be kind of boring and tend to be repetitive and you don't want to do them. They're usually around compliance, accounting, answering emails, putting together slide decks, updating Excel spreadsheets. I'm kind of speaking from a financial point of view, you know, filling out expense reports and all that. AI can be very helpful in all of that stuff in streamlining or automating a lot of those processes in order so you don't have to do them. Now, that's going to free me up or anybody else up that uses AI to do more of the higherend stuff. Collaboration, creativity, communication. These are things that humans are clearly better at than AI. If your argument is, oh well, if AI is going to do all this other stuff, like answer some of my emails, help me take the one-hour process of putting together my slide deck and make it five minutes, filling out my expense reports automatically, I can go home every day at 1:00 because I don't have to spend the other three hours at work doing that other stuff, then your job's in trouble. But if you say, "No, I have three more hours to do more higherend stuff at my job," then your job necessarily won't be as much in trouble. But so I'm not of the opinion that it's necessarily something we should be afraid of, but I understand why everybody is because they're only told you're going to lose your job and you're going to pay more in your electric bill. And most people haven't yet fully recognized that this angentic AI is here. And they're saying for what? For a Google search? Why am I going to lose my job over a Google search? Why am I going to have to pay more in electrical bills over a Google search? And so I do think that this industry is moving so fast. I'll give you one fun anecdote and somebody told me to do this uh with Claude on uh on Claude. If you asked AI right now, how do I use you? How do I use AI? It will give you instructions on how to use it, which are three months old, which is not even the latest version. So it's so moving so fast it can't keep up with itself right now. >> I couldn't agree more with that. I use Claude and uh ChachiPT both extensively. I agree with you that they're completely different in their I hate to say the word personality, but I don't know how else to describe it. They're completely different tools with different characteristics. There's something that nobody's talking about though, which I think they should be, which is we've heard one side of this argument, which you just articulated perfectly, and that is the argument in favor of AI is that it enables humans to do much more than they ever could have done before. It means our economy could be much more productive because you can literally write and publish a book in a week or two using Claude. That just wasn't possible previously. you can do a lot of things. The thing is the energy consumption side of it. And it seems to me that the solution to this is if you change the rules and you told the tech companies, look, you guys are really good at innovating and doing things more quickly than a lot of other industries are. The new rules are we're going to open a whole bunch of doors for you. We're going to take a lot of barriers out of your way so you can have the growth and everything you want. But it's a two for one. Not only do you have to build your own energy to support your data center, but you have to build double the amount of energy that your data center needs and sell it [clears throat] back to the grid. So that in the course of getting your AI running and doing everything you're doing, you're supplying more energy to the rest of society, not consuming net energy that we can't afford to spare. if we unregulated a bunch of things so that Google was allowed to build power plants all over the countryside and could do things like work with, you know, acquiring an advanced nuclear company, investing, we just talked to Alo last week about mass- prodduced entire nuclear power plants. If the hyperscalers could buy into something like that and start building nuclear faster than electric utilities can do it because frankly the the tech companies are pretty good at innovating technology and deploying it quickly. I think you could see the AI industry supplying net energy to the rest of the world. The problem is, you know, there's protections in place that only utilities are allowed to build power plants and so forth. I think we should rearchitect this and open the door for high-tech to build more than enough energy to than it consumes. What do you think of that idea? >> I think not only do I agree with it, I think that most of high-tech is on board with that idea full scale that they would be more than happy to >> Well, they're trying to do it, but the the rules don't really allow it, >> right? And the biggest problem with the rules is is that you now run into the environmental lobby. and the environmental lobby is full scale against a lot of these rules because one of the things as you mentioned they're saying yes I'm ready to do that yes we actually will build uh energy sources to not only power our data centers but overpower our data centers so we can sell back to the grid and they'll go you one step further energy sources that we have don't produce any pollution you go well okay what is that energy source it's small nuclear reactors and that's when the you know the environmental groups then throw up the wall and go, "Hold on a minute. Hold on a minute. We're not building more nuclear reactors." And they're like, "Oh, yes, that is the answer. These small nuclear reactors, you know, they're the size of like a two-car garage, and they will produce tremendous amounts of energy, and they exist. Their safety record is very good. They'll try and demagogue them by that, this is the environmental groups, and saying that they're dangerous and that we shouldn't be using them, but they but there's no reason to think that they are dangerous right now. um it would just be demagoguery that we would say it. But so that's really where the where the blockage is. Now maybe there is a sign that this is coming because in the last week the Trump administration has given at least Department of Energy approval if I've got it right for a new nuclear power plant to be built in the United States. The first one in 50 years that's gotten approval. Doesn't mean it's going to it's not done with all the approvals but we are moving in that direction. So I do think you're right. If you allow the tech companies to build your power, build your data center, bring your all, and then construct the power to build it, they're all for it. But you've got to let them do it. And you can't say we're going to do it, but then we're going to go through the same rigomearroll that we have right now. You want to build some power plant to to palm fund it. First, we have to have 10 years worth of studies done. Then we have to have five years worth of public hearings. And then maybe we could build it if you're still interested in doing it at that point. cannot have that game being played anymore with this. So that's really where the where the fight is going to be is really with whether or not the environmental lobby will allow this to happen. >> Yeah, that announcement that you're talking about was Terrap Power and their sodium cooled nuclear reactor. It's the first time in the 52-year history of the Nuclear Regulatory Commission that they have ever approved a civilian power reactor that was cooled by something other than water. They're finally moving off of 1952 technology to something more modern and the NRC is not in the way as they've been in the past. So, I think that's a breakthrough and I hope that we see more of it. I agree and I really do hope so too because we need it for a lot of other reasons too because as AI comes not only there's a thing called Jevans paradox that when the cost of something goes down you get a lot more of it. So if the cost of creating software and the cost of using a computer becomes easier and I'm talking about my personal cost, your personal cost that we're just at the point where you just talk to your computer and it does things for you or you know it runs things for you automatically. You're going to have more of these and you're going to demand more of it and we're going to have more power demands for us not just for data centers but even for our personal use too. So as you make the cost of things go down, you get more of it. We're going to need more power in order to meet those demands. >> Jim, it seems like you and I agree on a lot of the Jevans paradox example as well as just the big picture of AI is a good thing, not a bad thing. But I think there is an angle we haven't acknowledged yet. And that is we already see a lot of divisiveness in the US and in the western world in general. Uh let's talk about what AI really does. It enables smart people to be a hell of a lot more productive, but it also does, I think, legitimately eliminate a lot of jobs for dumb people. You know, the the office worker that had to do the grunt work because the smart executive, you know, needs that assistance. Yeah, smart executive can pretty much be self-sufficient with AI and doesn't need the grunt workers anymore. Does this create a a further worsening of the K-shaped economy where the people who are well educated, intelligent enough to know how to leverage AI and use it to their benefit start to really do well, but you know, the guy who's not smart enough to figure out what it is is really in trouble. Oh, yeah. I mean, you know, you can even think about I read this a couple years ago and I'll assume it's still true that the IRS puts out these lists of whenever you fill out your tax returns, they ask you what your occupation is and you you write it down. And they did a study of that and the biggest occupation listed in the United States has the word driver in it. Taxi driver, truck driver, forklift driver, bus driver, fill in whatever, but the word driver like some millions and millions of jobs. Well, autonomous driving is coming and AI is going to power that. AI is going to power 50% of all of um minimum wage jobs have the word cashier in them. That's going to be done by AI as well. So, you're going to see a lot of these lower-end jobs that can be automated away. Now, the funny thing about AI is, you know, on the more science fiction side, you could argue that AI can help scientists cure cancer, but if you asked AI to power a robot to fold laundry, it's still struggling to to do that part of it as well. So, there's going to be other roles that are going to be that it can't really do right now. But the concern that I have with it is, and we saw this during the industrial revolution, that as we first get this new technology, the industrial revolution, AI, it automated away a lot of jobs. 200 years ago, it was, you know, farming jobs and the like. And all you saw was job loss first and then the job creation came second. Because keep in mind what we're talking about if you automate I'll use my example of driver. If you automate driver and all and the world is reduced to 50 million or 75 million autonomous taxis that run 24/7 365 and autonomous delivery trucks. the price of transportation is going to plummet and it's going to cost you practically nothing to ship either yourself to the airport or a product somewhere else. That is going to make business models that are not economic now and we don't even think about them because they aren't will be economic in the future. If you want a a near-term example of that, the Apple Eyes Store opened up business models such as Uber, Airbnb to be able to compete with taxi drivers and hotels because they had this new technology that you could now put an app out and people could use the app to book um book somebody's room in their house or book a private car to take you from A to B. And so it created a lot more jobs. So I do think that what technology has always done and I do believe is a net creator of jobs. So ultimately, yes, we might lose that driver job. We might lose that cashier job, but we're going to create whole new industries and we're going to need those people in other industries. The concern is the jobs get lost first, the new jobs get created later. And in that gap, people get angry. All they wind up seeing is job loss. All they wind up seeing is what they perceive as it making things worse. And in the 18th century when we had the industrial revolution, we got a push back. The push back was Frederick Engles and Karl Marx writing the communist manifesto and pushing back against the capitalist system. We might get a push back against this. Now, it won't be communism. that was a push back to a different era, but it'll be some kind of collective socialistic type of argument to put up a barrier from putting this together. So, I hope that the AI industry and I hope that the AI proponents understand that if all we're going to do is say, great, we can automate this and fire all these people and everything is better, it won't be better in the long run. It might be better for the very short term, but if we're going to create new opportunities at the same time, you lose your job here, but there's going to be this new industry here begging for people to help doing whole new things that we haven't figured out yet because of that new technology. I think that transition will be much softer, but that is a real risk right now. Well, Jim, I can't thank you enough for a terrific interview as always. Before I let you go, uh, tell our listeners who are not familiar with what you do at Bianca Research a little bit more about what you're up to. You got Wisdom Tree now following your work with an ETF that basically follows a fixed income index that you created. Tell us more about that, how people can invest in it as well as your Twitter handle and all that stuff to follow your work. >> We we put out Bianco Research which is an institutional research product at biancorresearch.com. If you're interested, you can sign up for a free trial there. Otherwise, I'm very active on social media under my business name Bianco Research on Twitter X, on YouTube, on LinkedIn and also we started a couple of years ago an in fixed income total return index which has its own website Bianco Advisors. It's a managed index to try and beat the benchmarks in the bond market. And u we have an ETF with our partners is Wisdom Tree as you mentioned. WTBN, Wisdom Tree, Bianco Nancy is its ticker symbol that tracks our index as well too. So you can find out more about it by looking up more about WTBN or looking at biancadvisors.com. >> Patrick Szna and I will be back as macrovoices continues right here at macrovoices.com. Now back to your hosts, Eric Townsend [music] and Patrick Szna. Eric, it was great to have Jim Biano back on the show. Now, Dr. Anas Alhaji is next on deck with a special second feature interview on the developing Iran conflict and what it means for oil markets. But first, you had a couple of announcements to follow up on from last week's show. What's on your mind? First, a few of you complained that last week's show failed to make clear how to invest in Alo Atomics, which is still a private company. As you already know, private companies like Alo can't market their private equity offerings to retail investors. So, unfortunately, if you're a US citizen, you need to be an accredited investor to invest in private placements, meaning that you have to have at least a million-doll net worth. You can find the exact requirements on Wikipedia under accredited investor. For our accredited and institutional audience, there is a safe offering right now that will be priced coincident with their upcoming series C share offering. The safe is capped to price at a lower pre- money than the expected series C valuation, but they're still shopping that series C term sheet and don't yet have a final pre- money valuation for the series C. If you are accredited and want to get in on the safe, you better move fast because it's a limited offering and they don't have much capacity left. The series C offering is also restricted to accredited and institutional investors and is expected to close by September after the company expects to have its first nuclear reactor up and running. The other thing I promised last week was that I'd lean on Patrick off the air to respond to the many inquiries that we've had about getting a webinar going for hedging tail risks in these troubled times. Patrick has agreed to that and we'll get to that announcement soon enough. But first, let's bring on Dr. Anis Alhaji for our second feature interview this week. And believe me folks, you don't want to miss this one. Dr. Anis is coming right up. Joining me now is Energy Outlook Advisors founder Dr. Anis Alhaji. Annis, great to get you back on in these troubled times. Let's start from the beginning. Some listeners who might not be completely on top of the latest news might be thinking, boy, you know, Dr. Ronis came on Macrovoices a few months ago and said the Iran military doesn't really have the military power to close the straight of Hormuz. From what we've heard in the news, it sounds like somebody did close the Straight of Hormuz. The thing is, it wasn't really Iran's military. Who was it? What happened? Well, uh, thank you, Eric, for having me again on your on your show. Um, a couple of things here. The first one is I still stand by by what I said earlier. Iran cannot close the Hermos rate. It is not in the interest of Iran to close the Hermistra. And even if they are able and they are willing, they will hurt their friends and they will not hurt their enemies. Israel does not import anything from that region and US dependence on the region is very small. So they hurt their own people and they hurt uh their friends. So what happened? Iran did not close the herrate. The herma street was closed because of an insurance fiasco and I would like to explain this to the audience in a layman term so they can understand what happened. The EU has certain regulations to avoid the bankruptcies of the insurance companies. Uh of course as you know sometimes bankruptcies happen because of lack of cash not because they don't have the wealth or they don't have the money. Just the lack of cash can cause bankruptcy. In Europe, they call they call it solvency. So to avoid solvency, they required the insurance companies to increase the amount of cash at hand as the risk increases. So the risk basically went up and they need to have more cash. Here is the problem. The insurance the cancellation of the policies did not happen because of any attacks in Hermraitrate or Gulf of Oman or the Gulf at all. The cancellation happened when a US submarine launched a torpedo which is the first since World War II. launched a torpedo on a uh Iranian navy boat that was participating in a drills with other countries in near near uh Sri Lanka and they killed about 130 people on that boat. Um so what happened is the attack happened in Sri Lanka. So for those who can imagine the map from an insurance point of view view and from a risk point of view now they have to cover the whole area from Basra in southern Iraq all the way to India and to Sri Lanka which has thousands of ships and boats and everything else and therefore the risk went up so much that it's beyond the ability of those companies to cover and hold cash. So they have an option and that's part of the rules of the EU. They have an option and that option is they can cancel within certain number of days and the lowest number is seven and they decided to go for the lowest number which is seven. Now all of those are British companies as you know the UK is not a member of the EU but the UK was a member of the EU when this was this law was adopted. after the UK left, they kept those laws on the books. So basically that was the case where shipping companies they don't have insurance and if there is no insurance they cannot leave and then some some insurance companies come back with a major increase in value because they have this war premium which is sometimes 50% to 75% of the value of the ship and there it's not worth it. this is extremely expensive. So all the ships got stuck and that was really the main reason why regardless of the rhetoric of the Iranians, the Iranians been saying this for 45 years. And here I would like to clarify another point. Uh we heard a lot about many attacks on ships and tankers in the region. Until last Saturday, there was not a single attack in the Gulf of in the in the street of Hormuz. Not a single one. Yet the media basically for a week been telling us about attacks in the in the Hormos tree. The media was telling us that. And this is really a serious issue because there were supposedly attacks very far away from the hero, but the media kept linking it. The second point is the first two ships that been attacked, they were two small boats. They carry Iranian oil. So does it make sense that Iranians will be attacking their own boats. So the first two attacks they were Iranian