The Oil Price Forecast Nobody Wants To Hear | David Murrin on @LongviewEconomics

Summary

• Energy Outlook: Guest forecasts an extended Oil Bull Market, with Brent potentially reaching $150–$200 in months and up to $350 within four years driven by conflict and supply constraints.
• Middle East Risk: Closure of the Straits of Hormuz is seen as asymmetric in Iran’s favor, likely requiring months to reopen, sustaining high oil prices and pressuring global shipping.
• Defense Spending: Significant shortfalls in missile defense and short-range systems imply accelerating Defense Spending needs, benefiting the Aerospace & Defense complex.
• Bonds and Rates: A prolonged Bond Bear Market is expected as Rising Inflation resurges with energy shocks and deglobalization, undermining sovereign debt markets.
• Equities: Elevated equity markets are vulnerable to drawdowns from energy shocks and geopolitical escalation; the guest stresses downside risk as liquidity fades.
• Precious Metals: Near-term downdraft and potential multi-year consolidation in Precious Metals after recent highs; preference shifts toward energy over gold/silver in the current phase.
• China and Geopolitics: China’s long-term war preparation, hypersonic capabilities, and energy stockpiles elevate Geopolitical Risk and add structural support to energy prices.
• Market Strategy: The guest moved out of gold/silver and into energy, emphasizing Energy Security and defense as core allocations while avoiding duration risk.

Transcript

Welcome to Long View Conversations with This is the 15th installment of our podcast where we interview experts from the world of finance and related fields. In prior episodes, we've chatted with global economists, global strategists, geopolitical experts, experts in AI, experts in accounting in China, experts on property, and many others. But always looking for the markets angle. How is this relevant for asset prices? So in this episode, we're thrilled to have someone on the show with a highly pertinent skill set with whom we can discuss one of the top questions at the moment which is a key focus of markets. That is the question of Iran. How will it play out? How will asset prices behave? And pertinently, how does this current second front of war fit into the long-term cycle of empire theory? My guest on this show is David Murin, global investor, physicist, CIO, and author known for his theory of the five stages of empire amongst many other things. He was also our guest on our first Long View podcast back in June 2022, just after the start of the Ukrainian war. Hope you enjoyed the conversation. Let's get stuck in. So, David, welcome to the show. F I mean, fantastic to have you back. I mean, just to remind everyone, you are our first guest on this podcast and uh you're also our first client as you well know. So, back in the day 20 odd I I was thinking probably early 2000s. So, >> it was it was but you were clearly a talent that you know making that first step as your first client was a privilege and look at you now. >> Well, you're very kind. I mean looking we're looking older. You're looking younger of course I look older but >> same the same to you actually. [laughter] [gasps] But um great to have you on. So g give give give us a quick flavor. I know you've done so much in your career. Give us a quick flavor of of the CV and and what you've been up to and and where you're at now. >> Look uh for those who don't know about my work, I trained as a physicist specialized in geoysics. Spent three and a half years in a papaginian jungle with a bunch of cannibals. I was at 21 first day at work on a helipad and I had a full tribal riot. 60 of them wanting to eat me which was you know and moment and actually it's the first time I ever saw collective behavioral patterns of one man's energy charging everyone else with the same anger fully armed had eaten people recently and like fronting it out and watching that whole energy dissipate and that was actually interestingly first day at work or professional full-time work it shaped my career since then which is the study of human collective behavioral patterns and from there I joined JP Morgan made the same observation on trading floor that oh dear we're rather like our papinian brethren we behave collectively despite our intelligence despite the fact we think we're better than them most people are reduced to a collective subliminal behavioral pattern when they engage in markets and they make fairy tales up to go and tell what happens and one of the things that's very interesting is that we have an amagadia I can never pronounce it properly being dyslexic we have that little bit in our brain that remembers our bad experiences and squeezes hormones out and so we try and learn from those experiences by avoiding that sense of pain or failure. But what is very interesting about group collective behavioral patterns, there's no repository for them in the brain. So people say things and do things collectively and have no attribution for them afterwards, which explains an awful lot of the mess we're in in this day and age. And if you're guilty of that, it's really important if you're in markets to work through the dynamics around that and do some inner psychology. I just wish our leaders even understood that concept because they just say things and there's no attribution for what comes out their mouth which means they're not us at all. They're just echoing collective thoughts. >> That would be good. I mean so so really so it's interesting. So so and and I agree of course with a lot of what you say. So hering sort of is a a sense what you started to taste uh in the papu guina jungle and that and that took you into systems and technical analysis as well. >> Well I hate the word technical analysis. Look, it's a really crap word. What you really are studying is human collective behavior and you use price patterns that are part of that process, but there's a lot of other informationational sets that prices generate from and that's what I did. I specialized as you would do as a good scientist and you know as a quantifiable behavior and price was that and created models for JP Morgan that you know changed the way they took risk that led me to being setting up my own macro fund which I ran for almost 23 years as a CIO and we did all sorts of you know really great things really great trades great things um and then 911 came along >> and and that that was emergent was that emergent yep emergent asset management >> and that's where you know You were that was your first customer emerged asset. >> Yes. >> By then we've been number one in the world in the 98 Asian crisis and people like George Soros wanting to give us money. Remember that lovely little squeaky voicing but no one's refused me before. I said George on those fees I'm refusing you forever. Anyway those lovely moments in history and in 98 he was the man as you can all imagine people forget now. Um, and then we did all sorts of things um, until 911 came along. And I remember thinking, "Oh my goodness, that was terrible to watch obviously and deeply traumatic." But I asked a really big question. And for all of you out there, the biggest thing I would encourage you to do is ask the right question. And if you manage money, asking the right question is really important. And most people don't. In this case, I latched on to the right question. Was that an accident? Or was it some part of a systematic failure of the American system that would see the very opposite from the neoconservatist belief of the a century of American democracy ruling the world and something completely different? And of course, I turned to the models I'd created and there wasn't really enough price information to make a determination. So I had to sort of think about it and I thought well if price patterns work because underneath they map out collective behavior patterns of in effect Elliot wave cycles of five up and three down which was a model that I based all my work upon and Elliot's work is brilliant although I really wonder where he got it from because it's so complicated it appears out of nowhere it's almost as if he he got it from somewhere else. It's a very interesting phenomena which I'm actually written about and publishing a piece next week. Um but going going around that I created this five cycle empire model which we've talked about a lot and it used wars as a clocks of empire defined wars as being actually different expansive wars contracted wars civil wars all sorts of things that made wars different even though most people think all wars are the same. They're far from it. Just like all arguments are not the same. An argument between two people the same age is different from two people of different sex is the same age. or the argument between an older person and a younger person is different in flavor and wars are exactly the same and at the same time I'd been a lot of work on contraatives work and we picked up the base or the beginning of the cycle in 2002 I was really excited because you know we made lots of commodity investments which turned out to be hugely successful >> yeah good timing >> thing about it was I remember thinking if this is right and we're making money the implication is that we will be in what I think is world War II somewhere at the early stage of 2020. And that was really sobering to realize you were taking advantage of something that implied something so catastrophic. And at that stage it really sort of wo in with this idea that it wasn't an accident. America failed and quickly I'd worked out it was the last of the American or the Western Christian empires. It had gone into decline and now there was a power vacuum being created. And there's a clip of me in CNBC in 2003 explaining this with a lady on the other side telling me that America would never have its sun wax and it was like no other empire and it would rejuvenate itself and you shouldn't bet against it. It's a great great interview because it marks a point in time that's way beyond and earlier than other people. It's on the site >> and um anyway >> it's on the site. That's good to know. It's on your site um marinations.com. Yeah, it's global forecaster.com or davidmarin.co.uk. Go to the media section and you'll see the CNBC clip which gives you an idea of how long that these ideas come. >> Perfect. >> And then there was >> it takes a long time. There's so many keep going but there's so many questions that come out of this but keep going. >> And then there was