or or they were boats that carried Iranian oil, but they were small boats. For the others, the way the attacks are reported that anything that the captain report basically is considered an attack. So if a captain report that oh I heard a bang that is reported as an attack regardless the ship is not hurt at all. It's not hit but he heard the bang. Uh so what happened is because Iran was attacking the Gulf countries and they were uh intercepting all those missiles and the drones, they were falling on the heads of everyone. They were falling on houses, on buildings, on parks, on cars, on buses and on ships. And that was reported as an attack. So the reporting basically was uh is not accurate because they kept telling us Iranians attacked Iranians attacked. So the the whole fiasco that we have is an insurance fiasco. The final point on this is this. We know that when Trump, President Trump does not like something, he is outspoken and he is outspoken. If he to presidents, kings, uh, senators, congressmen, we know he is after them. He goes public and badmouth everything and yell and all kind of things. He for his adult life, I'm talking about like since he was 24 until now, he in every single interview, in every single writing, in every single book he wrote, he was always against high oil prices. This is the first time ever that he does not care much about high oil prices. The first time ever. And there is a big question mark here. Why? Even when he was asked by the journalist he said well just wait prices will go down later this is not Trump the one we know the other issue is so what I'm saying here is he despite the fact this fiasco was caused by the insurance companies he never mentioned anything about the insurance companies he never pressured them even to do something he never said anything few days later he came back he said oh we are going to ensure the um the ships and we are going to escort them through the Hermos trade and this is not going to happen. This is not happen. In fact, escorting them is kind of a big question mark because he went public saying that we destroyed all the Iranian navy. So if if the whole Iranian navy is destroyed, why do you need to escort ships? So there is a big question mark there. But the idea that he never said anything about the European insurance companies, there is a big question mark here. Uh why? Because there are many solutions to this, they are very easy. All he got to do is ask the EU and we know that they are scared of him and we know they yielded to him to remove that condition the cash condition or reduce it or suspend it for 30 days uh or something or reduce the risk area say oh it's only the hero trade from Oman to the middle of the Gulf and that's it they don't have to cover it all the way to Sri Lanka and that could solve the problem but he never said anything so it is the insurance companies and is still the insurance companies until now. >> So, the upshot is the operators of these tankers do want to transit the straight. The there's no reason that they couldn't get through. It's not like it's impossible to navigate those waters. They're not allowed to because they don't have insurance and they can't get insurance. And you and several other experts have gone on record saying, "Look, this is a serious problem for the world. It has to be resolved quickly or else we could literally get to $250 oil prices that could the global economy. Now, there's a little bit more to this story that doesn't add up to my mind, which is it's been reported number one, President Trump says Iran's navy has been destroyed, sunk, it's over, it's done. Number two, Iran's navy is actively setting mines in the Straight of Hormuz. They're mining the straight right now. Number three, Trump says they're going to be in big trouble if they do that. Wait a minute. If they don't have any ships cuz they already got sunk, how are they mining the straight of Hormuz? Something doesn't add up here. What's really going on on us? >> May I respond to that? The mining one? >> Yes, please. >> Okay. Because there is an issue that no one is talking about and it is a very serious issue. Probably it's it's it's like the nuclear bomb in this war. If they are putting if they are really putting mines in the waters in the Gulf and the worst thing or the last thing that Iranians want is to blow up a VLCC with 2 million barrels in it and the oil basically will land near their shores. Just in the Gulf alone they have more than 65 desalination plant water desalination plants. These communities depend heavily on water from desalination plants. They are going to die from thirst. Are the Iranians stupid enough to do that? But this is not only the the case. Uh we know that they they believe they are Shia Islam. Basically this is one of the sex in in Islam. They are Shia and they support they support the Shia in other countries whether in Saudi Arabia, Kuwait, Bahrain or or Iraq and most of the Shia populations in the region are along the Gulf and there are hundreds of diesel plants on the other side. So are they going to literally let their brothers on the other side die from thirst because they want to bomb those oil tankers? Just the story does not add up even from this side. So they want to transit this trait. They cannot transit this trait because of insurance. That's a an EU requirement that could be changed by the EU, but for some reason hasn't been. One way or another, you and others are on record saying this situation has to get sorted out and sorted out soon because if it doesn't, we could be looking at $250 oil prices which could the global economy and set us into a 2008 sized global financial crisis. So we need to do something. How is this going to get resolved? Do you think it's about to be resolved? And you know, what will it take? How do you see this playing out? >> Well, it is it is very clear that whatever the media been kind of feeding us uh was mostly propaganda. Uh the case on the ground is completely different from what the media is telling us. And this war must end as soon as possible for various reasons because the Gulf countries are being choked. And as you know those countries depend heavily on oil. When they try to diversify their economies basically they created industries. Now those industries are shut down because they cannot export or import and they try to diversify by focusing on tourism and that industry got killed. So we are literally killing our allies who promise to pay us two trillion or to invest in the United States $2 trillion from where they are going to get the two trillions if they have no money. So it is a crisis and not only that if you look at what's happening right now worldwide we are already to hearing about food shortages and in fact if you look at uh methanol and the use of methanol in bofuel and other things that are in food products and everything else uh you can play uh the go through the chain and you can see the impact on we might end up with food crisis before even energy crisis. And the issue here is there are tremendous benefits to the United States from closing the horostrade and these benefits are long-term and they are huge. You cannot even give put a price on that. But there is a lot of short-term uh pain that comes with it. So we have different time frames for the advantages and the pain and we don't know whether this is a deep state that does not really care about who is in the white house and they want to implement certain things. The reason why I'm saying this because uh the issue is not only about oil and gas and LNG. Uh if you look at helium for example, 35% of traded helium comes out of the hormone rate. You cannot make computer chips and semiconductors without helium and all of that goes to Asia. So if the objective is to bring this industry to the United States, well this is the great opportunity right now and that really good opportunity. Yes. because the US is the largest producer of helium in the world. You want to talk about um agricultural products and agricultural exports which Trump was promoting um 33% of the world traded or the seaborn traded um fertilizers go through the hero trait. If those Asian countries do not have enough fertilizers, then they have to buy from the United States agricultural products. And we talk about fertilizers. By the way, the 33% is misleading because that's what they import in term of final product. But they do have their own industries that manufacture fertilizers. But those fertilizers need the gas that come from Qatar or the NGL's that come from Saudi Arabia. So the impact is more than 33%. And we know that Trump basically was the uh uh marketer and chief of the US LNG industry and he wanted the agent companies to sign long-term contracts with US LNG industry. This is a great opportunity because the reputation of Qatar and the UAE got tarnished right now as a secure supplier while the United States has no problem. So the LG industry benefited if you look at the stocks just the US LNG stocks they they doubled in some cases just since the start of the war until today. So there are tremendous benefits to the US and these benefits have already been achieved. So if the purpose the are these benefits, the benefits are achieved. But if if these benefits that I'm talking about are not the purpose at all and they are just a byproduct of the attack on Iran, well let it be. But they are achieved. >> Okay, let's talk about the price signal, which frankly doesn't jive with the things that you're saying about what's really going on. Because what we saw is on Sunday's futures open, there was a massive shooting star candle printed. We went all the way up to what was it $119 on US West Texas Intermediate crude oil around 10:30 at night or so. It peaked. You and I were actually on a Twitter spaces together as that was happening. Well, hang on. There's been a massive sigh of relief since then from $119. We're down to $88 as we're speaking on Wednesday afternoon. It seems like President Trump said, "Okay, this Iran war is uh is winding down now." He made that statement. The market breathed a huge sigh of relief. As of our recording time Wednesday afternoon, the EU has not announced that the uh insurance rules don't apply anymore. The traffic is not really resumed, at least as as I understand it, through the straight, but the market is breathing a sigh of relief. Is the market wrong? What's going on here? >> No. So basically the market is being manipulated by the Trump administration in various ways. Some of them we know about and some of them probably we don't know about or we will know about later on by the end of the month. So we have President Trump basically making statements about the end of the war. That led prices to decline by about $20 and then by the second day we realized this is not the case. So prices went up again. Then the uh energy secretary came in, said something, put a tweet that was wrong tweet talking about the US Navy started escorting oil tankers out of out the out of the Hermos trade and prices plummeted by kind of like 17 $18. 5 minutes later he deleted the tweet and then the White House denied it. So this is pure manipulation and we don't know within those few minutes uh between the time uh he posted the tweet and deleted it who jumped on the wagon and bought etc. There is a lot of chatter about the US Treasury basically being heavily involved in the futures. Again, this is a rumor, but the fact that President Trump said something that was not correct and the secretary of energy said something that was not correct, that led prices to decline significantly. Uh this is pure manipulation of the market and that's why people are getting scared both sides scared from prices going up and scared from those manipulations basically ruining their savings and and uh ruining their lives if if if they lose a lot of money. Let's talk about the impacts of whatever is going on this uh manipulation game if that's what you think it is. Uh let's suppose that we go for another couple of weeks of not moving traffic in any meaningful size through the straight and that results in a lot of logistic dislocations where oil that was expected to arrive doesn't arrive and uh you get situations where the producers are backing up. In some cases, they may be forced to to shut in producing wells because there's no place to put the oil if the ships aren't allowed to leave. Uh what is this something where we've only got a few days before we hit a real crisis? Or could we tolerate a month or two of this kind of disruption? What are the consequences of waiting? And then once it does get resolved, how long does it take to work out the backlog and get everything back to normal? This is a historic event by every sense because it covers so many things and so many products and affects the people around the world. Uh and for the poorer countries basically they are going to be impacted the most. But the issue uh here that um we already seen the Gulf countries cutting production. We already have production cut about 7 to 8 million barrels a day. If this is going to last another week, probably it will go up to 10 or 11 million barrels a day. As you know, uh if we uh it will take about couple of weeks basically to get to to move all those ships out if everything ends. If the war ends and everything is fine, it will take about couple of weeks. But to bring all that production back to previous levels will take couple of months. And for LNG, it might take more than that. And the longer we stay and the higher the amount uh being cut, the longer is is going to be to bring it back uh online. And uh so we have a serious problem. Prices are not reflecting the actual risk. From my point of view, it seems that probably Trump knows that. Uh but that's why he's being calm. Otherwise, he would panic. And uh today the IEA announced they are going to release 400 million barrels from the strategic petroleum reserves of the 32 members but that is voluntary. Basically countries are free to do that and prices went up. Prices went up by more than 5%. At the same time, US oil inventories basically the numbers were released by the EIA and we have an increase in inventories higher than expected yet prices went up. Probably they would have gone higher without all this news. But the issue with the IIA and I would like to explain it here to the audience. It seems this is another manipulation because they chose a very high number uh kind of for impact. Uh and but the actual release is very small and the reason why unless we see the Trump administration basically retracting its statements and start releasing oil from the United States, this is only for few countries that do not want to pay the high prices for oil. They have oil that stored when oil prices were very low and they don't if they think this is going to last for two, three, four weeks a month, they can use their own inventories instead of paying the high price for it. So the the requirement by the IEA is that they have to keep uh 90 days worth of supplies in strategic storage. So to to avoid being in violation, they being given this way out today. the legal out today, go ahead and use it. But and and that's some that's why some countries basically will resort to their uh strategic petroleum reserves and do it. But the question here is this really let's go with the headline first. Let's say it's 400 million and everyone is going to release even the United States. This is of course the highest on record. This is the withdrawal from the United States would be higher than the one released by Biden and this is going to be very big. Of course, the United States has not announced anything yet. But let's assume that the it is 400 million. We have many problems with that. And the first problem is most of the release is going to be in the west while the shortages are in the east. So that's one problem. The other problem is so of course if you want to solve if you want to move the SPR from United States to to the east that takes about four four to five weeks to get it there. Probably the war will end by that time anyway. The other issue is one of the main problems we have in recent days that heavy crude price is is higher than the light crude price because that's where the shortage is and prices went up substantially. So we lost the Iraqi oil which is heavy crude but what we have in storage is either products we are talking about gasoline diesel what jet fuel etc or most of it basically is crude and it's medium sour or light so that does not solve the heavy crude problem and we don't have any additional oil coming out of Venezuela by the way whatever they produce and export that's it they cannot do more so from where that heavy crude is going to come Canada is maxed out at this stage. So there are some issues with that release even if the headline number is the correct number. >> Okay. So as I'm understanding what's really happened here, the world is perceiving the IEA has announced the release of 400 million barrels of oil from strategic reserve. Boy, that sounds like a really really big relief that's going to make a big difference. What's really going on, if I'm understanding you correctly, is the IEA has in its possession exactly zero barrels in strategic reserve that it controls directly. All it's really saying is if anybody else should choose of their own valition to want to release some of their reserves which we the IEA don't have any authority to tell them to release but if they decide to do it on their own we're not going to find them for it for breaking a rule that we used to have. Is that really the substance of this announcement? >> Yes. Yes. The SPR the amount in the SPR right now I just checked it. I think the uh in the press release they said it's 1.2 2 billion. I check the actual numbers. There is some exaggeration in this. It's closer to 1 billion than than 1.2 billion. So about 700 uh in crude and about 300 in products. Uh so the headline number basically is little bit exaggerated but still I mean the number is still huge anyway if they want to deliver on that. uh but the actual numbers again this is more it's not about a shortage mostly it is about some countries do not want to pay the high price and others probably if you look at South Korea in particular probably they need that oil because of they I mean within like couple of weeks probably they they really need that oil >> so what can happen here in order to get this insurance problem that it seems like is being under reportported actually solved so that everybody who's got a tanker that wants to transit the straight of Hormuz can do so. What do you think happens next here? >> I have a theory here. I know I don't want to take much of your time here, but I have a theory. Uh sanctions historically never worked. Even in term of inflicting pain, the pain was very minimal until globalization came in in the '90s. And with the globalization, what was globalized was two things. the fin the the American financial system and copyrights that was really what was globalized and once the the the American financial system was globalized it became sanctions became very painful. They are not effective in achieving their goals but they became very painful by adopting the US financial system. And now I am looking at it from that perspective and I look at it as a a financial experiment through insurance because if this is effective then we we have a new tool new foreign policy tool. And that's why we've seen some countries basically having their own insurance. And oh, by the way, I just remembered here is here is one for you to tell you that this is really not kind of a clear-cut game. A flight with 400 people can leave DHA without any problems, without the increase in insurance or anything else. But a boat leaving DHA is subject to that insurance, the heavy insurance. We know the fight is in the air. All those missiles, all those planes, all those attacks are in the air. So how come planes can fly but boats cannot go through? Well, honest, I suppose the difference is that the airplanes only carry enough petroleum to get them to their destination and they're not delivering oil to the other end. Um I I guess that begs the question, what are the implications of that? What meaning do you read into that? And then let's come back to my earlier question which is this has got to get resolved someday. When it does get resolved, how long does it take to clear the whole system out, make up the backlogs and get everything back to a smooth, properly operating global energy delivery logistics system. Regarding the first question, the answer is very simple. We should not discount the idea that this war may not be about Iran and it's a nuclear program. It could be more than that and Iran could be just one piece of the puzzle if you put it within the uh trade wars and sanctions, tariffs, Venezuela, Panama Canal, Red Sea, uh Greenland, you put it within this concept, you end up with uh Iran only part of that puzzle. All I am saying here is we