this lovely question well well if America you know it's a client who's going to take over and they said well it's the Chinese. And there was just mirth and laughter at that stage in 03 that a a group that you know a country that only copied and assimilated as I call that stage of empire could ever out innovate the great America. Well anyway there was another part to this story and that was a contractive cycle and conflict. So now I had a decline of a system that we thought was hegemonically dominant. A vacuum created and a system that was actually had been waiting to move into that vacuum since 76 but the glass ceiling of American power had stopped it. And this transition which you could see would mean World War II. And so 20 years before I would argue World War II started, the invasion of Ukraine, I was acutely aware of what we were walking into. So I decided to be very bold and try and explain to people just what was happening to us and the milestones along the way that we were going through. And there, you know, one of the first things I did was managed to overcome my dyslexia and write breaking the code of history, which is above. >> Yes. >> Excellent. And I I remember that's when we first met because I I was thinking about this earlier today that um one of the first times I ever came to see you at Emergent. I remember you had the book in sort of pre publishing format and was showing me this wonderful book with its fantastic explanation of five stages of empire because I think that because when was it because it probably was published about we probably met in 0203. >> Well, we met in 023 and I started writing the damn thing in 05 and it wasn't >> Oh, maybe it was 05. Okay. Okay. It must have been a few meetings in then. Okay, fine. >> It was >> When did you publish? >> 09. That >> 09. >> But I'd spoken widely for literally seven years in all the public speaking I did that this was happening. And people said write a book and they said no chance I'm dyslexic. Anyway, it's there for everyone to read. Not to say David's right, but actually it is and this is really I think fascinating for everyone is it represents a fundamental organizational principle which echoes through history and has been highly predictive through the past two decades >> and and just to expand on that because I've heard you speak about this theory a number of times and and obviously various people have theories of cycle of empires but yours is more if I get it correct It's more to do with the the way people think and the way collectively they act influencing outcomes and influencing the way systems strengthen or weaken over time. Would that be correct? >> Sort of. >> Sort of. Yes. >> Sort sort of. And the reason is is I would say I would agree with that more prior to 2018. But I had this in physics there is this whole unifying theory hunt to amalgamate the five forces as we know them in the universe into one theory that explains them all. It's like the golden chalice. And I kept thinking about all right so I am observing a five stages of empire social system on a fractal basis. Countries do it, companies do it, super empires and empires do it. So that's the observation. That's not the why. So what is the driver behind this process? And I found myself sitting down and going to basic principles and thinking well what do we know about the universe? We know the universe is entropic as in >> and you must define that. Yes. Because for the for the audience >> is it's probably the most influential dynamic that plays on your existence and human existence anywhere. It's the observation that order goes to disorder. So you know if you for example look at a program and the matches fall on the ground and spread over the ground you know that time's going forwards but if suddenly the matches pick themselves up put themselves into the box the box jumps into the hand we know time is reversed and we know time is reversed really because disorder is going to order. That's what we're observing. So the best way to think of the definition of time and the way our universe works is disorder unfolds with time. Now we as living creatures have to find a way where if we stood there the forces of disorder would rub us away. So we started off as hunter gatherers and we realized that as a species operating coherently as a group gave us a greater chance of survival than an individual and those groups developed social dynamics in tribes and they became bigger and the social dynamics that we're talking about in the five stages of empire are a force adaptation that maximizes what I call anti-entropy our ability to survive >> and that came into things and examples and the Roman Empire is a very good example example of this. For example, they had lots of gods when they started because it didn't really control their world. They had a grain god and they had a water god and they had, you know, a disease god. So, what do they do in their civilization? They gather grain from all across the Mediterranean using it as a superhighway. Now, if there's drought in Spain, they get their grain from Egypt and Rome just carries on. Oh, don't need a grain god anymore, you know? Don't need a disease god because we create sanitation. don't need a water god because we bring it into the city of waters comes from far a field and we don't care about drought and so it was not a coincidence that we went from polytheism many gods to explain our world to monotheism in the form of Christianity a representation of a greater sense of human control and anti-entropy of our system now we do something else really weird >> so we live in a challenging environment as it is but we also super challenge ourselves and my thesis is that humanity is not all the same. We have 70% who have lineage to agrarians only 12,000 years ago. They like predictability like the pre repeatability things that are regular railway track mindsets because if you think of an agrarian, you do things regularly. So it's ingrained into that form. And that was when the human population suddenly exploded with that mindset. But the original humans before that were hunter gatherers. They were much more adaptive, free flowing and very very warrior orientated linking to their hunting and they probably perpetuated as the leadership gene in the warrior societies as you grew through history and I would argue that they're better equipped with entropy and adaptation. And so what we have is a process whereby in the empire cycle you start off and you probably got a linear control. Charles the first would be a good example. You then need to adapt. There's a civil war. The war is won by adaptive lateralization. The new model army, new way of fighting comes along. New model navy comes along. Now you've got a fully militarized post English civil war Britain. And what does it do? It just starts fighting with its neighbors. Starts running down its resource chains because now it's fully adapted and has advantages. And it runs all the way up the curve to Nelson's Navy in Trfalga and Waterloo with the adaptive red coats and the way Wellington fought always out adapting its enemies and outf funing them through creativity. And basically it's built an empire. Only when you get to the top when you roll over past the first world war or I'd say probably the turn of the 19th century did everything become more process and linear driven. And even then it still had lateralized adaptation which finally disappeared after the second world war mainly because most of our adapted people had died in the process of fighting for the country. >> But what's interesting about it is empires are a product of maximizing human anti-entropy and we're using wars to create lateralization through adaptation to create our growth spurts. >> Okay. So sort of to summarize because a lot a lot there's a lot in that obviously a lot of it if not all of it's in the book but but but really what you're saying is you need >> this is later the framing of the behavioral pattern through living in an entropic universe is literally about seven years old in my thinking >> right okay so it's this idea that that uh some some of the some of the human race came from the the lateral part of the of the brain so more creative and the majority came from from the linear part of the brain or may yeah maybe it was hunter gatherers versus aggro side as you say or maybe some some other way but that's the way it evolved and for humans to to to push back on the entropic the the the idea that you go from order to disorder you need collective organization and leadership tends to pick that up and it tends to be the lateral as you get into wars and then but then there's the commodity aspect I suppose which sparks a lot of wars how would that squeeze into >> this This is >> the sort of contraatia of stuff we've talked about many times before. Yeah. >> When Kandra first, as you an economist know and we first encountered it, it was about inflation and inflation and wars and of course >> it's no coincidence that he was Russian and Russia was a commodity economy. So it's like personified in the system that he observed it in. Whereas if you were probably in Britain and central Europe as a trading system wouldn't have been as apparent. And um that process of this commodity process where you created increased inflation and wars was what first grabbed me because all of a sudden in 2000 there I was with someone that studied war wars and conflict since earliest age as my main passion outside [snorts] work and suddenly war in my my profession amalgamated which was an incredible moment and I think there's something more to it. Contra talked about 54 to 56 year cycles and I think some of the labeling of wars is incorrect as I'll explain to you and you run through. I don't think it's actually predominately a 56 year cycle. I think its main cycle is double that. It's 108 to 112 >> because if you look at 19 if you look at say where we are now 1914 the Napoleonic wars the Franco Spanish wars they actually regulate in that cycle. They're the and think of it as a pulse of entropy that surges into the human system and creates more friction. Imagine this science fiction show where entropy is, you know, a series of cycles over time and that imposes itself on the human system that of the empire of its time and the way it competes with other empires. And when you have low magnitude pulses, people tend to be more tolerant and considerate and their threshold of conflict is lower. When you have high energy pulses, people fight over