should not discount this idea. Uh regarding the second question, if the war ends tomorrow, the crisis does not end tomorrow because it takes time probably couple of weeks to clear all the ships out of the Gulf on one side and for production to come back online probably we need about couple of months. But the damage to the Gulf nations have already been done. The reputational damage has already been done. That's it. and the reputational damage for Qatar LNG and UA LNG has been done. So anyone now who wants to sign long-term contracts, they have an increase in risk in those contracts and therefore they need to look for alternatives to minimize the risk in their import portfolios. Honest, before we close, I want to ask you about something you mentioned earlier, which is desalination plants and how they could geostrategically play into this whole equation. I don't I haven't heard anybody else besides you talking about this. How significant could that be? >> This is the nuclear war. This is the World War II. This is something above everything else we can imagine. Why? Because everyone in the region basically has dalination plans, including Israel. So if they start hitting the diesel plants of each other, people will die from thirst. So this is really the the nuclear option if you want to call it. >> You're saying rather than a nuclear strike, which is what comes to everybody's mind as the way to achieve that outcome, the way it would happen is actually by intentionally targeting desalination plants so that there's no water supply for entire countries. So what I'm saying is if Israel for example hit diesel plant somewhere in Iran and Iran retaliated and then somehow they hit another diesel plant in the Gulf and countries retaliated. So that's really where the problems are if they start hitting the diesel plants of each other. >> Well Annas, I can't thank you enough for a terrific update. listeners, so you know what to expect as this crisis uh hopefully resolves. But if not, if it continues to develop for as long as it does, we'll invite Dr. Anis andor potentially other energy and geopolitical experts back on the program in addition to our normally scheduled feature interview schedule. Uh we'll be getting Dr. Annis and others back in order to comment on this until the situation is ultimately resolved. Annis before I let you go what they can find at energyoutlookadvisors.com. >> So we do uh publish a newsletter uh mostly directed and at uh institutions uh and financial institutions etc. We do publish the daily energy report. This is for everyone and it's fairly cheap $420 per year. Uh but the materials that is covered in this basically just unmatched anywhere else. And uh of course we have uh Twitter and Twitter subscription too. Uh most of the stuff I put there basically is on Twitter. It is uh NS Alhaji A N A S A L H A G J G I. And folks, be sure to stay tuned for our postgame segment when Patrick Szna's trade of the week is going to focus on hedging and protecting portfolios in these troubled times. Then we'll get into an analysis of all the markets and what's going on. That's coming up as Patrick Serzna joins me as Macrovoices continues right here at macrovoices.com. >> Now back to your hosts, Eric Townsend and Patrick [music] Serzna. Listeners, we'll keep bringing you a second guest as conditions warrant it until the Iran situation eventually settles down. Meanwhile, thanks for your understanding that we didn't think of this last week. You'll find a download link for this week's trade of the week in your research roundup email. If you don't have a research roundup email yet, it means that you have not yet registered at macrovoices.com. Just go to our homepage and look for the red button over Jim Biano's picture saying looking for the downloads. Patrick, thank you for agreeing to offer our listeners a free tail risk hedging webinar. We'll come back to that soon enough, but first let's start with this week's trade of the week. I know you wanted to walk through one of the types of portfolio hedges that you plan to go deeper on in that webinar. So, how are you thinking about protecting downside risk in the current market environment? Eric, while the market is beginning to show some signs of classic short-term capitulation signals, the underlying conditions in the market remain fragile. Beneath the surface, there's still structural stresses building, particularly in private credit where redemption pressures continue to surface and in the systematic space where several flow triggers are now being hit, potentially shifting positioning in a way that can amplify volatility. At the same time, leadership in the largest mega cap stocks remain structurally weak, removing an important pillar of support for the broader index. So even if the market manages a near-term bounce, the environment still carries enough uncertainty that maintaining left tail protection remains prudent. Interestingly, a similar idea was highlighted earlier this week by Goldman Sachs derivatives trader Brian Garrett, who suggested that investors used the recent bounce to reset downside hedges on the S&P 500. his desk specifically pointed to a 9585 downside put spread as an efficient way to express that view. So if we take that framework and apply it to today's markets, let's walk through exactly what the hedge would look like in practice. With the S&P 500 trading around 6760, the 9585 structure translates into buying the April 17th 6425 put and selling the April 17th 5750 put, which costs a net of 56 points. Put differently, that's roughly 80 basis points of the index value to own this protection structure. And with roughly 5 weeks or about 38 days until expiration, that cost buys you a 675 point wide downside payoff window. If the market were to experience a meaningful draw down during that window, the spread can be worth as much as 619 points, which creates roughly 11:1 payoff profile relative to the premium paid. So the idea here is straightforward. In a market where hedges were recently unwound and volatility could easily reexpand, paying a small percentage of portfolio value for a defined period of downside convexity is a reasonable way to reset protection and manage left tail risk. Well, Patrick, I think this is really topical considering Anis's view that the market may be breathing a sigh of relief prematurely. So, what's the plan for the free webinar that you agreed to offer our Macrovoices listeners? In the webinar, I'm going to go much deeper into exactly these kinds of portfolio protection strategies. We'll walk through the key risks I think could drive a deeper pullback from here, why simply moving to cash isn't always the best solution, and how option hedges can help protect a portfolio while staying invested. I'll also break down a real hedge structure I'm watching right now, including the strikes and expiration and show you how it fits into a broader portfolio protection framework for uncertain markets. The reason we're doing this as a live webinar is that I can actually build these trades visually in the options chain in real time which makes them much easier to understand than trying to explain these structures in this audio only format. So for those that want to attend, we'll be hosting it on March 16th at 400 p.m. Eastern and macrovoice listeners can register for free at bigpicturetrading.com. Patrick, every Monday at Bigpicture Trading, your webinar explains how retail investors can put on our most recent trade of the week. For those listeners that want to explore how to put on these trades in greater detail, don't miss out on a 14-day free trial at bigpicturetrading.com. Now, let's dive into the postgame chart deck. >> All right, Eric, let's dive into these equity markets. What are you thinking here, >> Patrick? Let's revisit the wartime playbook that I described last week. First comes the panic. Oh my gosh, there's a war on. Check. We traded below the 200 day moving average during the Sunday night market panic right after the futures open. Next came the sigh of relief. President Trump says the war is ending. Back up almost 250 S&P points on cheers that the war is over. Oops. Wait a minute. As Dr. Anis has explained, it's not over till it's over. And as of Wednesday afternoon, the market was figuring that out. Bigger picture, we're still in the panic phase that I described last week, which is coming in waves. Do we get to a new lower low? Probably depends on what happens with the oil market situation. Uh definitely heed Anonis' advice on that one. So, it's not clear whether the bottom is in yet. There's plenty of room for more panic if the market scare is not yet over. If oil prices really did go super high shortterm, and that's definitely possible if the I shouldn't say the straight remains closed. the straight is open. If the insurance companies remain uh inclined to block traffic from being allowed to transit the straight, which has been open the whole time, uh well, you know, if the oil doesn't flow, anything could happen. We could easily see $250 oil prices that would definitely tank global equities in a 2008 style of crash. The thing is, I don't think that that's going to happen. There's no reason that they can't just fix this insurance problem and get the Hormuz traffic back to normal. Once the market stabilizes, I think we'll probably get into that aha moment where people say, "Oh, wait a minute." And wars are inflationary, it's usually good news for equity markets, even if it's bad news for humanity. And that's when the rally kicks in, the serious rally that takes us back up potentially even to all-time highs. We're not there yet, and we don't know if we're going to get there. It depends on how this thing unfolds. But I do still think that's possible if the governments and other parties are swift in getting this insurance situation worked out and the traffic back to flowing efficiently through the straight of Hormuz. Well, Eric, this is the way I'm sizing this up. The first thing I want listeners to do is ask themselves a question as to what they believe the actual driver is of the current equity weakness. We have seen a substantial deterioration in financial conditions from uh breakdowns in the financial stocks to uh breakdown in many of the tech names. The MAG7s continue to lag. Uh we are seeing now that systematic traders trigger levels are now being hit and so there's a lot of underpinning issues in the market including the private equity space. So the question is is that is the market deteriorating because of these types of conditions or is it a focal point on what's happening with the war and the impact of oil prices rising? [snorts] Now I obviously both of them influence I don't want to say one is more important than the other but in the end if the resolution to the Iran situation deescalated would that solve all of the other problems and would the stock market be able to just go higher? Overall, I think that there's a lot of problems for the markets here. And while we hit some very shortterm over uh sold conditions that warranted it a bounce overall, the new trend is actually down, there is zero evidence that the bulls have actually regain their footing. Overall, you know, if we rally back up to the highs, I would have to accept that there is some sort of uh neutralizing of the downtrend and potentially a bull um breakout setting up. But as of this moment, the downside window is open for me and we could easily see a 10 plus% market drop um from peak to trough before this is all over. So Eric, let's move on. What's your thoughts here on the US dollar? Well, we're back to 99 12 on the Dixie testing top of trading range resistance. This is definitely war driven. It can definitely go higher on more instability that could ignite a short squeeze and a trend following uh continuation rally and you know a whole bunch of things could happen. But I return ultimately to the fundamental question that I posed last week. Is all of this really dollar bullish or are we seeing more and more fundamental moves that will actually incentivize more central banks to divest dollar commitment and move to other assets? I think that what we're seeing here is just a reaction to the liquidity panic. I don't think it's a structural or fundamental driven new bull market in the dollar. So, I see plenty of room for a downside reversal in the Dixie, but not until this is over. And as Anna said, it ain't over till it's over. Well, under normal conditions, we are in a six-month trade range on the dollar, and we've just traded to the top end of this range. And so, the idea that overhead resistance on the dollar could uh structurally be a headwind uh is possible. And the fact that dollar weakens back to its previous lows is also on the table. But what I'm thinking about right now is whether or not there's a bigger intermarket flow issue from a uh in a riskoff period where the dollar is being bid. And if we see that that uh is able to break out of this six-month trade range to the upside, that could certainly pivot flows with no real fundamental reason behind it, driving even a two or three point rise up to 102 or 103 on the Dixie. Overall, um, if the entire intermarkets remain riskoff and under a lot of stress, I'm not ruling out a dollar breakout here, but I think it's not going to do it on its own. It's going to be a bigger market story. All right, Eric, touching on oil. Well, we covered most of the oil market with honest. There's not a whole lot left to say. The one thing that I've been dwelling on ever since recording that interview, which now for me is uh several hours ago with Dr. honest is his comment about wait a minute this was not a hard problem to solve. If the US had really wanted to solve this insurance problem it shouldn't have taken this long. So what's really going on here? Is somebody not in a hurry on purpose in order to fix this and get the oil flowing? And if so, how long are they going to continue to want to take their time about fixing it? Because this doesn't really add up here. Maybe it's incompetence. Uh maybe there's more to it. I don't know. But let's see if it's not resolved in the next few days. It clearly could have been. So if not, why not? What's going on? That's the question on my mind. Well, you're right, Eric. And us did cover a lot. Overall, it's very hard to do technical analysis on something that is moving with this kind of velocity. Overall, the dip was bought at fib zones. And so, the idea here that oil can still surge higher is something you can't rule out. Overall, it's uh one of these scenarios where the best way to put on trades at this stage is using some sort of option structures. There's a a fat right tail. Bull call spreads can usually give you pretty good payoff structures. So, if you're playing further upside on oil here, uh using uh bull call spreads is a very attractive way of approaching this. All right, Eric, let's touch on gold. Clearly, we're seeing a decoupling from the normal, you know, geopolitical upset means gold goes straight up. That seems to have run out of steam for whatever reason. The downside risk here, though, is not that fundamentals have changed. I don't think that they have. I still think the fundamentals are super bullish long-term for gold. The issue is what happens if everybody else starts selling their gold in order to meet margin calls on other things. And that goes back to the it's not over till it's over. In 2008, and just as a caveat, I'm not expecting a 2008 outcome. But in 2008, even though the gold fundamentals were very bullish ultimately, what we saw was a huge sell-off in gold. Why? Because people sell what they can, not what they want to when a market is crashing. So, the cashless collar strategy that Patrick did a trade of the week on a few weeks ago, I to stay long on gold while still hedging against left tail risk with a cashless collar, not costing you anything other than limiting some upside. That strategy is still more relevant today probably than the day that it was aired. So, go back and listen to that one again if you want to understand how to put that risk collar on. >> Well, Eric, for me, gold is stuck in a little bit of a tug-of-war. one side you have geopolitics, but on the other side you have a flows issue that we had a blowoff top in January and we're in the midst of some sort of a consolidation. Overall, I'm structurally bullish on gold, but it wouldn't surprise me if gold continued to churn in a trade range uh into the second quarter and only after the overbought condition is fully unwound does the opportunity for a new breakout play out. Overall, uh I think that the lows that were put in near 4,500 are likely to remain the lows unless there's a liquidity event, uh where all asset correlation goes to one and gold has a little flush out, but uh I'm not signing a high probability to that. Overall, I think 4500 will uh ultimately prove to have been the low for this first quarter. And so, it's just a ma matter of seeing when this consolidation is over and when a new bull phase has resumed. All right, Eric, what are your thoughts here on uranium? Patrick, the fundamentals are still uber bullish and they're getting better by the day. We see more and more nuclear announcements and in some ways this oil crisis is underscoring for a lot of investors and other people, hey boy, we really do need this nuclear renaissance. Look, it's gotten to the point where even Ursula Vanderlayan gets it now. So, I think long-term the fundamentals are still super bullish, but hold on. If the market broadly is going to continue selling off, which it may as uh the situation's not over till it's over, it will probably take uranium back down with it. We didn't quite get all the way down to the 200 day moving average on some of my uranium charts. I think there's plenty of room to get there. It's probably a buy when we do get there. Uh it so far uranium's been holding up better than the broader market, but if we get a big broad market risk event and especially if we get a big gold selloff because of that, it'll probably pull uranium with it. Frankly, I'm kind of hoping that happens because it's going to be a buy the dip opportunity. The question is always on a buy the dip is how low is the low where you want to start buying? I'm not exactly sure, but I think there's room to go lower than we are now. Well, whether or not the fundamentals are bullish, overall right now, there is no money flow going into the uranium space, at least from uh the spat physical securities. Overall, I do think that there's obviously all the bullish opportunities, but we're going to be looking for a technical breakout to suggest that flows have started to come back into the space and it's a a here and now story. Overall, this consolidation continues to dominate at least on this short term. Patrick, before we wrap up this week's show, let's hit that 10-year Treasury note chart. Eric, clearly the oil spike has created nervousness about inflation fears, and that is reflecting in these rates. Now, while we did hear a great uh take from Jim Biano, the one thing I continue to think about is will the Fed respond to supply side inflation because this is not really monetary inflation. And so it's entirely possible that this would result more in a Fed that is a wait and see more than a Fed that becomes hawkish. Nonetheless, uh we'll uh see how it shapes up in the weeks to come, especially since we have the FOMC meeting next week. Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck or just go to bigpicturetrading.com. Patrick, tell them what they can expect to find in this week's research roundup. So, in this week's research roundup, you're going to find the transcript for today's interview, as well as the trade of the week chart book, which is discussed here in the postgame, including the link uh to the special webinar we're hosting on hedging your portfolio, which we're hosting on March 16th on Monday at 4:00 p.m. Eastern time. And you can register at bigpicturetrading.com or click on the link in your research roundup email. We also included a number of links to articles that we found interesting. So, you're going to find this and so much more in this week's research round it. That does it for this week's episode. We appreciate all the feedback and support we get from our listeners, and we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners that write or blog about the markets and would like to share that content with our listeners, send us an email at researchroundup@macrovoice.com and we will consider it for our weekly distributions. If you have not already, follow our main account on X, macrovoices for the most recent updates and releases. You can also follow Eric onx, Eric S. Townson. That's Eric spelled with a K. You can also follow me at Patrick Serzna. On behalf of Eric Townson and myself, thank you for listening and we'll see you all next week. That concludes this edition of Macrovoices. Be sure to tune in [music] each week to hear feature interviews with the brightest minds in finance and macroeconomics. Macrovoices is made possible by sponsorship from bigpicturetrading.com, the internet's premier source of online education for traders. Please visit bigpicturetrading.com [music] for more information. Please register your free account at macrovoices.com. Once registered, [music] you'll receive our free weekly research roundup email containing links to supporting documents from our featured [music] guests and the very best free financial content our volunteer research team [music] could find on the internet each week. You'll also gain access to our free listener discussion forums and research library. [music] And the more registered users we have, the more we'll be able to recruit high-profile feature interview guests for future programs. [music] So, please register your free account today at macrovoices.com if you haven't already. [music] You can subscribe to Macrovoices on iTunes to have Macrovoices automatically delivered to your mobile [music] device each week free of charge. You can email questions for the program to mailbag@macrovoices.com [music] and we'll answer your questions on the air from time to time in our mailbag segment. Macrovoices is presented forformational and entertainment purposes only. The information presented on macrovoices should not be construed as investment advice. Always consult a licensed investment [music] professional before making investment decisions. The views and opinions expressed on Macrovoices are those of the participants and do not necessarily reflect those of the show's hosts or sponsors. Macrovoices, [music] its producers, sponsors, and hosts, Eric Townsend and Patrick Serzna shall not be liable for losses resulting [music] from investment decisions based on information or viewpoints presented on Macrovoices. Macrovoices is made possible by sponsorship from bigpicturtrading.com [music] and by funding from Fourth Turning Capital Management LLC. For more information, visit macrovoices.com.
MacroVoices #523 Jim Bianco: Energy, FED & Economy in the wake of Iran conflict
Summary
Transcript
This is Macrovoices, the free weekly financial podcast targeting professional finance, high- netw worth individuals, family offices, and other sophisticated investors. Macrovoices [music] is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred. Now, here are your hosts, Eric Townsend and Patrick Szna. Macrovoic's episode 523 was produced on March 12th, 2026. I'm Eric Townsend. Biano Research founder Jim Biano returns as this week's feature interview guest. Jim and I will discuss everything from the geopolitical situation in Iran to oil prices to precious metals and much more. We got a lot of positive feedback on last week's Advanced Nuclear Energy interview with Aloto atomic CEO Matt Lozac, but also a few criticisms. A few of you said that we should have been clearer about whether or not there was a present opportunity to invest in Aloto atomics and how to go about it. I'll revisit that after today's feature interview. But the much stronger criticism was that we picked a hell of a week to step away from macro and run a nuclear energy interview as war was literally breaking out in the Middle East. Look folks, our guest interviews are scheduled weeks in advance. So, there's no way that we could have anticipated or coordinated the timing of the Iran conflict with last week's feature guest booking. But what we should have done last week is the same thing that we did on January 30th of 2020 when we dropped everything to bring in a second feature interview guest, Dr. Chris Martinson, who correctly called the COVID pandemic in that episode during a second guest interview. Sorry folks, we didn't think of that last week, but we can definitely make up for it this week. So, be sure to stay tuned after the feature interview with Jim Biano for a second feature interview with none other than Dr. Anis Alhaji, who will break down why this conflict probably isn't over the way the market was interpreting the news flow as of Tuesday night, along with Dr. Anis' analysis of what still needs to be sorted out before the conflict and markets can return to normal. All of that's coming up on this week's podcast. But wait, it doesn't end there. Patrick's trade of the week will focus on hedging portfolio tail risks in these troubled times and we'll have an announcement about another free portfolio hedging webinar from Big Picture Trading. And then of course we'll have our usual postgame chart deck. So make some popcorn for Jim Biano's feature interview and put your seat belts on for Dr. Anna Alhaji's explanation of why it ain't over until it's really over and how it's maybe not quite over in terms of this oil situation. Then stay tuned for the postgame chart deck and market discussion. And I'm Patrick Szno with the macro scoreboard week overweek. As of the close of Wednesday, March 11th, 2026, the S&P 500 index down 137 basis points, trading at 6775. The market is in the midst of a correction. The question is how deep does it go. We will take a closer look at that chart and the key technical levels to watch in the postgame segment. The US dollar index up 24 basis points trading at 99 and a quarter, trading at the top of its range, begging the question, will it break out? The April WTI crude oil contract up 1686 basis points to 87 and A4. It almost hit $120 on the weekend news as volatility remains off the charts. The April Arbomb gasoline up 116 basis points trading at 279. Prices at the pump up almost 70% year to date. The April gold contract up 88 basis points trading at 5179 continues to consolidate after January high was put in. The May copper contract down 17 basis points to 5.89. The March uranium contract down 23 basis points trading at 8570. And the US 10-year Treasury yield up 12 basis points trading at 423. A material rise in yields as traders are nervous about rising inflation. The key news to watch this week is the core PCE price index on Friday. And next week we have the PPI inflation numbers and the FOMC Bank of Japan and ECB policy statements and conferences. This week's feature interview guest is Biano Research founder Jim Biano. Eric and Jim discussed the financial market implications of the Iran conflict, the risk that higher oil prices could keep inflation elevated, the role of stable coins in the global dollar system, and how rapid advances in agenic AI could reshape productivity, energy demand, and the future of work. Then stay tuned for our special follow-up appearance by energy expert Anas Alhaji, who joins Eric later in the program to break down the latest developments in the oil markets and what the crisis in the straight of horm could mean for global energy supply and prices. Eric's interview with Jim Biano is coming up as macrovoices continues right here at macrovoices.com. And now with this week's special guest, here's your host, Eric Townsend. Joining me now is Bianco Research founder, Jim Biano. Jim, no shortage of things to talk about this week. Let's discuss the Iran conflict, what it means, what comes next. Uh, how are you looking at this >> being that we are financially oriented and that's our real interest is we have to look at this from a financial standpoint. What does that mean for financial markets and potentially the economy, global economy in general? And obviously the answer is what does it mean for the price of crude oil? And in the immediate short term, we've got a problem in that the crude oil is not moving. Crude oil is kind of like the circulatory system of the world. It it gets it gets pumped. It gets put into storage. It gets put on the tankers. It gets sent to refineries. and the system constantly has to be moving. Well, right now we have a big blockage and that blockage is in the straight of Hormuz. Now, the good news is we have not really done any damage to the system. Not that I've seen in terms of stories, you know, we haven't blown up a bunch of infrastructure or pipelines or wells or ports or anything that would cause an extended period of time to repair it. We've got a bunch of ships sitting around waiting for the ability to go through the straight and keep that circulatory system moving. So, the hope is that this is a short-term problem. Short-term being 2 to 3 months, you a couple of weeks to get this resolved and then 6 weeks to two months to maybe get that circulatory system moving. The concern is the longer this goes, the more we keep lobbing missiles at them and they keep lobbing missiles at us or their neighbors, the higher the probability that they're going to break something that will take a significant period of time to fix and that will create a bigger problem for the [snorts] energy markets. So for right now, the hope in the energy markets and I share that hope for right now is all we're doing is we're waiting for the straight to get hope in so we could start moving that the moving the crude oil again. You know, we haven't sunk any of these ships or anything, but the concern is the longer this goes and in the middle of a kinetic war, the longer it goes, the higher the risk is we break something. >> Let's talk about what the impacts are if something does get broken and it delays the ability to deliver crude oil. It seems to me like obviously there's a cost to the economy which is the the most immediate effect of all of the sudden energy costs much more and it's it's crippling on the productive economy. But I think there's a lot of knock-on effects. The first and biggest one in my mind is the inflation wave that that creates. Inflation tends to be self-reinforcing. So you get the potential that you've started a fire you can't put out. And then there's probably several other feedback loops. So when you think about what if they do break something that results in even after the uh the piece has been made, it's going to take a long time to fix those broken things before we get the oil delivery system back to normal. What are the knock-on effects that you see financially? >> So first of all, I'll I'll measure the knock-on effects in a very marketoriented way. If you look at the forward curve in the crude oil futures market, it is in record backwardation. By Sunday night, uh on March 8th, it hit minus 25%, meaning that the sixmon out the September futures for WTI was 25% lower in price than the April futures, which is the current contract. And that is the most extreme that it's ever been um right now. So one way you can look at that is that the market is still pricing and hoping that this is going to be a short-term thing. So if we break something of significance, how do we know it? I think you would see that backwardation start to narrow a lot because those deferred contracts would start to rally to meet where the spot contract is. But you're right, if that were to happen, you're probably going to see more inflation. Now, all things being equal, we've been doing a little back of the envelope calculation with the price of gasoline in the United States in the last 8 days. The war, the day we're recording, March 10th is um the 10th day. So, we've got 9 days worth of data. Price of gasoline is up 18% or 55 cents. All things being equal, that probably is going to give you a March CPI report of around 610 or 710. That is probably going to push year-over-year inflation over 3% for March. Now, every economist will say, "Oh, but that's temporary. That's just an inflation thing." Correct. Unless, of course, those deferred contracts and rally the backwardization narrows. And then you could start talking about April being elevated. You could start talking about May being elevated as well. I don't think this is going to produce big inflation like 7 8 9% inflation. But what it can do at least in the very short term of the next 3 to 6 months if not longer is keep the inflation rate around 3% if not above 3% higher if the crude oil situation worsens. I've been arguing that the Fed cannot cut rates if that's the inflation rate. We have gotten used to and we are still used to that 2010 to 2020 period where no matter what the Fed did, they couldn't get or no matter what the economic circumstances were, the inflation rate never got above 2%. In fact, it averaged around 1.6 during the 2010 to 2020 period. So at any wobble in the economy, print money, cut rates to zero, print more money. And that mantra remains to this day that whenever markets or economies wobble, print. You can't do that if we've got inflation. Because if you print, what you're trying to say is the economy is wobbling, financial markets are under stress. We need to create easier financial conditions by cutting interest rates or expanding the Fed's balance sheet. But in this environment, if you do that, then you're saying to bond traders, we don't care about your real returns. You have a fixed income investment, and we're willing to risk inflation going up even though your investment's fixed income. You should sell bonds right now. And so if they were to try and be easy in this type of environment, you could wind up with higher interest rates and actually making things worse, making it actually tighter. So one of the things about the higher inflation is it takes the Fed off the table even if we get worsening employment numbers even if markets start to wobble a lot more because the res the reaction would be oh markets are in trouble or the economyy's just weakening we have to cut. Yes. And then if 10-year note traders run away from the 10-year note and those rates start soaring you've made things worse. they're going to want some assurances that they're not going to lose money because inflation's going to go up. So that's where I think the the nuance is going to come in. This is not the 2010 to 2020 period. And if we have enough inflation now because of the rise in crude oil that we've seen and the rise in gasoline we've seen now to keep the inflation rate above three, the Fed is just off the table. They just cannot step in and start cutting rates under that environment. Jim, at the risk of nitpicking semantics, I want to come back to your your language around saying the Fed cannot cut rates. I think you just made an extremely good argument for why they should not cut rates. Are you really convinced that they won't? >> Oh, yeah. I guess you're right that in in a semantic argument, I I would argue they should not because the risk is they make it worse. That's what I meant by cannot is that they need to be very very careful. Now, obviously, if things were to deteriorate to the point where you would argue that they would overwhelm whatever higher inflation you would get that the economy would be so weak that even with higher energy prices, it would offset that. You could then see the Fed cutting rates. But we're talking about like a almost like a rerun of 2008 or 2020 in that type of scenario. And as we're talking now, the stock market isn't even 5% off of its all-time high. So, we're nowhere near that type of scenario. But you're right. I should have said they really should not because the risk is that in the attempt to try and make easier financial conditions by cutting rates. They spook bond traders that they're not acting in their best interest. They sell, rates go up, and you actually wind up making tighter financial conditions, and you wind up making it worse. Jim, let's take that a little bit further and talk about the next step with Worsh taking office as Fed chair. You'll have to refresh our memory on exactly what date that becomes effective. It seems like we don't have a really clear signal. A lot of people thought he was more hawkish, but then again, it seems like he's extremely loyal to Trump. He's going to give Trump whatever he needs. I agree with you in what you said about the reasons the Fed should not cut here. I don't think President Trump got the memo on that. And if Wars is going to do whatever Trump wants, and I'm not sure if that's the case, it seems like there's a potential that the Fed does cut. Am I missing something? >> No, you're not missing anything at all. Just as a quick aside, I I'll remind everybody that Donald Trump is a real estate guy, and I've yet to meet a real estate guy who has not met an interest rate that he doesn't think should go lower. So, I'm not surprised that at every turn he just keeps demanding lower and lower interest rates because every real estate guy does that. Now, as far as Kevin Worsh goes, you're right. The problem we face right now is we're all saying he's hawkish. And why do we say he's hawkish? Because we're going back and looking at what he was saying in in writing back when he was a Federal Reserve governor during the financial crisis. I hate to date us all, but that was 20 years ago, 19 years ago, um, at this point. And we don't really know where his thinking is currently because in the last 8 months, he's only given two public appearances. And he was kind of vague on where he stands on this. Now hopefully when they do get his confirmation hearing scheduled, he'll have an opportunity to explain his thinking a little bit more fully. And as far as the date goes, it's May 15th is the last day for um J. Paul. So all things being equal, Kevin Walsh would be the chairman at the June meeting. So that would mean the next two meetings, the March 18th meeting and the early May meeting will be uh Jay Pal will preside over those. So he's got two meetings left and then we'll have Kevin Walsh unless there's a snag in his confirmation hearings in any way. The bigger issue I think he's going to face other than you know he will articulate a comment or a view I assume that will say that we should be cutting interest rates is that the Federal Reserve has been changing its stripes. The individual members of the Fed have been really talking a lot more independent than they've ever been and they've really been acting more independent. We've seen way more dissents in the last three or four meetings than we probably saw in the last 5 years combined. And I don't think that's a fluke and I think that's going to continue. so much that I've argued that Fed watching is no longer about parsing the individual words of what the chairman says, but it's really about listening to all the voters and putting them in the cut, hold, or hike column and asking the question, which one has seven votes? And whichever one has seven votes, that's what the Fed's going to do. And as of right now, as I look at the Fed speech broken down, of the 12 voters, fully 10 of them have made hawkish comments. I mean, basically Steven Morin is made, you know, he's still pretty doubbish, and you might argue Chris Waller is kind of on the fence, but the rest of them are pretty hawkish. So given all of that, if we had a Kevin Worshes Fed chairman right now and he said, "Look, we have to cut rates." I would just turn around and say where the other six votes you're going to get to approve that rate cut because if they're going to vote the way they're talking and I assume they will. I don't see where those votes are coming from. So I think that's going to be the next big thing we're going to see when we get this new Fed chairman is how much of it is really going to be about parsing his words and how much of it is going to be really just about voteing and just trying to figure out where all the votes are coming from. Let's talk about the broader economy and where the market was headed before this whole oil shock happened even before the decision was made to go ahead and have an attack on Iran. It kind of felt like the market was rolling over and you know maybe we're heading into a soft patch here. Uh we've just tested the 200 day moving average at least very briefly in the overnight session on the S&P. Is it over? Is it at all clear or are we really just kind of back to where we were of wondering if it's time for this market to run out of steam? >> I think you when it comes to the economy that there's really an issue that is difficult for a lot of economists and a lot of other people to really get their head around and that continues to be the story about labor supply. We got the February employment report back um last week, the week before we're recording and it came in at a stunning number of minus 90,000 jobs. And yet the reaction in the market was very muted. You would have thought you would have saw interest rates plunge and you would have thought you would have saw uh maybe the the stock market take it poorly and it largely didn't. Now, part of that might be because it was still wrapped up in paying attention to oil, but I do think that it really comes down to the other issue, and that is what is the biggest driver of labor because labor is the most important aspect of any economy. How many people have jobs? How many people are going to be able to get a job? And the biggest aspect of labor, I think, comes to population growth. And we have no population growth because of the um slow of what's happening at the border. And there's arguments to be made that the number of jobs that the US economy needs to