a banana skin because they're just like all jiggled up. And that so what the contractive cycle touched upon, what I really call is the wartime hegemonic cycle, the imposition of a rhythm to the way these empire cycles compete with each other. And therefore, there's predictability towards challenge and conflict. And if you go and think of it as an entropic pulse and a peak and when the war breaks out, they're different because the war breaks out when the friction coefficient becomes intolerable as the pulse raises towards its peak. >> So to give you an idea, the the peak of the commodity cycle in the Napoleonic wars was 1808. >> But war started a lot earlier than that. It started in roughly 1792 to93. massive friction between Britain and France which we'll talk about in again come back to then you go to 1914 the peak was about 20 to 21 but war broke out with enough of this entropic surge into 14 six or seven years before the peak and now you come to our peak in 2030 and we broke out 8 years before the peak now the Napoleonic period was particularly frictionful because there are also these intermediate wars we had a cold war into 75 that a contract of peak but we didn't kill each other but it had hegemonic dynamics between Britain I mean between America and the Soviet Union so it was a hedgemonic conflict that we all felt might go wrong but didn't >> so I would argue the entropic magnitude of that pulse was less in the way it interfaced and also the empires were old the US and and and America were not young systems they were relatively established so there was friction controllers and also they remembered the second world war and how much blood it had caused and there a generation that remembered that. But if you go to the intermediate war in the 19th century on most charts they'll have the American Civil War. But that's just wrong. That's the American interpretation. There is a piece of history that has been missed which is the rise of Napoleon III that basically tried to rebuild his grandfather's empire. And if you go around the coast and you see Palmerson's follyies, they were all about Britain fearing the rise of French sea power that would invade Britain and at the same time have this big army and essentially that was our cold war and Palmerson's follyies into the sort of period of of 1866 was the cold war that no one ever talks about what was happening in America. That wasn't like hegemonic dynamics. This was hegemonic dynamics to a lesser degree. And the really thing about it was there was Napoleon III preparing to go to war with Britain and on the other side there was Britain's ally Prussia and these Prussian states that under Turpets came together built this forged in steel and fire and had this revolution in military affairs of the science of warfare the needle gun and rail transportation and focus and when the war came in 1870 they flattened the French in six months. Napoleon third was taken prisoner in three months and the cold war that was a threat to Britain just disappeared. But then if you go back to the last cycle and this is so interesting you look at the seven years war and Britain been fighting the French already pretty stiously for well over 50 60 years. The friction was so great that that that cold war became a world war. The first great world war was the seven years war. That was the war that Britain took control of the oceans really if you look at it and it just confirmed it in the Napoleonic war. So, so that's an example where not only are you looking at the magnitude of the pulse that's coming through in this war cycle, you're also looking at the state of these systems which are fighting each other. They're not often in the same energy state. >> Yeah. >> Sometimes they're higher. So to be clear, so so in the old days we I would I I think you would have argued I think you would have argued, but people would have argued that the high commodity price caused the war. I think you're now saying it's the other way round. The system drives the commodity price. >> Exactly. >> And culminates in war is essentially what I think you and I am I right in saying you would have said it the other way round 10 years ago. >> I would have done until until I really interpreted the world through the entropic behavior. Yes, I would. I mean, in the same way as I now see markets very differently, we live in a world for and you're dead right. It's it's amazing how and I really love the way that my work has allowed me to evolve into a better way of seeing. >> It's important. >> It's really valuable because it now is almost like a unified theory of human behavior under the umbrella of entropy. And and in the same way, you know, we when I studied quantum mechanics and you did the Shredder equation, you felt like you're a real man. It's huge. It's difficult to manipulate and it's conceptually impossibly hard back in you know when is at university in in 1980 middle or the early part but now we have quantum engineering all around us quantum sensors quantum computers and there are whole new theories about you know dynamics so there are two quantum theories which I think everyone all of you in the market should understand so one is the microtubules that Penrose found in our brain so >> okay you got to explain that >> I'll explain But but but again it's important to move on our idea of what markets are and how they behave because we have to we're stuck in a a Newtonian world in many ways. So one of the things that that is fascinating about this story is that when a physics professor talked about quantum mechanics and said and the observer changes the outcome as in the observer changes the outcome in Schroeder's cat. No one ever said the observer was conscious or the observer was human. Right? They didn't say well the monkey changed the outcome and it was a human. So what could have been said was consciousness interacts with the universe and changes the outcome. That's what should have been said. And Penrose found these things in our brain which suggest our brains are actually quantum mechanical computers. >> And that is a completely different way of looking at consciousness. And at the same time there's another theory which is called the theory of quantum retrocausality which wait for it links the past present and future in a nonlinear way. Okay, before you get to that because that's obviously a big statement, just go back to the first bit about the brain being a quantum so um machine or how >> the way so when we used to say a conscious person changes the outcome of the the state of an atom what should have been said is the quantum computer which is our consciousness interacts with the quantum universe to change an outcome. So this whole stuff of eastern philosophies that said basically positive thought, positive outcomes, universe changes, it's real and it's in quantum physics. And now we understand our brains to be most likely quantum computers. When we're building quantum computers, the chance of emulating consciousness and thought process with a quantum computer are vastly different than an analog computer. Different type of AI like us, I suspect. So that's the big issue to fall out of that conversation. AI are coming and quantum AI is going to be like nothing we ever imagined. It's going to be like on steroids. >> That's an amazing comment. So So obviously everyone's very excited about AI and agentic AI as we see now and many of us have sort of tasted a bit of it. You would say once it becomes I I I don't know what they whether they're presumably they're trying to do it quantum AI is that coming is there any >> I mean it's coming because the number of cubits computer increasing so it's just time and yes we may get some sort of ang sort of some old sort of analog singularity with the way we're going but we're definitely going to get a full singularity with a quantum computer as they get bigger and bigger and bigger and organize information and think differently. the universe. >> I mean, one of the things about rail guns is, you know, rail guns have a problem. We swapped a bit, but rail guns are material science. The barrel gets too hot. You keep firing these rounds, and we didn't have a material that didn't melt. Somehow the Chinese came up with it, probably using some some quantum physics. The Japanese are onto it. Now, the Americans are back on it. And quantum computers will be a heart of that, at the heart of that material solution. So >> now we're coming back to markets not being like a machine that takes in data and changes. And the thing that really blew my mind and I'm going to share it with you because we're talking about conflict, war, and markets and you'll see how this all fits in is essentially that when you go and look at the first world war and you look at prior to the outbreak, a month after a Jeep Ferdan was shot, the bomb market just carried on like flatlined. First shot was fired 50%. just like that. I mean why there was no calculation of increased risk. The stock market did gradually start to migrate lower and the stock market in the UK did not turn until the summer of 1918 in July. And what was so interesting at that stage the public perception was that war would last at least a year and a half even with American reinforcements having got through the German spring offensives. But the market made the low in mid July and in August this new form of warfare which they've been working on and didn't know worked. Combined arms warfare and the battle of Amon came about that surprised everyone who fought it because it was so successful and a 100 days later the Germans were a roll back. Yet the market turned a month beforehand. Great luck you say? Yeah. >> But then you go to the first world war. The British stock market turned a month before the 15th of September in the battle of Britain and we were losing the month before that all the stats were we weren't going to make it yet a month later >> in the second world war. Yeah. >> Yeah. And the same with the battle of the currency. Can I can I just to just to push back a little bit? Is there not is there it is not part of this hedging and uh risk of risk management and people getting a bit concerned trimming a bit or >> No, >> I mean I I I I would accept it's hard to see it perhaps if well well it's maybe hard to see it if you think there's a new weapon coming it maybe people have a sniff of it and start to >> No, having studied these things in absolute I wrote a book about the battle of Amu. No one had a Scooby-Doo what they