create is somewhere around 0 to 50,000, probably with an average closer to 15 to 25,000 jobs a month. That's all the US economy needs to create right now. It's not 150,000 like it used to be a couple years ago. And again, that's because if you don't have population growth driven by immigration, the number of 15 to 64 year olds or 16 to 64 year olds, excuse me, that's the working age population isn't growing. And if that's not growing, you don't need to create a number of jobs. That's why I think we also have this other instance where if you go back to the summer of 2024, the US economy on a 12-month average basis was creating about 150,000 jobs a month in the year ending July 2024. In the year ending in February of 2026, that fallen from 150 to 9,000. But the unemployment rate hardly moved. It was a 4.2% in July of 2024. It's 4.4% 4% in February of 2026 up two ten while we lost all that job growth. Now why isn't it higher? Because we don't need that many jobs is really where I think it is. And that really gets to the other issue too is that if we don't need that many jobs and none other than Jay Pal talked about this at his last press conference maybe at these very low numbers that we're seeing with employment we are still in balance. And if we are still in balance, the risk you face is that if you overreact to these supposedly weak numbers and cut rates too much, again, that could be perceived as overstimulating when the economy doesn't need it. So, I do think that when you look at the market, I don't think it's necessarily looking like it's going to roll over on the idea that the economy is weakening because I think that the numbers have so fundamentally changed here right now. And it's a admittedly it's a hard thing to get your head around because when you say that the population growth is down then people ask can you be more precise and the answer is not really because demographers have never been structured to give us high frequency updates in the population of the United States because they've never had to you know and so what about uh labor force participation those numbers are constantly revised but we do know that the population growth has come from immigration because of the low fertility rate and we do know that immigration is most likely negative right now. You know, more people leaving the country than entering the country. As we're recording on Tuesday afternoon, we're looking at about 5,200 on the gold price. Something I reported last week on Macrovoices is it feels like there's been a change in the reaction of gold to geopolitics. We had last Monday uh we had a situation where bombs are dropping, oil is going straight up and gold was down literally uh $400 over the course of just 10 hours. We saw kind of the same thing on the Sunday futures open where it was just a moonshot on on oil prices in reaction to escalation over the weekend in the straight of Hormuz and so forth. And obviously oil is the the direct affected commodity. But you didn't see the expected gold up with oil. It was actually gold down. Feels like somebody is either selling gold to raise money to cover their losses on something else or selling into strength or something. It feels like there's been a disturbance in the force with respect to precious metals. What do you think is going on? You know, sometimes the easiest answer might be the best answer is that first of all, gold and silver as we know from early February had that massive reversal and while they haven't followed through on the downside, their upward momentum is stalled. So, you've got a lot of people that have a lot of unrealized gains in those. And when you look at markets wobbling and you wonder that if people need to sell something, there's the old adage on Wall Street, you sell what you can, not what you want. And what you can sell is the thing that has big unrealized gains and no momentum. So whether it's to meet a margin call or a perceived margin call like Sunday night when futures S&P futures were down 2 and a half% at their worst point or in oil because of the big whipsaws we've seen in it. So somebody's going to get hit with a margin call. Where are they going to get the money from? They've got this other thing here. We assume that they're holding that they've got a big unrealized gain and they can sell it. So, I think that there might be some of that um going on with gold because you're right, normally speaking, all things being equal, if you've got geopolitical stress, the textbooks say gold and silver and precious metals are the place to go. But they have definitely not been the place to go since February 28th because they have not been responding to this. >> Jim, that as you said was the old school adage is precious metals. Of course, the new age version of that would be cryptocurrency. How has that fared since February 28th? Yeah, it's been more of the same. I mean, it's really struggled to do anything right now. Now, it's very volatile. You could say it's up five or six%, but in Bitcoin, five or six% is kind of an average day. So, it hasn't really done anything to establish any kind of an uptrend as well. But I also think that they're also stuck in a different type of cycle as well, too. Bitcoin peaked at the end of October, $126,000. at its lows in February, it was down 50% from that high. So, it has definitely broken momentum as well. And I think the narrative behind Bitcoin has is been changing right now. The narrative used to be that institutions, retail investors through wealth managers, and everybody's going to buy it through these new products like the ETFs, and they're all going to say kind of the old gold story. Remember if all if only anybody everybody only owned 5% of their portfolio in gold, it would go to the moon. Well, that was kind of the argument that they were using with Bitcoin was if everybody just bought three or 5% of their portfolio in Bitcoin, it would go to the moon. I think that narrative is over with right now. Now, the potential for a new narrative is out there. And I think the new narrative, if that old narrative was permission, that the regulators were giving you permission with it, that Wall Street was creating products to give you permission to own it, the new narrative for it might be replacement instead of saying, because I've I've seen on social media a lot of Bitcoin enthusiasts saying, "Oh, don't worry. You know, Larry Frink and Black Rockck are talking about tokenizing every asset in the world, and that'll be bullish for Bitcoin." And I was like, why are you waiting for Larry Frink to do it? Why doesn't the Bitcoin development community do it instead of him? So maybe the next narrative will be replacement. Instead of waiting for regulators to approve it, waiting for Wall Street to create products for regular people to trade on it, why don't you create an alternative system and say, "This is better than the old system. Let's go play on that game and let's play it in this way." Jim, you told me off the air that you heard my interview recently with Michael Every about stable coin statecraftraft and that comes to mind with what you just said because talk about an asset to tokenize that's already been tokenized. It's the US dollar. What if Trump and Bessant were to say to the whole world, look, uh, don't worry about what your government is telling you the rules are in your country. Don't worry about what your banking system says in your country. you can skirt the whole system and just buy US dollar stable coins on your cell phone regardless of of what your country's rules are and uh yeah, you're backed by the US government. That could potentially replace the petro dollar system with the stable coin system and shore up the US Treasury market. Do you think that's a realistic scenario? And would it play into what you just said about, you know, the market creating those tokenized assets without waiting for anybody? Oh, I think that in that case that is a realistic scenario and in fact you could argue that that has already started to happen. If you look at countries like Venezuela, Afghanistan, even Iran and other hotspots around the world, I'll take Venezuela as my example. If you wanted to go and find out what is the black market rate for the Venezuelan Boulevard, their currency, the most credible source that I have found is Binance giving you a tether to Bolvar rate. In other words, a stable coin. A stable coin is really where they are where that they operate. And when you dig deeper into it, you'll find out that in countries like Afghanistan and Iran to some degree and Venezuela definitely, those are dollarized economies. They are now trading in commerce in dollars, but it's not stacks of $100 bills. It's on their electronic wallets. They're owning the dollar stable coin and they're trading it back and forth. So in the respect that the dollar is going to get a leg up on remaining to be the reserve currency and that it's going to have a digital version of it in the crypto universe and a stable coin. I think that's already happened. Now it's going to be a while before we see that come to say Europe or the United States because our financial system is more stable. We don't go to bed every night worrying that our banks are going to fail. And we don't go to bed every night worrying, I'm talking about Europe, the United States, Japan, that our currencies are going to get seriously devalued. At least we don't yet. Or maybe I should say we don't now. But so we don't really need it, but in a lot of places around the world, they do. So I agree that's coming and I agree that to some degree, it's already here. Now the second part of that is what Scott Bessant is trying to argue is this will be hugely beneficial for lowering interest rates in the US because as trillions of dollars of stable coins are created they're going to have to be backed by US treasuries and that's going to create a demand for them. The problem I have with that argument is where is that money coming from right now? that money that would go into a stable into a dollar-based stable coin was probably already in to some degree in the financial system to begin with and it was already backed by a dollar. So if the argument is we need to pass the Genius Act and once we get the Genius Act passed that Americans are going to start opening up electronic wallets and they're going to be buying hundreds of billions of dollars worth of stable coins. I understand that argument. I just don't know whether or not a stable coin will be more attractive than a current bank account is, at least not now. But even if that were to happen and they start buying hundreds of billions of dollars worth of stable coins, where's that hundreds of billions of dollars coming from? It's going to be coming out of the banking system that's already backed by a Treasury security and it's going to go into a new secure a new instrument, a stable coin that's backed by a Treasury security. So, it's purely a substitution effect is what you're going to get. You're not going to get any really big net buy. Now, you might get net buying out of places like Venezuela, Afghanistan, Iran, because they're they're not backed by dollars and they put their money into a stable coin, but they're not going to be enough to move the needle when you have a $40 trillion deficit. It's really going to be the developed world that's going to be able to move the needle. But I just don't see where you're going to get that net new money. But let's go back to the first part. the fact that everybody is now using stable coins and they're using them through electronic wallets and they're using them in order to, you know, affect trade, the dollar is maintaining its dominance as the reserve currency. It's just that if you're looking at the traditional numbers of currency and circulation and how much trade is going on, how much are being held by the banks and reserves, you're not going to see it. you're gonna start you're but you're seeing it at the margins where they need it the most in the countries that are most vulnerable and that's what people are doing is because remember that in even in the poorest countries in the world cell phone penetration smartphone penetration is still 80% even in you could pick the poorest countries in Africa 80% of the people have a cell phone and they could download an electronic wallet and they can hold a stable coin and that electronic wallet and they could transfer it to another phone and that's how commerce is being done and it's all backed by dollars. >> What do you think about the state craft argument of it where Bessant and Trump intentionally basically tell the rest of the world look the model that we used to have where you guys thought your central bank was in charge of things like managing your own currency? No, we're in charge now. We're going to just tell the entire world that the settlement currency for all international transactions is US dollar stable coins and we're going to bypass any monetary policy that other countries try to implement because we're calling the shots. Is that scenario something they would do intentionally? >> I think in fact that is the scenario that we're having. Now whether they're trying to intentionally do it, it's very possible. But the idea is they are giving you a frictionless version of the dollar that everybody can own and more importantly unlike the old system that you're that cannot be regulated by a different country. So if you're in Iran and they want to say that you can't use dollars because the government will punish you if you use dollars in the old system. Yes, it was hard to do, right? that you couldn't hold it in a a regulated bank account in that country. If you wanted to use dollars, you had to physically carry around money with you, a sack of $100 bills, and you were subject to crime, somebody trying to steal from you. But now, you just walk around with a with a phone like every other person, and they have no way to know whether or not you own that. So, they are providing a global standard to the rest of the world. And they're saying to other countries, if you run your financial system poorly or you try to devalue your currency a lot, we don't have to say a word. Your population is going to migrate to our currency, the dollar, through a stable coin, and the Federal Reserve will become the world central bank by default, whereas your central bank will then start to lose influence. So, I definitely think that that's effectively what's happening. I'll assume that that's kind of what they don't mind happening, but they haven't said it directly, but that's in reality what we're getting. >> There's another topic where it feels to me like the winds are changing, Jim, and that's artificial intelligence. I don't mean recent developments in AI, although there have certainly been some of those. What I'm talking about is the the public sentiment and reaction to it until very recently was, "Oh boy, this is just the coolest thing ever. It's gonna, you know, enable so many things. It's going to be great. I'm hearing a lot more of the fears of, you know, it's taking our jobs, it's putting us out of business, we're we're going to end up losing a lot of industries, losing tens of thousands of jobs, and it's going to make our electric bills triple because we're competing with AI data centers for electricity, and there's not enough electricity to go around. So, you've got the public sentiment seems to be changing and meanwhile, the military sentiment toward the AI developers. If you look at the pissing contest that Anthropic just had with or is still having with the US State Department, it seems like we're kind of getting to a showdown where the US government is saying, "No, look, we're going to tell you what to do. You don't get to decide what your technology gets used for or what you want to sell it for. You're going to sell it to us on our terms, whether you like it or not." It seems like things are heating up on on both fronts. Where do you see this going? >> Yeah, you're right. There was a recent poll done that was put out in the last week or so asking people their favorability, unfavorability of u of certain topics and AI scored near the bottom of the list. The very bottom of the list, by the way, was people's opinion about Iran. So, at least people like AI more than Iran. That's all they've got really going for them um at this point, but not much more. And of course, as you pointed out, the real reason that AI is looked down so much is we've been told by the media it's a threat. It's either a threat for our job or it's a threat for our electric bill that we, you know, that our um our local utility is going to be we're going to be competing with the data center in order to u pay for putting the lights on in our house um right now. And bear in mind that in some places, and I'll give you the state of Wisconsin for as a matter of fact, state of Wisconsin has a lot of data centers in it. Very popular place to put those. The electrical consumption of data centers in the state of Wisconsin is larger than the 6 million people residents of Wisconsin. Now to keep this number in perspective about 60 or 70% of all electrical usage in the United States is commercial and industrial and data centers are part of commercial and industrial but they're larger than residential usage right now. So that's part of the thing that gives people a lot of pause about AI. Now I have a little bit different view on it and you know just by background you know I've said this before I subscribe to the pro version of every data of every AI right now. I kind of use all of them and I'm learning that they're not all the same. It's not like switching from Coke to Pepsi if you go from um you know Open AI to Claude with this entropic. They all have their strengths and they all have their weaknesses depending on which one you want to use. But what has changed in the last 90 days that has really brought this on forward is what's called Agentic AI. In other words, we're all familiar with when Chat GPT went to its free service in late 2022. It's called generative AI. That's prompt and response. Ask it a question, get it an answer. It's Google search on steroids. But what angentic AI or AI agents is give the AI control of your computer. Tell it it has the ability to read your files, change your files, execute commands without you doing it. So don't tell me how to do it, just go do it. And that has been the thing that has really opened up people's eyes why the software stocks have been tr struggling because the most obvious application is is in coding and in development right now that people have been using AI to basically as an assistant as opposed to just something you ask questions for. And I do think that is going to be transformational. Now, as far as jobs go, I have a different view on it. Not necessarily a unique view. Uh, but what is a job? A job is a series of tasks. You do a number of things and put them all together and that's your job. Now, some of those tasks tend to be kind of boring and tend to be repetitive and you don't want to do them. They're usually around compliance, accounting, answering emails, putting together slide decks, updating Excel spreadsheets. I'm kind of speaking from a financial point of view, you know, filling out expense reports and all that. AI can be very helpful in all of that stuff in streamlining or automating a lot of those processes in order so you don't have to do them. Now, that's going to free me up or anybody else up that uses AI to do more of the higherend stuff. Collaboration, creativity, communication. These are things that humans are clearly better at than AI. If your argument is, oh well, if AI is going to do all this other stuff, like answer some of my emails, help me take the one-hour process of putting together my slide deck and make it five minutes, filling out my expense reports automatically, I can go home every day at 1:00 because I don't have to spend the other three hours at work doing that other stuff, then your job's in trouble. But if you say, "No, I have three more hours to do more higherend stuff at my job," then your job necessarily won't be as much in trouble. But so I'm not of the opinion that it's necessarily something we should be afraid of, but I understand why everybody is because they're only told you're going to lose your job and you're going to pay more in your electric bill. And most people haven't yet fully recognized that this angentic AI is here. And they're saying for what? For a Google search? Why am I going to lose my job over a Google search? Why am I going to have to pay more in electrical bills over a Google search? And so I do think that this industry is moving so fast. I'll give you one fun anecdote and somebody told me to do this uh with Claude on uh on Claude. If you asked AI right now, how do I use you? How do I use AI? It will give you instructions on how to use it, which are three months old, which is not even the latest version. So it's so moving so fast it can't