created or that the Germans would be so vulnerable to it. No one. It's just like historical records. Anyone in the know. So there's no way there was a secret weapon coming out and someone as friend of the hedge fund in 1914 got the information first. None that much. This was properly way before any anything was available which goes back to retrocausality. And the battle of the Coral Sea was no different. And Stalingrad was no different because before Stalingrad the Germans were unstoppable yet their stock market stalled in Barbarosa when it looked like they were winning everything before they stalled physically. >> Yeah. >> So these are really good data points because they're not like releases of information or this process. Let me let me try let me try again because um I I'm interested in what you say but but um so it's 1940 isn't it that in World War II the British stock market troughs on the on pretty much on the battle of Britain I think the month before the turning point on September the 15th 1940 a month >> but it it yeah so it looks like all is lost so it's going down into that battle and and that and that and and the evacuation from Dunkerk we've all seen the movie was was obviously a low point it looked like we're pretty much all was lost. So, and then the market went up through to the end of the war from there. Is that not is that not market just discount? So, it goes down into into what looks terrible. It's discounting into it and then it rallies for 5 years after it. So, it's like you're the point of peak pessimism just before the worst part of the war. you are >> and then slowly you're you're you tell me but I would have thought I mean in common in common market parliament you obviously we have new theories coming that you're describing to us but in common market parlance you just say the markets you know discounting the future and and and pricing in entail risks. You know what? I think that is such a Newtonian way of thinking about it because >> that and that of course is an an insult >> in this but I'm clever enough to know that >> in this in case it is yes and you are [laughter] >> because because if you go and I mean there's no way you can price in something that is a war where you have no knowledge and you are losing and you know why does it choose to turn when there is no evidence and there's a good reason to be pessimistic because you're having the kicked out of you. Why does it have the why does it turn at that stage? >> Well, plausibly because everyone's sold because they can all see they're all pessimistic. So, the pessimism is in the price. Everyone's out at the bottom >> and then it turns. >> Yeah. But if they carried on losing and we got invaded, it never would have stopped. >> It wouldn't have stopped. Yes. True. >> So, >> so there's a there's a quantum of how much you've sold. Look, you know, I a price and overextension and overselling are all part of wave counting and emotion. This is these examples really made me think that something more happens. And as we study quantum quantum dynamics and if assumed we are a quantum computer in our brains, then the market is a quantum system. And as a quantum system, it does things that are retrocausal as in sees and adjusts for the future in ways that are not about discounting. It's something completely different and so there's something there having you know intermixed my physics and quantum mechanics there is something there to be examined and it maybe needs you know better articulation but I think it's very I wouldn't be a general for example going into I'd want certain conditions in my stock market as I went into my turning war if I was a you know field marshal of a country's army on the back foot >> yeah yeah so no It's a fascinating theory and it sounds like you're writing about it and there'll be more that people. So, >> there's a lot more. >> There'll be more more coming. So, let's let's keep let's keep going because uh there's so much to talk about and I know we're not going to get we're not going to get far enough through the stuff we need to talk about, but >> so so everyone here is now listening thinking, well, that's lovely abstract theory. What did you do with it? >> Yeah, exactly. >> And that's why it's really interesting because I am a CIO. I'm a scientist and I only do things that actually I think create predictability so I can understand the world better as in make better investments and make better judgments. That's what's driven all of my work. So what do we do with this? Well, I understood that the west was in decline. I was able to detail how decline looked. Took me a little while to understand the stock market is the last thing to manifest decline because in the phases of decline they print money and the stock market gets hyperinflated and that's not something that really was talked about and it was in the records. The bond markets carry the burden and I saw that very clearly that in an empire cycle you have a first debt mound which is when you build your monopoly and you borrow from yourself. When you become an empire, you are a monopoly and pay it back. And then when you go into overextension, as you increase towards greater entropy, you start to borrow from everyone else, but you never pay that one back. That bit I got from the outset. >> Yeah. >> The interesting thing about how that inflates a stock market and how a high stock market is actually part of a declining system when it's highly leveraged. That bit is something we've all witnessed to the nth extreme. The thing that it does that again is is not something that is intuitive is when you print money you are compensating in effect for real productivity. Example, I have no leverage in my system. I make 4% a year. I'm not as effective in running my business. I make 2% the next year, but I have a bright idea because I have a good CIO and we double our leverage and everyone looks at 4% returns and I look great. The next year I'm down to 1% and I leverage four times and I still look great. And the next time down to half a percent, I leverage eight times and I just keep doing this on fractions. And because essentially there's a stable environment with an empire that's creating an illusion of capability and there's no external challenge, I get away with it. But what I am is fat, dumb, and happy, unadaptive, and I've killed the business because it no longer is has real productivity. >> And I also stay in top as an unsuitable CIO. or CEO in this case. Same for our prime ministers, same for our presidents, same for our companies. For 20 years, money printing has put the wrong people in charge of our industry and countries, non-adaptive people. And that means that as we go into this phase, we're particularly vulnerable. And it also does something else. It means our stock markets are at the high. Everyone's full of dopamine, so there's not a problem. No, it's not really going to happen to us. But as soon as you start to see the stock market come off and the cortisol flows and the glasses come off, the reality of what we really face will hit home with a terrible shock. >> That is that is a very um fair statement. I I would agree with lots of bits of it and there's lots we could explore in it. But before we do that, let's can we get in right into the sort of the very here and now. So geopolitics, military capacity, military strategy is a is a big part of what you do. And I remember when we spoke in June 2022, um when we did I did my first podcast, which you were the guest on and you talked about the idea of World War II [clears throat] pretty much getting going and it's in many ways that's precient. Some people would say some people would still be in denial of that and some people are starting to accept that idea. So, but obviously we've had an invasion of Iran. We're we're speaking on Monday the 16th of March just to give a a date time stamp to everyone and at the moment the oil's at 100 and everyone seems slightly unsure. The straits of Hormuz are closed. How How do you So, let's start with China and then go to Iran because China is the rising empire. How does that all fit into where we are right now today with a war in Ukraine and a war in Iran? >> Great question. So everything that's happening to us is and goes back to the rise of China. China that was delayed and tried in the third Taiwan Straits crisis realized that physical military power was not at their behest to dominate America when two carriers in a muse cell through the straits. So they went covert and they came up with the most cunning, sophisticated plan in history. Seduce the West to invest in China, get manufacturing at the Western expense, strip the IP from the manufacturing process, steal as much as possible, turn themselves into the greatest manufacturing base in the world, demanufacture the outside world, and from that basis envelop or start the biggest arms race in history, which of course the enemy doesn't have the capability to match. That was their plan. Brilliantly done. Brilliantly done. And so when she came to power that was a transition from covert power from hiding like the power of China to beginning to demonstrate the power of China. And we are completely the other side. They now understand that in the western desert Pacific as I'll talk about they have total dominance. So they're also very sophisticated. And to anyone when I speak to you know the higher command course um one stars before they take their office I ask a question say so how many of you have read Sunzu and if I'm lucky one out of 50 holds their hand up and the rest think it's some sort of like joke pack that would come out of a cracker and I look at them and say really Sunzu had insight into his own thinking and others to understand the terrain of human psychology. He understood deception and manipulation as much as he did about how you then fight the war. And it's representative of a whole nation's way of combating us from a a deficit position in effect an inferior position when they face this powerful American hedgemen. And their whole force structure is not just I'm going to send my army, navy, and air force to get you. The whole country is militarized. The whole country expands it. And we are seeing the manifestation of that in many ways. So what they did was they did like any good challenger that faces a symmetry, they built alliances. They built one with Russia who basically had declared himself against the West from ' 07 onwards and we still didn't really get it. Didn't move. Certainly didn't respond in 2014 when he invaded Crimea, which is when we should have shut him down once and for all. Terrible mistake. And even then, we were still disarming thinking the peace dividend were gone forever. That includes America. By the way, America had its own version of a peace dividend, but just thought it was so hubistically strong that no one could touch it. And then the other group that they constantly fed in was the Iranians and the North Koreans. In fact, the North Koreans were probably the first puppet that China used to humiliate American power because it couldn't stop them becoming a nuclear power in the peninsula, which it didn't want in any way. And it was a s first sign of American impetence. So carefully they eroded around the edges and then we come to Iran. Well actually let's go back to Russia. So what right did Putin have to go to war. So let's be really clear from 07 onwards he became more belligerent. He didn't become more belligerent because of what was done to him by NATO. It happened that when the the cold war collapsed it because it was the end of this contractive cycle. Russia suffered as a commodity producer and it went bankrupt. And basically the only thing that by when Putin came in he thought he could do was link to the EU and be part of the EU because Russia's commodity production wasn't making it work. So he started off by saying I want to be part of Europe. I want to be part of NATO. But by ' 07 the commodity cycle had kicked in and he was starting to develop revenues again and those revenues fed his belligerance. >> It wasn't what was done to him. It was suddenly he had options for the first time and he was a child of the USSR that believed the greatest catastrophe was its collapse. So we didn't do it to him. The cycle allowed him to express his true views and we didn't wrap his knuckles enough. Those things are all hallmarks and the Chinese saw those things although they weren't involved in the way they crossplayed. And then the Chinese obviously supported Iran because it was an oil producer. Iran was not just a Middle Eastern country. It's a Shia country. If you're not up to speed with what a Shia country is, it's a bit like the Protestant movements compared to the Sunnis who are a bit more like the Catholics, institutional, more material in some ways. The Sunnis are far more fundamental. They're Persians, highly productive people like the Turks. And when they set up the Islamic Republic, it was set up around a single foundation, the destruction of Israel, because they thought it would bring Sunni and Shia together in common purpose, and they would then become the dominant system as Persia had been before across the Middle East. It was all founded on the destruction of Israel. And of course they started to get an advantage when the second Iraq war failed and they started to move into the vacuums as we came out of the southern part of Iraq which was just sheer part. They influence came in. Many British and American soldiers died because IRGC supported those guerilla activities and our men died both American and British because of that and lack of snatch land or too many snatch Land Rovers. But that that was them against us. And as they grew stronger, they created this model which was they wanted to be a nuclear power because they could destroy, you know, Israel with one or two bombs and they also needed a shield and that shield was a missile shield and an axis between Hezbollah, Hamas and also the axis of resistance and that what they want to do is create a sword of damicles and meant Israel couldn't challenge their unimpeded move to be a nuclear power. Make no mistake, they have been totally resolute in that single mission. The people of Iran are moderate. The 10% who rule them are extremists and they genuinely generally will not let go of that. We'll come on to that for now. And so Israel has had to tread a very clever path. And one of the things I believe it did do was realize it had lost its Jewish lobby in the states. And I do honestly think the evidence is very strong that Mossad created the Epstein ring. And the eps ring was a pedophilia ring because you only have control over politicians if they've done something as illegal as pedophilia just having you know the odd sort of encounter they can get away with. But this was full control of American leadership and politicians which is truly must be widespread. By 06 he went to prison and he needed more cover so he went to the Russians. Suddenly the Russians also have this information which explains Putin's control of Trump and also explains Netanyatu's control of Trump and you can see the two pulling in different directions at time. He must feel very pulled. Not that I have any sympathy for it, but you can see these controlling levers. >> And so then we run into recently and if you just go think of this friction coefficient increasing, off goes Putin, poor invasion. You know, the Ukrainians have been an inspiration in how they have adapted to defend with determination. Yeah. >> And just like we're not ready, I just hope we can be inspired when we get clobbered that we recover the way they have. They're now out adapting the Russians on the front lines. There's evidence, I think, that the pendulum swing is now in their favor and that there's good chance we might see incress into Russian lines, which puts Putin really on the back foot. He is on the back foot and until this war in Iran, his oil price, his economic constriction, he'd given Russia in effect to the Chinese. If the Russian people understood that, they would be really upset. But China had become a satellite of of China and and China had basically also was enabling Russia's war with weapons. Simple example, they were providing little jet engines and those jet engines were strapped to the back of 136 Shia drones and suddenly a Geran drone could fly at 30,000 ft and the majority of intercepts were done at low altitude with machine guns. Big problem last year and this year for the Ukrainians. They strapped the same little jet engine to glide bombs and suddenly glide bombs could be launched further away and the airplanes couldn't be hit by air-to-air missiles or groundto-air missiles. The Chinese have a lot to answer for for the misery and there's probably a thousand Chinese advisers sapping the information of this war petri dish back into their war machine um on the front lines in Iran as we do but they do it more effectively because when it gets home they use the information and the industrial base magnifies its effect. And so what's happened with Iran is you know the Hamas event I think correlates to a massive pulse of inflation in Iran and I think the Iranians created a distraction to move because they had a domestic issue and we know what happened on the 7th of October. I think Israel has done an incredible job of balancing removing the sword of Damocles like navigating through. If they all had acted together, they would had a much harder time. But the fact that Hamas and Hzbollah were mistimed in the way they responded gave them a great chance. And then we go to the 12th of, you know, the 12- day war. There's absolutely no doubt that the Iranians were making a fullyfledged nuclear breakout. And that means militarization technology from Russia. They had missile technology in the forms of fattier ones from the Chinese. And what we haven't talked about is how hypersonic glide weapons emboldened China to truly make the next step. But they gave some of that technology and they've given it to the Iranians. And their enrichment program has gone from 360% kgs at the end of the 12-day war to 460. There were hidden facilities that weren't bombed and pal and and and Trump did a peace bomb thing. And I say that you tell I really don't think he works for us. Put it that way. Every time he forces a piece, it means the enemy of the West gets a break to come back stronger. Whether it's Ukraine and Russia and Putin, whether it's Hamas, whether it's Hezbollah, or whether it's Iran, he has given the other side constant breathing room to make the next phase more brutal and challenging. And so the war we face now is a regional war to the death between Israel and Iran. And now America has sided with it. And I'm not contesting America shouldn't have done this. It's when it did it and how it did it. It should never have stopped at the 12-day point. It should have just kept on at that stage because the Iranians weren't ready to do what they're doing now. And they didn't have as many of Fattier one missiles. They emptied a lot of the midcourse interceptors like THADs. >> And just to be clear, the fattier ones are the ballistics. Is that right? The >> They're all ballistic. Anything that flies basically from Iran to Israel, apart from the 136s which are like slow cruise missiles like F1s, they're all ballistic trajectories. You see them arcing up into space and coming back. The difference is they release a a vehicle which can maneuver in from the time of release and that maneuvering makes it very hard to intercept for patriots and terminal systems like David Sling with it slammer missile and so they have to hit them at the midcourse before the bus is released. And the A3 is designed to do that with an exothermic kill vehicle and the SM3s and the THADs are they're incredibly expensive. You probably have to fire two missiles for one. cost you a million bucks to go and make a fatio one missile. It cost you 30 million bucks to intercept with two of an exothermic kill vehicle. Terrible lots. And what we noticed after the 12-day war was the magazine depth was depleted to 25% was used of American inventories. Terrifying. Still not replaced. And they must be practically empty at the rate this exchange is taking place. And that is important because a first strike by the Chinese can be negated, minimized depending on how it's structured by that technology which America is now using to defend Israel. What about the So, so okay. So, so we we we're sort of at the here and now. Um the Straits of Hormuz is closed. How do you see this playing out from here? uh you know there's a lot of hope in markets that the oil price is topping and so on and somehow the the warships are going to be there and uh the straits are going to open but it strikes me there's so much risk out there and it's so easy to >> just I don't know send a speedboat or any little sort of it's a different when when when you're when you're fighting to the death and on one side that you can change the game really can't