keep up with itself right now. >> I couldn't agree more with that. I use Claude and uh ChachiPT both extensively. I agree with you that they're completely different in their I hate to say the word personality, but I don't know how else to describe it. They're completely different tools with different characteristics. There's something that nobody's talking about though, which I think they should be, which is we've heard one side of this argument, which you just articulated perfectly, and that is the argument in favor of AI is that it enables humans to do much more than they ever could have done before. It means our economy could be much more productive because you can literally write and publish a book in a week or two using Claude. That just wasn't possible previously. you can do a lot of things. The thing is the energy consumption side of it. And it seems to me that the solution to this is if you change the rules and you told the tech companies, look, you guys are really good at innovating and doing things more quickly than a lot of other industries are. The new rules are we're going to open a whole bunch of doors for you. We're going to take a lot of barriers out of your way so you can have the growth and everything you want. But it's a two for one. Not only do you have to build your own energy to support your data center, but you have to build double the amount of energy that your data center needs and sell it [clears throat] back to the grid. So that in the course of getting your AI running and doing everything you're doing, you're supplying more energy to the rest of society, not consuming net energy that we can't afford to spare. if we unregulated a bunch of things so that Google was allowed to build power plants all over the countryside and could do things like work with, you know, acquiring an advanced nuclear company, investing, we just talked to Alo last week about mass- prodduced entire nuclear power plants. If the hyperscalers could buy into something like that and start building nuclear faster than electric utilities can do it because frankly the the tech companies are pretty good at innovating technology and deploying it quickly. I think you could see the AI industry supplying net energy to the rest of the world. The problem is, you know, there's protections in place that only utilities are allowed to build power plants and so forth. I think we should rearchitect this and open the door for high-tech to build more than enough energy to than it consumes. What do you think of that idea? >> I think not only do I agree with it, I think that most of high-tech is on board with that idea full scale that they would be more than happy to >> Well, they're trying to do it, but the the rules don't really allow it, >> right? And the biggest problem with the rules is is that you now run into the environmental lobby. and the environmental lobby is full scale against a lot of these rules because one of the things as you mentioned they're saying yes I'm ready to do that yes we actually will build uh energy sources to not only power our data centers but overpower our data centers so we can sell back to the grid and they'll go you one step further energy sources that we have don't produce any pollution you go well okay what is that energy source it's small nuclear reactors and that's when the you know the environmental groups then throw up the wall and go, "Hold on a minute. Hold on a minute. We're not building more nuclear reactors." And they're like, "Oh, yes, that is the answer. These small nuclear reactors, you know, they're the size of like a two-car garage, and they will produce tremendous amounts of energy, and they exist. Their safety record is very good. They'll try and demagogue them by that, this is the environmental groups, and saying that they're dangerous and that we shouldn't be using them, but they but there's no reason to think that they are dangerous right now. um it would just be demagoguery that we would say it. But so that's really where the where the blockage is. Now maybe there is a sign that this is coming because in the last week the Trump administration has given at least Department of Energy approval if I've got it right for a new nuclear power plant to be built in the United States. The first one in 50 years that's gotten approval. Doesn't mean it's going to it's not done with all the approvals but we are moving in that direction. So I do think you're right. If you allow the tech companies to build your power, build your data center, bring your all, and then construct the power to build it, they're all for it. But you've got to let them do it. And you can't say we're going to do it, but then we're going to go through the same rigomearroll that we have right now. You want to build some power plant to to palm fund it. First, we have to have 10 years worth of studies done. Then we have to have five years worth of public hearings. And then maybe we could build it if you're still interested in doing it at that point. cannot have that game being played anymore with this. So that's really where the where the fight is going to be is really with whether or not the environmental lobby will allow this to happen. >> Yeah, that announcement that you're talking about was Terrap Power and their sodium cooled nuclear reactor. It's the first time in the 52-year history of the Nuclear Regulatory Commission that they have ever approved a civilian power reactor that was cooled by something other than water. They're finally moving off of 1952 technology to something more modern and the NRC is not in the way as they've been in the past. So, I think that's a breakthrough and I hope that we see more of it. I agree and I really do hope so too because we need it for a lot of other reasons too because as AI comes not only there's a thing called Jevans paradox that when the cost of something goes down you get a lot more of it. So if the cost of creating software and the cost of using a computer becomes easier and I'm talking about my personal cost, your personal cost that we're just at the point where you just talk to your computer and it does things for you or you know it runs things for you automatically. You're going to have more of these and you're going to demand more of it and we're going to have more power demands for us not just for data centers but even for our personal use too. So as you make the cost of things go down, you get more of it. We're going to need more power in order to meet those demands. >> Jim, it seems like you and I agree on a lot of the Jevans paradox example as well as just the big picture of AI is a good thing, not a bad thing. But I think there is an angle we haven't acknowledged yet. And that is we already see a lot of divisiveness in the US and in the western world in general. Uh let's talk about what AI really does. It enables smart people to be a hell of a lot more productive, but it also does, I think, legitimately eliminate a lot of jobs for dumb people. You know, the the office worker that had to do the grunt work because the smart executive, you know, needs that assistance. Yeah, smart executive can pretty much be self-sufficient with AI and doesn't need the grunt workers anymore. Does this create a a further worsening of the K-shaped economy where the people who are well educated, intelligent enough to know how to leverage AI and use it to their benefit start to really do well, but you know, the guy who's not smart enough to figure out what it is is really in trouble. Oh, yeah. I mean, you know, you can even think about I read this a couple years ago and I'll assume it's still true that the IRS puts out these lists of whenever you fill out your tax returns, they ask you what your occupation is and you you write it down. And they did a study of that and the biggest occupation listed in the United States has the word driver in it. Taxi driver, truck driver, forklift driver, bus driver, fill in whatever, but the word driver like some millions and millions of jobs. Well, autonomous driving is coming and AI is going to power that. AI is going to power 50% of all of um minimum wage jobs have the word cashier in them. That's going to be done by AI as well. So, you're going to see a lot of these lower-end jobs that can be automated away. Now, the funny thing about AI is, you know, on the more science fiction side, you could argue that AI can help scientists cure cancer, but if you asked AI to power a robot to fold laundry, it's still struggling to to do that part of it as well. So, there's going to be other roles that are going to be that it can't really do right now. But the concern that I have with it is, and we saw this during the industrial revolution, that as we first get this new technology, the industrial revolution, AI, it automated away a lot of jobs. 200 years ago, it was, you know, farming jobs and the like. And all you saw was job loss first and then the job creation came second. Because keep in mind what we're talking about if you automate I'll use my example of driver. If you automate driver and all and the world is reduced to 50 million or 75 million autonomous taxis that run 24/7 365 and autonomous delivery trucks. the price of transportation is going to plummet and it's going to cost you practically nothing to ship either yourself to the airport or a product somewhere else. That is going to make business models that are not economic now and we don't even think about them because they aren't will be economic in the future. If you want a a near-term example of that, the Apple Eyes Store opened up business models such as Uber, Airbnb to be able to compete with taxi drivers and hotels because they had this new technology that you could now put an app out and people could use the app to book um book somebody's room in their house or book a private car to take you from A to B. And so it created a lot more jobs. So I do think that what technology has always done and I do believe is a net creator of jobs. So ultimately, yes, we might lose that driver job. We might lose that cashier job, but we're going to create whole new industries and we're going to need those people in other industries. The concern is the jobs get lost first, the new jobs get created later. And in that gap, people get angry. All they wind up seeing is job loss. All they wind up seeing is what they perceive as it making things worse. And in the 18th century when we had the industrial revolution, we got a push back. The push back was Frederick Engles and Karl Marx writing the communist manifesto and pushing back against the capitalist system. We might get a push back against this. Now, it won't be communism. that was a push back to a different era, but it'll be some kind of collective socialistic type of argument to put up a barrier from putting this together. So, I hope that the AI industry and I hope that the AI proponents understand that if all we're going to do is say, great, we can automate this and fire all these people and everything is better, it won't be better in the long run. It might be better for the very short term, but if we're going to create new opportunities at the same time, you lose your job here, but there's going to be this new industry here begging for people to help doing whole new things that we haven't figured out yet because of that new technology. I think that transition will be much softer, but that is a real risk right now. Well, Jim, I can't thank you enough for a terrific interview as always. Before I let you go, uh, tell our listeners who are not familiar with what you do at Bianca Research a little bit more about what you're up to. You got Wisdom Tree now following your work with an ETF that basically follows a fixed income index that you created. Tell us more about that, how people can invest in it as well as your Twitter handle and all that stuff to follow your work. >> We we put out Bianco Research which is an institutional research product at biancorresearch.com. If you're interested, you can sign up for a free trial there. Otherwise, I'm very active on social media under my business name Bianco Research on Twitter X, on YouTube, on LinkedIn and also we started a couple of years ago an in fixed income total return index which has its own website Bianco Advisors. It's a managed index to try and beat the benchmarks in the bond market. And u we have an ETF with our partners is Wisdom Tree as you mentioned. WTBN, Wisdom Tree, Bianco Nancy is its ticker symbol that tracks our index as well too. So you can find out more about it by looking up more about WTBN or looking at biancadvisors.com. >> Patrick Szna and I will be back as macrovoices continues right here at macrovoices.com. Now back to your hosts, Eric Townsend [music] and Patrick Szna. Eric, it was great to have Jim Biano back on the show. Now, Dr. Anas Alhaji is next on deck with a special second feature interview on the developing Iran conflict and what it means for oil markets. But first, you had a couple of announcements to follow up on from last week's show. What's on your mind? First, a few of you complained that last week's show failed to make clear how to invest in Alo Atomics, which is still a private company. As you already know, private companies like Alo can't market their private equity offerings to retail investors. So, unfortunately, if you're a US citizen, you need to be an accredited investor to invest in private placements, meaning that you have to have at least a million-doll net worth. You can find the exact requirements on Wikipedia under accredited investor. For our accredited and institutional audience, there is a safe offering right now that will be priced coincident with their upcoming series C share offering. The safe is capped to price at a lower pre- money than the expected series C valuation, but they're still shopping that series C term sheet and don't yet have a final pre- money valuation for the series C. If you are accredited and want to get in on the safe, you better move fast because it's a limited offering and they don't have much capacity left. The series C offering is also restricted to accredited and institutional investors and is expected to close by September after the company expects to have its first nuclear reactor up and running. The other thing I promised last week was that I'd lean on Patrick off the air to respond to the many inquiries that we've had about getting a webinar going for hedging tail risks in these troubled times. Patrick has agreed to that and we'll get to that announcement soon enough. But first, let's bring on Dr. Anis Alhaji for our second feature interview this week. And believe me folks, you don't want to miss this one. Dr. Anis is coming right up. Joining me now is Energy Outlook Advisors founder Dr. Anis Alhaji. Annis, great to get you back on in these troubled times. Let's start from the beginning. Some listeners who might not be completely on top of the latest news might be thinking, boy, you know, Dr. Ronis came on Macrovoices a few months ago and said the Iran military doesn't really have the military power to close the straight of Hormuz. From what we've heard in the news, it sounds like somebody did close the Straight of Hormuz. The thing is, it wasn't really Iran's military. Who was it? What happened? Well, uh, thank you, Eric, for having me again on your on your show. Um, a couple of things here. The first one is I still stand by by what I said earlier. Iran cannot close the Hermos rate. It is not in the interest of Iran to close the Hermistra. And even if they are able and they are willing, they will hurt their friends and they will not hurt their enemies. Israel does not import anything from that region and US dependence on the region is very small. So they hurt their own people and they hurt uh their friends. So what happened? Iran did not close the herrate. The herma street was closed because of an insurance fiasco and I would like to explain this to the audience in a layman term so they can understand what happened. The EU has certain regulations to avoid the bankruptcies of the insurance companies. Uh of course as you know sometimes bankruptcies happen because of lack of cash not because they don't have the wealth or they don't have the money. Just the lack of cash can cause bankruptcy. In Europe, they call they call it solvency. So to avoid solvency, they required the insurance companies to increase the amount of cash at hand as the risk increases. So the risk basically went up and they need to have more cash. Here is the problem. The insurance the cancellation of the policies did not happen because of any attacks in Hermraitrate or Gulf of Oman or the Gulf at all. The cancellation happened when a US submarine launched a torpedo which is the first since World War II. launched a torpedo on a uh Iranian navy boat that was participating in a drills with other countries in near near uh Sri Lanka and they killed about 130 people on that boat. Um so what happened is the attack happened in Sri Lanka. So for those who can imagine the map from an insurance point of view view and from a risk point of view now they have to cover the whole area from Basra in southern Iraq all the way to India and to Sri Lanka which has thousands of ships and boats and everything else and therefore the risk went up so much that it's beyond the ability of those companies to cover and hold cash. So they have an option and that's part of the rules of the EU. They have an option and that option is they can cancel within certain number of days and the lowest number is seven and they decided to go for the lowest number which is seven. Now all of those are British companies as you know the UK is not a member of the EU but the UK was a member of the EU when this was this law was adopted. after the UK left, they kept those laws on the books. So basically that was the case where shipping companies they don't have insurance and if there is no insurance they cannot leave and then some some insurance companies come back with a major increase in value because they have this war premium which is sometimes 50% to 75% of the value of the ship and there it's not worth it. this is extremely expensive. So all the ships got stuck and that was really the main reason why regardless of the rhetoric of the Iranians, the Iranians been saying this for 45 years. And here I would like to clarify another point. Uh we heard a lot about many attacks on ships and tankers in the region. Until last Saturday, there was not a single attack in the Gulf of in the in the street of Hormuz. Not a single one. Yet the media basically for a week been telling us about attacks in the in the Hormos tree. The media was telling us that. And this is really a serious issue because there were supposedly attacks very far away from the hero, but the media kept linking it. The second point is the first two ships that been attacked, they were two small boats. They carry Iranian oil. So does it make sense that Iranians will be attacking their own boats. So the first two attacks they were Iranian or or they were boats that carried Iranian oil, but they were small boats. For the others, the way the attacks are reported that anything that the captain report basically is considered an attack. So if a captain report that oh I heard a bang that is reported as an attack regardless the ship is not hurt at all. It's not hit but he heard the bang. Uh so what happened is because Iran was attacking the Gulf countries and they were uh intercepting all those missiles and the drones, they were falling on the heads of everyone. They were falling on houses, on buildings, on parks, on cars, on buses and on ships. And that was reported as an attack. So the reporting basically was uh is not accurate because they kept telling us Iranians attacked Iranians attacked. So the the whole fiasco that we have is an insurance fiasco. The final point on this is this. We know that when Trump, President Trump does not like something, he is outspoken and he is outspoken. If he to presidents, kings, uh, senators, congressmen, we know he is after them. He goes public and badmouth everything and yell and all kind of things. He for his adult life, I'm talking about like since he was 24 until now, he in every single interview, in every single writing, in every single book he wrote, he was always against high oil prices. This is the first time ever that he does not care much about high oil prices. The first time ever. And there is a big question mark here. Why? Even when he was asked by the journalist he said well just wait prices will go down later this is not Trump the one we know the other issue is so what I'm saying here is he despite the fact this fiasco was caused by the insurance companies he never mentioned anything about the insurance companies he never pressured them even to do something he never said anything few days later he came back he said oh we are going to ensure the um the ships and we are going to escort them through the Hermos trade and this is not going to happen. This is not happen. In fact, escorting them is kind of a big question mark because he went public saying that we destroyed all the Iranian navy. So if if the whole Iranian navy is destroyed, why do you need to escort ships? So there is a big question mark there. But the idea that he never said anything about the European insurance companies, there is a big question mark here. Uh why? Because there are many solutions to this, they are very easy. All he got to do is ask the EU and we know that they are scared of him and we know they yielded to him to remove that condition the cash condition or reduce it or suspend it for 30 days uh or something or reduce the risk area say oh it's only the hero trade from Oman to the middle of the Gulf and that's it they don't have to cover it all the way to Sri Lanka and that could solve the problem but he never said anything so it is the insurance companies and is still the insurance companies until now. >> So, the upshot is the operators of these tankers do want to transit the straight. The there's no reason that they couldn't get through. It's not like it's impossible to navigate those waters. They're not allowed to because they don't have insurance and they can't get insurance. And you and several other experts have gone on record saying, "Look, this is a serious problem for the world. It has to be resolved quickly or else we could literally get to $250 oil prices that could the global economy. Now, there's a little bit more to this story that doesn't add up to my mind, which is it's been reported number one, President Trump says Iran's navy has been destroyed, sunk, it's over, it's done. Number two, Iran's navy is actively setting mines in the Straight of Hormuz. They're mining the straight right now. Number three, Trump says they're going to be in big trouble if they do that. Wait a minute. If they don't have any ships cuz they already got sunk, how are they mining the straight of Hormuz? Something doesn't add up here. What's really going on on us? >> May I respond to that? The mining one? >> Yes, please. >> Okay. Because there is an issue that no one is talking about and it is a very serious issue. Probably it's it's it's like the nuclear bomb in this war. If they are putting if they are really putting mines in the waters in the Gulf and the worst thing or the last thing that Iranians want is to blow up a VLCC with 2 million barrels in it and the oil basically will land near their shores. Just in the Gulf alone they have more than 65 desalination plant water desalination plants. These communities depend heavily on water from desalination plants. They are going to die from thirst. Are the Iranians stupid enough to do that? But this is not only the the case. Uh we know that they they believe they are Shia Islam. Basically this is one of the sex in in Islam. They are Shia and they support they support the Shia in other countries whether in Saudi Arabia, Kuwait, Bahrain or or Iraq and most of the Shia populations in the region are along the Gulf and there are hundreds of diesel plants on the other side. So are they going to literally let their brothers on the other side die from thirst because they want to bomb those oil tankers? Just the story does not add up even from this side. So they want to transit this trait. They cannot transit this trait because of insurance. That's a an EU requirement that could be changed by the EU, but for some reason hasn't been. One way or another, you and others are on record saying this situation has to get sorted out and sorted out soon because if it doesn't, we could be looking at $250 oil prices which could the global economy and set us into a 2008 sized global financial crisis. So we need to do something. How is this going to get resolved? Do you think it's about to be resolved? And you know, what will it take? How do you see this playing out? >> Well, it is it is very clear that whatever the media been kind of feeding us uh was mostly propaganda. Uh the case on the ground is completely different from what the media is telling us. And this war must end as soon as possible for various reasons because the Gulf countries are being choked. And as you know those countries depend heavily on oil. When they try to diversify their economies basically they created industries. Now those industries are shut down because they cannot export or import and they try to diversify by focusing on tourism and that industry got killed. So we are literally killing our allies who promise to pay us two trillion or to invest in the United States $2 trillion from where they are going to get the two trillions if they have no money. So it is a crisis and not only that if you look at what's happening right now worldwide we are already to hearing about food shortages and in fact if you look at uh methanol and the use of methanol in bofuel and other things that are in food products and everything else uh you can play uh the go through the chain and you can see the impact on we might end up with food crisis before even energy crisis. And the issue here is there are tremendous benefits to the United States from closing the horostrade and these benefits are long-term and they are huge. You cannot even give put a price on that. But there is a lot of short-term uh pain that comes with it. So we have different time frames for the advantages and the pain and we don't know whether this is a deep state that does not really care about who is in the white house and they want to implement certain things. The reason why I'm saying this because uh the issue is not only about oil and gas and LNG. Uh if you look at helium for example, 35% of traded helium comes out of the hormone rate. You cannot make computer chips and semiconductors without helium and all of that goes to Asia. So if the objective is to bring this industry to the United States, well this is the great opportunity right now and that really good opportunity. Yes. because the US is the largest producer of helium in the world. You want to talk about um agricultural products and agricultural exports which Trump was promoting um 33% of the world traded or the seaborn traded um fertilizers go through the hero trait. If those Asian countries do not have enough fertilizers, then they have to buy from the United States agricultural products. And we talk about fertilizers. By the way, the 33% is misleading because that's what they import in term of final product. But they do have their own industries that manufacture fertilizers. But those fertilizers need the gas that come from Qatar or the NGL's that come from Saudi Arabia. So the impact is more than 33%. And we know that Trump basically was the uh uh marketer and chief of the US LNG industry and he wanted the agent companies to sign long-term contracts with US LNG industry. This is a great opportunity because the reputation of Qatar and the UAE got tarnished right now as a secure supplier while the United States has no problem. So the LG industry benefited if you look at the stocks just the US LNG stocks they they doubled in some cases just since the start of the war until today. So there are tremendous benefits to the US and these benefits have already been achieved. So if the purpose the are these benefits, the benefits are achieved. But if if these benefits that I'm talking about are not the purpose at all and they are just a byproduct of the attack on Iran, well let it be. But they are achieved. >> Okay, let's talk about the price signal, which frankly doesn't jive with the things that you're saying about what's really going on. Because what we saw is on Sunday's futures open, there was a massive shooting star candle printed. We went all the way up to what was it $119 on US West Texas Intermediate crude oil around 10:30 at night or so. It peaked. You and I were actually on a Twitter spaces together as that was happening. Well, hang on. There's been a massive sigh of relief since then from $119. We're down to $88 as we're speaking on Wednesday afternoon. It seems like President Trump said, "Okay, this Iran war is uh is winding down now." He made that statement. The market breathed a huge sigh of relief. As of our recording time Wednesday afternoon, the EU has not announced that the uh insurance rules don't apply anymore. The traffic is not really resumed, at least as as I understand it, through the straight, but the market is breathing a sigh of relief. Is the market wrong? What's going on here? >> No. So basically the market is being manipulated by the Trump administration in various ways. Some of them we know about and some of them probably we don't know about or we will know about later on by the end of the month. So we have President Trump basically making statements about the end of the war. That led prices to decline by about $20 and then by the second day we realized this is not the case. So prices went up again. Then the uh energy secretary came in, said something, put a tweet that was wrong tweet talking about the US Navy started escorting oil tankers out of out the out of the Hermos trade and prices plummeted by kind of like 17 $18. 5 minutes later he deleted the tweet and then the White House denied it. So this is pure manipulation and we don't know within those few minutes uh between the time uh he posted the tweet and deleted it who jumped on the wagon and bought etc. There is a lot of chatter about the US Treasury basically being heavily involved in the futures. Again, this is a rumor, but the fact that President Trump said something that was not correct and the secretary of energy said something that was not correct, that led prices to decline significantly. Uh this is pure manipulation of the market and that's why people are getting scared both sides scared from prices going up and scared from those manipulations basically ruining their savings and and uh ruining their lives if if if they lose a lot of money. Let's talk about the impacts of whatever is going on this uh manipulation game if that's what you think it is. Uh let's suppose that we go for another couple of weeks of not moving traffic in any meaningful size through the straight and that results in a lot of logistic dislocations where oil that was expected to arrive doesn't arrive and uh you get situations where the producers are backing up. In some cases, they may be forced to to shut in producing wells because there's no place to put the oil if the ships aren't allowed to leave. Uh what is this something where we've only got a few days before we hit a real crisis? Or could we tolerate a month or two of this kind of disruption? What are the consequences of waiting? And then once it does get resolved, how long does it take to work out the backlog and get everything back to normal? This is a historic event by every sense because it covers so many things and so many products and affects the people around the world. Uh and for the poorer countries basically they are going to be impacted the most. But the issue uh here that um we already seen the Gulf countries cutting production. We already have production cut about 7 to 8 million barrels a day. If this is going to last another week, probably it will go up to 10 or 11 million barrels a day. As you know, uh if we uh it will take about couple of weeks basically to get to to move all those ships out if everything ends. If the war ends and everything is fine, it will take about couple of weeks. But to bring all that production back to previous levels will take couple of months. And for LNG, it might take more than that. And the longer we stay and the higher the amount uh being cut, the longer is is going to be to bring it back uh online. And uh so we have a serious problem. Prices are not reflecting the actual risk. From my point of view, it seems that probably Trump knows that. Uh but that's why he's being calm. Otherwise, he would panic. And uh today the IEA announced they are going to release 400 million barrels from the strategic petroleum reserves of the 32 members but that is voluntary. Basically countries are free to do that and prices went up. Prices went up by more than 5%. At the same time, US oil inventories basically the numbers were released by the EIA and we have an increase in inventories higher than expected yet prices went up. Probably they would have gone higher without all this news. But the issue with the IIA and I would like to explain it here to the audience. It seems this is another manipulation because they chose a very high number uh kind of for impact. Uh and but the actual release is very small and the reason why unless we see the Trump administration basically retracting its statements and start releasing oil from the United States, this is only for few countries that do not want to pay the high prices for oil. They have oil that stored when oil prices were very low and they don't if they think this is going to last for two, three, four weeks a month, they can use their own inventories instead of paying the high price for it. So the the requirement by the IEA is that they have to keep uh 90 days worth of supplies in strategic storage. So to to avoid being in violation, they being given this way out today. the legal out today, go ahead and use it. But and and that's some that's why some countries basically will resort to their uh strategic petroleum reserves and do it. But the question here is this really let's go with the headline first. Let's say it's 400 million and everyone is going to release even the United States. This is of course the highest on record. This is the withdrawal from the United States would be higher than the one released by Biden and this is going to be very big. Of course, the United States has not announced anything yet. But let's assume that the it is 400 million. We have many problems with that. And the first problem is most of the release is going to be in the west while the shortages are in the east. So that's one problem. The other problem is so of course if you want to solve if you want to move the SPR from United States to to the east that takes about four four to five weeks to get it there. Probably the war will end by that time anyway. The other issue is one of the main problems we have in recent days that heavy crude price is is higher than the light crude price because that's where the shortage is and prices went up substantially. So we lost the Iraqi oil which is heavy crude but what we have in storage is either products we are talking about gasoline diesel what jet fuel etc or most of it basically is crude and it's medium sour or light so that does not solve the heavy crude problem and we don't have any additional oil coming out of Venezuela by the way whatever they produce and export that's it they cannot do more so from where that heavy crude is going to come Canada is maxed out at this stage. So there are some issues with that release even if the headline number is the correct number. >> Okay. So as I'm understanding what's really happened here, the world is perceiving the IEA has announced the release of 400 million barrels of oil from strategic reserve. Boy, that sounds like a really really big relief that's going to make a big difference. What's really going on, if I'm understanding you correctly, is the IEA has in its possession exactly zero barrels in strategic reserve that it controls directly. All it's really saying is if anybody else should choose of their own valition to want to release some of their reserves which we the IEA don't have any authority to tell them to release but if they decide to do it on their own we're not going to find them for it for breaking a rule that we used to have. Is that really the substance of this announcement? >> Yes. Yes. The SPR the amount in the SPR right now I just checked it. I think the uh in the press release they said it's 1.2 2 billion. I check the actual numbers. There is some exaggeration in this. It's closer to 1 billion than than 1.2 billion. So about 700 uh in crude and about 300 in products. Uh so the headline number basically is little bit exaggerated but still I mean the number is still huge anyway if they want to deliver on that. uh but the actual numbers again this is more it's not about a shortage mostly it is about some countries do not want to pay the high price and others probably if you look at South Korea in particular probably they need that oil because of they I mean within like couple of weeks probably they they really need that oil >> so what can happen here in order to get this insurance problem that it seems like is being under reportported actually solved so that everybody who's got a tanker that wants to transit the straight of Hormuz can do so. What do you think happens next here? >> I have a theory here. I know I don't want to take much of your time here, but I have a theory. Uh sanctions historically never worked. Even in term of inflicting pain, the pain was very minimal until globalization came in in the '90s. And with the globalization, what was globalized was two things. the fin the the American financial system and copyrights that was really what was globalized and once the the the American financial system was globalized it became sanctions became very painful. They are not effective in achieving their goals but they became very painful by adopting the US financial system. And now I am looking at it from that perspective and I look at it as a a financial experiment through insurance because if this is effective then we we have a new tool new foreign policy tool. And that's why we've seen some countries basically having their own insurance. And oh, by the way, I just remembered here is here is one for you to tell you that this is really not kind of a clear-cut game. A flight with 400 people can leave DHA without any problems, without the increase in insurance or anything else. But a boat leaving DHA is subject to that insurance, the heavy insurance. We know the fight is in the air. All those missiles, all those planes, all those attacks are in the air. So how come planes can fly but boats cannot go through? Well, honest, I suppose the difference is that the airplanes only carry enough petroleum to get them to their destination and they're not delivering oil to the other end. Um I I guess that begs the question, what are the implications of that? What meaning do you read into that? And then let's come back to my earlier question which is this has got to get resolved someday. When it does get resolved, how long does it take to clear the whole system out, make up the backlogs and get everything back to a smooth, properly operating global energy delivery logistics system. Regarding the first question, the answer is very simple. We should not discount the idea that this war may not be about Iran and it's a nuclear program. It could be more than that and Iran could be just one piece of the puzzle if you put it within the uh trade wars and sanctions, tariffs, Venezuela, Panama Canal, Red Sea, uh Greenland, you put it within this concept, you end up with uh Iran only part of that puzzle. All I am saying here is we should not discount this idea. Uh regarding the second question, if the war ends tomorrow, the crisis does not end tomorrow because it takes time probably couple of weeks to clear all the ships out of the Gulf on one side and for production to come back online probably we need about couple of months. But the damage to the Gulf nations have already been done. The reputational damage has already been done. That's it. and the reputational damage for Qatar LNG and UA LNG has been done. So anyone now who wants to sign long-term contracts, they have an increase in risk in those contracts and therefore they need to look for alternatives to minimize the risk in their import portfolios. Honest, before we close, I want to ask you about something you mentioned earlier, which is desalination plants and how they could geostrategically play into this whole equation. I don't I haven't heard anybody else besides you talking about this. How significant could that be? >> This is the nuclear war. This is the World War II. This is something above everything else we can imagine. Why? Because everyone in the region basically has dalination plans, including Israel. So if they start hitting the diesel plants of each other, people will die from thirst. So this is really the the nuclear option if you want to call it. >> You're saying rather than a nuclear strike, which is what comes to everybody's mind as the way to achieve that outcome, the way it would happen is actually by intentionally targeting desalination plants so that there's no water supply for entire countries. So what I'm saying is if Israel for example hit diesel plant somewhere in Iran and Iran retaliated and then somehow they hit another diesel plant in the Gulf and countries retaliated. So that's really where the problems are if they start hitting the diesel plants of each other. >> Well Annas, I can't thank you enough for a terrific update. listeners, so you know what to expect as this crisis uh hopefully resolves. But if not, if it continues