you >> well >> how do you see it playing out >> so I think you you are asking all the right questions. So the first thing is is this is an asymmetric war but not in favor of America. It actually favors Iran. And if >> that's quite a statement that's actually a big statement. It's a big statement and let me explain why. The Houthis closed the Red Sea and they closed the Red Sea with very basic ballistic weapons with basic targeting which were the early versions that the Iranians sent over with some Chinese engineering support. And those hooties were taught by the IRGC to work out of caves to like get visual like locations of tankers and GPS signs. And they closed the Red Sea. Now, when the Red Sea was closed, what it meant was America was no longer the dominant maritime hedgemony because if you can't keep the main seaways open, you don't have maritime hedgemony. So when they finally got round to it, they sent the the Eisenhower um carrier group over, bombarded them between the end of 2023 and beginning of 2024 for five weeks. Highest tempo air delivery a carrier could give no contest, pummeled them as best they could, run out of ammunition, sailed away to go somewhere else, and the Houthis pop up and carry on. >> Now that is a really really scary sign. What it shows is that Houthis have been taught by the IRGC how to hide, how to fire, how to return to cover and they were incredibly successful. And I remember watching thinking this is a really bad sign, really bad. So what you're looking at now is not the war that Trump thinks they're fighting. And if you go to the journey of how they got to this moment, it's a number of roots. First of all, Trump and Hexath have got rid of the capable people in the in the Department of War who would stand up against their desire to destroy democracy and the republic and become an autocracy, which was a key mission they've had amongst the military. So the strong individuals who would think outside the box would speak up and say that plan isn't going to work. They filtered them out immediately because they're the first to say sorry I'm loyal to the Constitution, not you. So that thinning out is very similar to the thinning out that Stalin went through when he had his purges before the invasion by Germany in operation Barbarosa which disabled the response. Huge cell phone goal. Very similar to the French Navy that happened to kill all its officers who were aristocrats which meant that they had no officers to lead their navy to fight Nelson. Massive self goal. The next self goal is um they have a chief of staff who is a very capable air officer. Um, all air officers believe strategic bombing is a solution. And in the case of what went wrong with the Houthies, well, we just didn't bomb them enough. We didn't have a high enough tempo. This time, we'll smother them with everything we've got. We'll bomb the out of them and it'll work. Right? There wasn't any other thought that there was obviously a clearer communication where Razer came said, "I think they could close the straits." And Trump overrode said, "No, they won't." So, what was Trump's mindset? Well, we did this great raid on Venezuela and you guys are the best ever and it's going to be great. Well, there's a lot of hubris there. Hexath isn't going to count him because he's a, you know, got one brain cell between five people. Some borrows on Fridays and essentially and they're all hubistic, the worst state to be in. So, they enter into this war believing their ultimate air power would deliver it. And they thought that actually decapitation would work. And this is where Sunsu would have been very helpful. The mindset of the IGC has been to fight Israel, to destroy it and take on the great Satan. Its plan was to do it through nuclear weapons if it could. But if it couldn't, its plan was to bring America down on top of it like Iraq did and make the price so high that there's nothing they could do about it. And the Straits of Amos and the Gulf now, not just the Straits. There's a thousand ships trapped in the Gulf, all like beautiful targets for the RGC. Means it isn't just about the straits. So every bit of coastline that the Iranians have onto the Gulf, they can launch remote control speedboats like the Ukrainians do the Black Sea. They can launch 136s and they can endanger shipping. And that is a big campaign. And on the other side, um, one of the chief of defense staff resigned a week beforehand. It wasn't in the papers, but he was a very sensible, capable individual and the warning signs were there. He must have said this is not going to work. And you didn't have to be bright to realize that the real vulnerability is America wants a quick war. Trump wants a quick win. So you don't give him a wing, a quick win. You let him step in the bear trap, which is where he is right now. He can never walk away if those straits are closed because he can never say he won. And the truth of reality overcomes his and lies. And that's where he is right now. It's interesting, isn't it? Because um you don't I mean, we obviously work in markets, but it's pretty and it's pretty obvious to us, and I'm sure it's pretty obvious to the IRGC that, you know, get the stock market down 30% and the oil price up whatever the number is. And um where does that but where would that leave Trump? Because that's when he'd want to exit. Well, okay. >> And you're saying you're actually arguing the opposite that that that that that that he can't exit until the straits are almost closed. >> He tried to exit last Monday and then basically the reality of the straits being closed stopped him and they came back and said, "Well, this will stop when we say, not when you say." >> So once you lose your initiative in war, you are really on the back foot and the Americans have totally lost initiative. And >> so you so just to build on that. So, I just wanted to build on that because um I [snorts] know you've been writing about how long it takes America to prepare a um a response that will allow the straits to be open, whether that's putting boots on the ground on the on the coast or whatever. And and talk us through that because that that is that's fascinating as well because if I'm if I remember correctly, your timeline is a minimum of seven or eight weeks to completion. Is that >> three to four week? Three to four months if you're lucky. >> Three to four months if you're lucky. if you're lucky >> to fully complete the operation. So So you've got you've got weeks and weeks and weeks of oil price pain and and and potentially quite serious. >> Absolutely. Well, one of the things that's interesting is let's go back to what the wave looks like and I gave you a price of what oil looks like and that is something I've been working on for decades and following. So the first pulse was from 02 to roughly 10. Yeah, we can put the chart up in the in the edit as well. This one you >> basically the first pulse which you know is what made so much money for us in emerging was that pulse >> and then the deflationary pulse took place from 10 to 20 ending with the negative oil moment. And I argued for example that if we were going to make friends with Putin and draw him away from China, we should do it when the oil price was in that negative phase because he wasn't very emboldened and it would have worked. probably could have done. But the moment we went negative one and upwards, he was off because now he was rich again. Didn't need anyone. >> Now that same pulse is the wave one of the Cwave. >> And the whole correction we had post, you know, the peak that came from the invasion of Ukraine, that's a wave two. And so, you know, to anyone that's followed my work, I had people buying at 56 and the stop was 54 and we're still long waiting for exactly this piece of price. The worst thing about this, the C-wave of the K-wave and the third wave of the C-wave is it is the war wave. It is driven by conflict and resource constriction, not by demand. And that's exactly what this is and that's why you know I it was coming clearly coming because I understood the geopolitical dynamics in my models. >> So where's oil going to? What do you what do you think? But oil oil is going to 350 in the next four years and it's never coming back here. It's always going to be higher than it is here, >> right? >> And and and basically the way that works is that we will keep moving and we still haven't even got to the middle of the three. That's probably on the way 150 to 175. So >> So, so when you say 150 to 175, just to be clear, are you talking about the next few weeks, few months or >> Yes. Because because we're in the we're in the we're in the th. We're in it now. We'll be at we'll be at 200 within the next 3 months without doubt. >> And in a sustainable way. It's very similar to silver. Can anyone imagine silver reaching the price levels it did and sustainably? Well, it's the same issue, a same psychology of shock and how can this happen and underproduce and you got the SDR strategic reserves in the states are empty and there's, you know, there's we're not looking good to compensate for this. And I think what's very important is I don't see this as being something that sits in isolation. So at the moment we've got two big regional wars in Ukraine and in the Middle East. This war is going to carry on because let's look at what it takes to go and take the straits of Hamas. You basically you've got to demine them. And even if there's just a few mines, which I'm sure they're more than capable of delivering of their 5,000, rather rather rather crazily, the Royal Navy used to lead in mine hunting. And we've disarmed all our conventional mine hunting boats. We've taken them from the region and we are making the switch to automated mine hunting with remote systems that can sensor the floor and you send explosives or drop them off to explode them. and the Americans are in the same state and they have only three independence class ships with the conversion. Two of which are nowhere near the Gulf. They're in the other direction in Malaysia. They're just not ready to go. And even if they were, you now put your mine systems, your mind clearing systems into closed spaces and you now need force protection bubbles because of course take out the three mind clearance ships and no one. >> You're in trouble. >> They're just in trouble. So now you've got to go and put frigots and destroyers. The reason why Trump wants frigots is America doesn't have frigots. There's very high value destroyers, but it it's failed in its concenation frigot program and the editorial combat class are not considered to be well enough armed to do the job. I think they could fix that. They've got like 29 of them actually of two different designs that if they got their stuff together, but that's not today or next week. It's months ahead before you can start to put a force protection in. The reason why Trump is screaming, "Send me your ships," is because NATO navies have more frigots and less big destroyers, which are more suited to those confined waters. And the threats you face are really quite low-level threats. They're going to be things like Shia drones which you know they fly at 120 mph or they're going to be speedboats and in fact Turkey would be a great partner for this because they've got a lot of slightly older generation gunboats and corvettes that actually they could be very instrumental in that but Britain doesn't have that capability and we don't have any ships thanks to the failure of Star and the French and the Europeans are all limited and we're beginning to have to calculate what happens if America takes all its forces from Europe to fight this battle and we're exposed to Putin. So, you can see there's a strategic reluctance to to trust him or do that process, which is understandable. Um, I would do a deal with him and say, "Look, if you bring your AS-class anti-bballistic missile destroyers north because we don't have enough missile defense, we'll send our lighter armed frigot south." >> But that's if you had a reasonable conversation with the president of America. Um, so then the other thing is you've you you face, if you think how basic the Houthi operations were, they line of sight. So now you've got to take all the land around the straits and all the high ground, which is what I think the Iranians want. And then you've got to go all the way down. >> Just to be clear, I don't mean to interrupt, but just to be clear, is this why we we hear 5,000 Marines sailing towards >> Yeah. >> Is it to take the the the land, do you think? It's I'm sure they're tasked with the islands around the straits and the ark they're sending around the Tripoli is at 2,200 Marines. I mean, they're super equipped, but actually that's not enough. It's just not even close. And then you add the 82nd airbor, it's not enough close. This will draw people in like nobody's business because in effect it's a counterinsurgy operation along mountainous difficult terrain that stretches the whole coastline because as we learned from the Black Sea, you don't put your speedboat just near the ship you're going. You can drop it in 300 miles down the coast which means every bit of Iranian access to the coast becomes a problem. And on top of that, their 136s and the we had to give it to them. The Gulf did something we haven't done in Europe. They had the money to spend on thads and patriots and radars for high-end defense, which has been really cool to their credit. God, I wish we had done the same. But the Americans didn't learn the lessons from the Ukrainian fast enough of what cheap mass and cheap drones could do to you because you just get saturated. And what we really need is short range gun defenses, which you know, Rhyme Metal are making with Sky Ranger, for example. And there should be bloody thousands of them everywhere. But that technology won't arrive in time to make a difference. The Ukrainian technology is probably the best that Gulf is going to get. Golf and and Trump doesn't like it because it gives Ukraine huge leverage as an export business. But there is a simple truth. There have been revolutions in the military affairs of Ukraine's actions against the Russians and their greatest exporters that technology that we need. And the Russians tech exported their technology to the Iranians because it's clear evidence that 136s that were used had Russian like advanced systems and sensing and tactics attached to them. So how Trump can even speak to Putin knowing that's taken place shows you there's something very abnormal happens in that relationship. >> Yes. So, so this is um so really when you boil it all down and you think about the straight hall music, it's a very big western effort just to get it open again because of that threat that you described the sort of easy um asym asymmetric >> asymmetry. It's asymmetric >> as asymmetric. So, so, so, so, so, so, okay, let's, so, so what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what what what would you, what do you sense is the probability that Trump is successful in opening the straits again in two or >> within 3 months? Zero. >> Zero. Seriously. I mean, >> seriously. I mean, that's you can see it in the price of oil. This whole thing about oil predicting what's going to happen. Oil only goes up because the straights don't open. And the price bands in all are so clearly like super bullish as they are reflected in things like wheat that you know there's just so much more pain to come. >> Interesting. So the other would yeah >> the other part >> price consistent with the military assessment essentially. >> Yeah it is. And you know I'm relatively well keyed in to what is happening >> as keyed in as anyone I would probably say. Um, I think the other thing that we forget is Israel doesn't want to stop until Hezbollah is basically destroyed. So, you can expect them to go to the Latani River and beyond. So, that's going to happen. And the real issue is how do you know that the nuclear program is dead in Iran? And I'm afraid the only way the Israelis are going to feel comfortable is if they find that uranium and destroy the facilities. And to do that, they've got to create sanitized landing zones, dig them out, like get them out. And that's a big operation. The Iranians know they're coming, so there's a risk of a trap, but there's still that to come in this conflict before there's any chance of the Israelis saying, "We've met our war goals." So, this has just got too many to-dos in it for it to just end. And certainly the the whole operational tempo and advantage is with the Iranians right now, not with um America. And that also goes back to the biggest problem is that all of my work suggests that the Chinese have been preparing for a war across the Pacific, not just Taiwan, which to them is just the western gate post with Okinawa being the eastern gate post of accessing the third island chain. part of their strategy to take over the world to emulate what Japan wanted to do, consolidate it, use their ship building capability of elomerated with the Japanese and South Koreans and literally stuff the world with with warship. >> Now just that again, lots of questions, but first island chain, second island chain, third island chain, if I remember my my stuff rightly. So that's quite a way out into the Pacific. >> It's all the way to New Zealand and Australia. all the islands, you know, that were in the Pacific conflict, not including including Gu, not including Hawaii. >> I mean, I remember, you you'll you'll correct me on this, but I remember 101 15 years ago, we they had their first aircraft carrier and it had a bit like the British one didn't have anything on it for quite a while or it was a it was an old one that was refitted now. Obviously, they've moved on since. Where is their navy now? Where is their navy now? >> Their navy now is really potent. And you look at their type 55 destroyers, they're like, you know, big cruisers with more vertical launch tubes than, you know, an American destroyer. Uh they have some air defense challenges they're trying to work on. Their biggest fear is stealth, which is why, you know, they've worked on phased array technology with photon technology because that would open the stealth detection process. They're very big on quantum sensing as we are trying to do, which makes the oceans transparent. So you can see, you know, American submarines, but the biggest problem with American submarines is just not enough of them. And when they fired all their missiles, they got to go all the way back and get more and then their bases become vulnerable. So the Chinese have a very comprehensive plan and clearly they've rolled out some incredible technology, which I think has every chance of rolling the Americans back very quickly, which is my biggest concern. And they've been >> When you Yeah. When you talk about incredible technology specifically, >> well, the most powerful is their hypersonic glide weapons which are unable to intercept, but also they built a layer of drones, you know, ISR drones across the Pacific that they assume there will be no satellites. And I think their assumption is interesting because American combat power is about satellite power. And if you destroy by blowing up a satellite and creating grains of dust and you lose her orbital belts, America is blind. But China can operate under those circumstances. So there's some big they've really constantly thought about this. And more importantly, I think the state of the American and the quality of it leadership is is pretty dire as we're seeing right now. It's not the individual heroism and capability. It's their leadership tranch. And and I think Trump has really put nails in the coffin with Hexath in terms of overall capability and and thought process and strategic mindset. And the Chinese are the very opposite of that. So I think that what's happening in the straits is potentially strategically compressing to the Chinese with their energy and you know at some stage they got three and a half years of oil is my estimate. They've got that much cuz that's how long it takes to take the Third Island chain before they need to come out and get the oil resources. >> They have got a lot of oil. We've been doing those numbers. They've been building it hard, haven't they? For >> and you don't do that. You don't do that for fun. You do it because you're preparing to go to war. >> Yeah. and you know their huge amounts of stocks and their EVs and their coal weren't just random decisions. They were decisions to take that dependency away and so they make big strategic decisions for a long time. Um and then the other bit is with empty magazines for these midcourse missiles which have the ability to stop HTVs. The Americans will just rebuild those stocks if they don't take advantage of that moment. And somewhere as this conflict continues and the Iranians keep firing and it is a fascinating mystery as just like the Houthis did how the Iranians keep getting these missiles out of their tunnels and their ISR