to develop for as long as it does, we'll invite Dr. Anis andor potentially other energy and geopolitical experts back on the program in addition to our normally scheduled feature interview schedule. Uh we'll be getting Dr. Annis and others back in order to comment on this until the situation is ultimately resolved. Annis before I let you go what they can find at energyoutlookadvisors.com. >> So we do uh publish a newsletter uh mostly directed and at uh institutions uh and financial institutions etc. We do publish the daily energy report. This is for everyone and it's fairly cheap $420 per year. Uh but the materials that is covered in this basically just unmatched anywhere else. And uh of course we have uh Twitter and Twitter subscription too. Uh most of the stuff I put there basically is on Twitter. It is uh NS Alhaji A N A S A L H A G J G I. And folks, be sure to stay tuned for our postgame segment when Patrick Szna's trade of the week is going to focus on hedging and protecting portfolios in these troubled times. Then we'll get into an analysis of all the markets and what's going on. That's coming up as Patrick Serzna joins me as Macrovoices continues right here at macrovoices.com. >> Now back to your hosts, Eric Townsend and Patrick [music] Serzna. Listeners, we'll keep bringing you a second guest as conditions warrant it until the Iran situation eventually settles down. Meanwhile, thanks for your understanding that we didn't think of this last week. You'll find a download link for this week's trade of the week in your research roundup email. If you don't have a research roundup email yet, it means that you have not yet registered at macrovoices.com. Just go to our homepage and look for the red button over Jim Biano's picture saying looking for the downloads. Patrick, thank you for agreeing to offer our listeners a free tail risk hedging webinar. We'll come back to that soon enough, but first let's start with this week's trade of the week. I know you wanted to walk through one of the types of portfolio hedges that you plan to go deeper on in that webinar. So, how are you thinking about protecting downside risk in the current market environment? Eric, while the market is beginning to show some signs of classic short-term capitulation signals, the underlying conditions in the market remain fragile. Beneath the surface, there's still structural stresses building, particularly in private credit where redemption pressures continue to surface and in the systematic space where several flow triggers are now being hit, potentially shifting positioning in a way that can amplify volatility. At the same time, leadership in the largest mega cap stocks remain structurally weak, removing an important pillar of support for the broader index. So even if the market manages a near-term bounce, the environment still carries enough uncertainty that maintaining left tail protection remains prudent. Interestingly, a similar idea was highlighted earlier this week by Goldman Sachs derivatives trader Brian Garrett, who suggested that investors used the recent bounce to reset downside hedges on the S&P 500. his desk specifically pointed to a 9585 downside put spread as an efficient way to express that view. So if we take that framework and apply it to today's markets, let's walk through exactly what the hedge would look like in practice. With the S&P 500 trading around 6760, the 9585 structure translates into buying the April 17th 6425 put and selling the April 17th 5750 put, which costs a net of 56 points. Put differently, that's roughly 80 basis points of the index value to own this protection structure. And with roughly 5 weeks or about 38 days until expiration, that cost buys you a 675 point wide downside payoff window. If the market were to experience a meaningful draw down during that window, the spread can be worth as much as 619 points, which creates roughly 11:1 payoff profile relative to the premium paid. So the idea here is straightforward. In a market where hedges were recently unwound and volatility could easily reexpand, paying a small percentage of portfolio value for a defined period of downside convexity is a reasonable way to reset protection and manage left tail risk. Well, Patrick, I think this is really topical considering Anis's view that the market may be breathing a sigh of relief prematurely. So, what's the plan for the free webinar that you agreed to offer our Macrovoices listeners? In the webinar, I'm going to go much deeper into exactly these kinds of portfolio protection strategies. We'll walk through the key risks I think could drive a deeper pullback from here, why simply moving to cash isn't always the best solution, and how option hedges can help protect a portfolio while staying invested. I'll also break down a real hedge structure I'm watching right now, including the strikes and expiration and show you how it fits into a broader portfolio protection framework for uncertain markets. The reason we're doing this as a live webinar is that I can actually build these trades visually in the options chain in real time which makes them much easier to understand than trying to explain these structures in this audio only format. So for those that want to attend, we'll be hosting it on March 16th at 400 p.m. Eastern and macrovoice listeners can register for free at bigpicturetrading.com. Patrick, every Monday at Bigpicture Trading, your webinar explains how retail investors can put on our most recent trade of the week. For those listeners that want to explore how to put on these trades in greater detail, don't miss out on a 14-day free trial at bigpicturetrading.com. Now, let's dive into the postgame chart deck. >> All right, Eric, let's dive into these equity markets. What are you thinking here, >> Patrick? Let's revisit the wartime playbook that I described last week. First comes the panic. Oh my gosh, there's a war on. Check. We traded below the 200 day moving average during the Sunday night market panic right after the futures open. Next came the sigh of relief. President Trump says the war is ending. Back up almost 250 S&P points on cheers that the war is over. Oops. Wait a minute. As Dr. Anis has explained, it's not over till it's over. And as of Wednesday afternoon, the market was figuring that out. Bigger picture, we're still in the panic phase that I described last week, which is coming in waves. Do we get to a new lower low? Probably depends on what happens with the oil market situation. Uh definitely heed Anonis' advice on that one. So, it's not clear whether the bottom is in yet. There's plenty of room for more panic if the market scare is not yet over. If oil prices really did go super high shortterm, and that's definitely possible if the I shouldn't say the straight remains closed. the straight is open. If the insurance companies remain uh inclined to block traffic from being allowed to transit the straight, which has been open the whole time, uh well, you know, if the oil doesn't flow, anything could happen. We could easily see $250 oil prices that would definitely tank global equities in a 2008 style of crash. The thing is, I don't think that that's going to happen. There's no reason that they can't just fix this insurance problem and get the Hormuz traffic back to normal. Once the market stabilizes, I think we'll probably get into that aha moment where people say, "Oh, wait a minute." And wars are inflationary, it's usually good news for equity markets, even if it's bad news for humanity. And that's when the rally kicks in, the serious rally that takes us back up potentially even to all-time highs. We're not there yet, and we don't know if we're going to get there. It depends on how this thing unfolds. But I do still think that's possible if the governments and other parties are swift in getting this insurance situation worked out and the traffic back to flowing efficiently through the straight of Hormuz. Well, Eric, this is the way I'm sizing this up. The first thing I want listeners to do is ask themselves a question as to what they believe the actual driver is of the current equity weakness. We have seen a substantial deterioration in financial conditions from uh breakdowns in the financial stocks to uh breakdown in many of the tech names. The MAG7s continue to lag. Uh we are seeing now that systematic traders trigger levels are now being hit and so there's a lot of underpinning issues in the market including the private equity space. So the question is is that is the market deteriorating because of these types of conditions or is it a focal point on what's happening with the war and the impact of oil prices rising? [snorts] Now I obviously both of them influence I don't want to say one is more important than the other but in the end if the resolution to the Iran situation deescalated would that solve all of the other problems and would the stock market be able to just go higher? Overall, I think that there's a lot of problems for the markets here. And while we hit some very shortterm over uh sold conditions that warranted it a bounce overall, the new trend is actually down, there is zero evidence that the bulls have actually regain their footing. Overall, you know, if we rally back up to the highs, I would have to accept that there is some sort of uh neutralizing of the downtrend and potentially a bull um breakout setting up. But as of this moment, the downside window is open for me and we could easily see a 10 plus% market drop um from peak to trough before this is all over. So Eric, let's move on. What's your thoughts here on the US dollar? Well, we're back to 99 12 on the Dixie testing top of trading range resistance. This is definitely war driven. It can definitely go higher on more instability that could ignite a short squeeze and a trend following uh continuation rally and you know a whole bunch of things could happen. But I return ultimately to the fundamental question that I posed last week. Is all of this really dollar bullish or are we seeing more and more fundamental moves that will actually incentivize more central banks to divest dollar commitment and move to other assets? I think that what we're seeing here is just a reaction to the liquidity panic. I don't think it's a structural or fundamental driven new bull market in the dollar. So, I see plenty of room for a downside reversal in the Dixie, but not until this is over. And as Anna said, it ain't over till it's over. Well, under normal conditions, we are in a six-month trade range on the dollar, and we've just traded to the top end of this range. And so, the idea that overhead resistance on the dollar could uh structurally be a headwind uh is possible. And the fact that dollar weakens back to its previous lows is also on the table. But what I'm thinking about right now is whether or not there's a bigger intermarket flow issue from a uh in a riskoff period where the dollar is being bid. And if we see that that uh is able to break out of this six-month trade range to the upside, that could certainly pivot flows with no real fundamental reason behind it, driving even a two or three point rise up to 102 or 103 on the Dixie. Overall, um, if the entire intermarkets remain riskoff and under a lot of stress, I'm not ruling out a dollar breakout here, but I think it's not going to do it on its own. It's going to be a bigger market story. All right, Eric, touching on oil. Well, we covered most of the oil market with honest. There's not a whole lot left to say. The one thing that I've been dwelling on ever since recording that interview, which now for me is uh several hours ago with Dr. honest is his comment about wait a minute this was not a hard problem to solve. If the US had really wanted to solve this insurance problem it shouldn't have taken this long. So what's really going on here? Is somebody not in a hurry on purpose in order to fix this and get the oil flowing? And if so, how long are they going to continue to want to take their time about fixing it? Because this doesn't really add up here. Maybe it's incompetence. Uh maybe there's more to it. I don't know. But let's see if it's not resolved in the next few days. It clearly could have been. So if not, why not? What's going on? That's the question on my mind. Well, you're right, Eric. And us did cover a lot. Overall, it's very hard to do technical analysis on something that is moving with this kind of velocity. Overall, the dip was bought at fib zones. And so, the idea here that oil can still surge higher is something you can't rule out. Overall, it's uh one of these scenarios where the best way to put on trades at this stage is using some sort of option structures. There's a a fat right tail. Bull call spreads can usually give you pretty good payoff structures. So, if you're playing further upside on oil here, uh using uh bull call spreads is a very attractive way of approaching this. All right, Eric, let's touch on gold. Clearly, we're seeing a decoupling from the normal, you know, geopolitical upset means gold goes straight up. That seems to have run out of steam for whatever reason. The downside risk here, though, is not that fundamentals have changed. I don't think that they have. I still think the fundamentals are super bullish long-term for gold. The issue is what happens if everybody else starts selling their gold in order to meet margin calls on other things. And that goes back to the it's not over till it's over. In 2008, and just as a caveat, I'm not expecting a 2008 outcome. But in 2008, even though the gold fundamentals were very bullish ultimately, what we saw was a huge sell-off in gold. Why? Because people sell what they can, not what they want to when a market is crashing. So, the cashless collar strategy that Patrick did a trade of the week on a few weeks ago, I to stay long on gold while still hedging against left tail risk with a cashless collar, not costing you anything other than limiting some upside. That strategy is still more relevant today probably than the day that it was aired. So, go back and listen to that one again if you want to understand how to put that risk collar on. >> Well, Eric, for me, gold is stuck in a little bit of a tug-of-war. one side you have geopolitics, but on the other side you have a flows issue that we had a blowoff top in January and we're in the midst of some sort of a consolidation. Overall, I'm structurally bullish on gold, but it wouldn't surprise me if gold continued to churn in a trade range uh into the second quarter and only after the overbought condition is fully unwound does the opportunity for a new breakout play out. Overall, uh I think that the lows that were put in near 4,500 are likely to remain the lows unless there's a liquidity event, uh where all asset correlation goes to one and gold has a little flush out, but uh I'm not signing a high probability to that. Overall, I think 4500 will uh ultimately prove to have been the low for this first quarter. And so, it's just a ma matter of seeing when this consolidation is over and when a new bull phase has resumed. All right, Eric, what are your thoughts here on uranium? Patrick, the fundamentals are still uber bullish and they're getting better by the day. We see more and more nuclear announcements and in some ways this oil crisis is underscoring for a lot of investors and other people, hey boy, we really do need this nuclear renaissance. Look, it's gotten to the point where even Ursula Vanderlayan gets it now. So, I think long-term the fundamentals are still super bullish, but hold on. If the market broadly is going to continue selling off, which it may as uh the situation's not over till it's over, it will probably take uranium back down with it. We didn't quite get all the way down to the 200 day moving average on some of my uranium charts. I think there's plenty of room to get there. It's probably a buy when we do get there. Uh it so far uranium's been holding up better than the broader market, but if we get a big broad market risk event and especially if we get a big gold selloff because of that, it'll probably pull uranium with it. Frankly, I'm kind of hoping that happens because it's going to be a buy the dip opportunity. The question is always on a buy the dip is how low is the low where you want to start buying? I'm not exactly sure, but I think there's room to go lower than we are now. Well, whether or not the fundamentals are bullish, overall right now, there is no money flow going into the uranium space, at least from uh the spat physical securities. Overall, I do think that there's obviously all the bullish opportunities, but we're going to be looking for a technical breakout to suggest that flows have started to come back into the space and it's a a here and now story. Overall, this consolidation continues to dominate at least on this short term. Patrick, before we wrap up this week's show, let's hit that 10-year Treasury note chart. Eric, clearly the oil spike has created nervousness about inflation fears, and that is reflecting in these rates. Now, while we did hear a great uh take from Jim Biano, the one thing I continue to think about is will the Fed respond to supply side inflation because this is not really monetary inflation. And so it's entirely possible that this would result more in a Fed that is a wait and see more than a Fed that becomes hawkish. Nonetheless, uh we'll uh see how it shapes up in the weeks to come, especially since we have the FOMC meeting next week. Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck or just go to bigpicturetrading.com. Patrick, tell them what they can expect to find in this week's research roundup. So, in this week's research roundup, you're going to find the transcript for today's interview, as well as the trade of the week chart book, which is discussed here in the postgame, including the link uh to the special webinar we're hosting on hedging your portfolio, which we're hosting on March 16th on Monday at 4:00 p.m. Eastern time. And you can register at bigpicturetrading.com or click on the link in your research roundup email. We also included a number of links to articles that we found interesting. So, you're going to find this and so much more in this week's research round it. That does it for this week's episode. We appreciate all the feedback and support we get from our listeners, and we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners that write or blog about the markets and would like to share that content with our listeners, send us an email at researchroundup@macrovoice.com and we will consider it for our weekly distributions. If you have not already, follow our main account on X, macrovoices for the most recent updates and releases. You can also follow Eric onx, Eric S. Townson. That's Eric spelled with a K. You can also follow me at Patrick Serzna. On behalf of Eric Townson and myself, thank you for listening and we'll see you all next week. That concludes this edition of Macrovoices. Be sure to tune in [music] each week to hear feature interviews with the brightest minds in finance and macroeconomics. Macrovoices is made possible by sponsorship from bigpicturetrading.com, the internet's premier source of online education for traders. Please visit bigpicturetrading.com [music] for more information. Please register your free account at macrovoices.com. Once registered, [music] you'll receive our free weekly research roundup email containing links to supporting documents from our featured [music] guests and the very best free financial content our volunteer research team [music] could find on the internet each week. You'll also gain access to our free listener discussion forums and research library. [music] And the more registered users we have, the more we'll be able to recruit high-profile feature interview guests for future programs. [music] So, please register your free account today at macrovoices.com if you haven't already. [music] You can subscribe to Macrovoices on iTunes to have Macrovoices automatically delivered to your mobile [music] device each week free of charge. You can email questions for the program to mailbag@macrovoices.com [music] and we'll answer your questions on the air from time to time in our mailbag segment. Macrovoices is presented forformational and entertainment purposes only. The information presented on macrovoices should not be construed as investment advice. Always consult a licensed investment [music] professional before making investment decisions. The views and opinions expressed on Macrovoices are those of the participants and do not necessarily reflect those of the show's hosts or sponsors. Macrovoices, [music] its producers, sponsors, and hosts, Eric Townsend and Patrick Serzna shall not be liable for losses resulting [music] from investment decisions based on information or viewpoints presented on Macrovoices. Macrovoices is made possible by sponsorship from bigpicturtrading.com [music] and by funding from Fourth Turning Capital Management LLC. For more information, visit macrovoices.com.