kill chains from America and and it just doesn't spot them in time and they keep doing it. So there is command and control that's evidently there. Their intelligence all comes from the Chinese satellite programs and that's real life targeting data and they are persisting in a combat mechanism that no one thought they could if they were bombed like this. So the question goes back to they're doing something we didn't expect although we should have learned it from the Houthis. This is just the biggest cockup. I mean, it was always going to be difficult. Make no mistake. But in terms of the strategy, our employment, our understanding, I mean, Starmmer's decision not to give basic rights to the Americans is probably going to be the reason why NATO breaks up. Quite simply, it go it'll go back to that you didn't give me what I wanted. And there's no way we should have stopped that because you cannot take away a base at short notice when you're about to launch an attack from say, "Nope, sorry, the law says you can't." because I would contest that the rights of preeemption over nuclear weapons are far greer than Herma and Starmmer will ever be a persuading court. >> Yeah. Yeah. Yeah. Yeah. Interesting. So, clock's ticking. Couple of couple of quick questions before we get to um a couple of what projects you're up to at the moment to conclude on. But quick questions up front. So, first question, I'm going to give you both questions. And uh first question, where does this leave Ukraine? What's going on in Iran and so on? uh how do you see that developing and then the second question is when we talk about asset prices you've told us your views on oil I can we can I think we all know what the equity view is as a result of all the above but talk to us about bonds and talk to us about gold and silver so let's do Ukraine and then and then those asset prices and >> you know for the first time I feel they have weathered such a storm since their summer offensive failed and I think as when I studied the first world war for my book Lance Led by Lans it was like a pendulum swung as you know the attacker attacked and put pressure on the defender and the defender looked like they were thinly holding and then oh the attack didn't work and the pendulum swung back because the attacker was exhausted. I think the pendulum is being firmly in the Russian camp and that's been amplified by his whole art of lying and bullshitting. But the pendulum is now back in the Ukrainian line and the Russians are under pressure. And although the or is going to refill the coffers thanks to Trump's, you know, helping his friend, the front lines are much more fragile. I do not think that there are any options that Putin has to go to Estonia or anything that engages NATO fully because NATO air power will flatten him. And so I do not see that him moving anywhere on NATO territory unless the Chinese have gone to war already and are supporting his activity. But there is a real concern as American naval power increasingly draws south to the straits and that is he might takeard which is a Norwegian island 750 mi north and bear island and say well now what are you going to do? because that is a door that allows his northern fleet to come into the North Atlantic more readily and it's a great challenge if we're pressed elsewhere for our intention and as we find with Britain when we can only put one and a half destroyers to sea and one frigot we are in the most lamentable state I mean he must laugh his head off that the greatest navy the navy in the cold war controlled those approaches is now just completely incapable through the incompetence of our leadership and Rachel from accounts who just somehow thinks the defense isn't a going to stimulate an economy to a benefit and b be good. >> So shocking. >> Next question. How do markets work? >> Yes. >> All right. So the so we've got this energy contract of cycle surge. I think it is so much more sustained and so much bigger than most people even imagine. And if I didn't have such a great like contrity of structure to follow which has just been on rails and also have it cooperated by all my studies of conflict and where the systems are and conflict dynamics I wouldn't you know imagine what's about to happen to us but it is I'm afraid and the main casualty the main driver is going to be bond markets and one of the things that's interesting is that if you go and look at the peak of 75 it was 16% CPI in states and 16% 10 years and 23% Fed funds. And you know all too well that if you look at the way we measure inflation now compared to the way we measured inflation then there's been a lot of manipulation. In fact indigenous inflation is far higher which is why we've got this terrible grumbling cost of living problem that people allude to but is way bigger than the numbers suggest. But what happened is thanks to money printing and most importantly taking all our manufacturing inflation to China is it actually ruptured the inflation cycle as it's linked to the contractive cycle. But the catchup is going to be horrendous because China won't be part of the world's trading system when conflict breaks out. Energy will be constrained and we will go through the roof and inflation will be above 20% as we match this process and it will all be a straight line. But in fact, it's just the the central bank's repression of that mechanism suddenly losing control and there've been an upward explosion in it. So bond markets are dead. They're dead for a number of reasons. They're dead because of this inflationary pulse which is unstoppable. And they're dead because if you want to rearm you need to issue bonds and essentially we are at the same jet debt to GDP ratio that America was and Britain was essentially at the end of the Second World War, not the beginning. So, how the hell we fund a 10 and 20 year war? Because one of the things that was really quite difficult when I came to terms with it is this contractive war cycle pulse can warn you it's about to start, but it doesn't time how long it takes. >> All it tells you is the gun on the fight to the death has started and their fight to death is going to carry on until only one is standing. That means it was the end of Germany, only one standing after Second World War. France was not standing anymore after the Napoleonic wars as a dominant entity of France in Europe rather. So this is a last man standing conflict. We don't get escalation. We don't get deescalation. We don't get lucky breaks. We have to expect that it just gets worse and worse as the pulse surges into 2030. No luck, no happy moment. Expect the worst. And that means that the dollar is in the bind. And I think we're in this sideways correction with say the dollar index with a little more pop to the upside. You know, maybe 101 or 102 possibly in the index before people realize that the dollarized system is buggered. And the other part of this is gold and silver, which I think looks to me like it's got a real downdraft somewhere like 44 on silver and 420 on gold. all of the people that didn't understand that you get out of the peak like that and whoever it works out you know there'll be a really nasty give back and then if you were smart which is what I recommended people do get into energy from the peak of gold and now energy is the prime driver whereas gold and silver could actually go sideways for the whole year this might be a giant multi-year triangle so it isn't as if just because it reaches 142 it's going to go straight back up again could just be the a of a triangle that goes on for a long time But energy is a hot place to be. So I switched you I've got I run this sort of thing to show people what to do. I got out of all of my gold and silver stuff for my trading accounts. I got them short within 1% of the highs. Got the main drop and now you know energy is key focus. >> Yeah. Interesting. So bullish energy, bearish pressures at least for a while bearish equities, bearish bonds. Um fantastic. Well, look, I mean Tom's March on We've covered an awful lot. It's been absolutely fascinating. Um, so just to just to say if people want to find you, um, we didn't re you we didn't really talk much about Spitfire Capital or about um, uh, David Marin.co.uk or Marin Nations and all that sort of stuff. And of course, you're also the author of several books. So perhaps if you just if where do people go if they want to find and find find more more David Murin? >> More David Min. Heaven forbid. [laughter] Uh well I started global forecaster in 2019 as you know not because I decided that actually making money wasn't going to save our society but it was all about knowledge development and knowledge sharing. So I created it's an inside out hedge fund so I have some of the greatest investors in the world who follow my work. uh and you can access that part of it which is a CIO's view as in if you what what I think you should be doing with your assets I begin to allude to and the timing of those assets when you get them on and off and attribution which is incredibly alpha positive and then there's also a piece which is um marination insights which basically all of this information the warnings have been so far ahead of what's been happening it keeps my people um not just as to what comes next but why it's coming [clears throat] and from all the things that we've talked about Whether it's cycle dynamics of conflict, whether it's empire dynamics or whether it's weapons evolutions, they all are intermixed to create a very clear multi-dommain set of predictions. And it's been incredibly good. It predicted the onset of the invasion of Ukraine 6 months before like when the week was, when the day was. The only bit I didn't predict was the 7th of October because it was a surprise. But all the other serious escalatory phases in the war with Iran, including the when they bombed, America bombed 18 hours before, it's been incredibly powerful to actually use open-source methodology to predict really what only intelligence agency should do and perhaps even don't do. So if you want to be up and ahead and understand, it is the best open source intelligence I think I've ever found. It's exceeded my expectations in terms of how it's come together and it will help you stay ahead. And terms of books, there's breaking the code of history. >> There's Lions Led by Lions, which is a First World War story, which we're going to need. It's like how you build a winning army from not having one. >> Then I wrote uh a now or never defense review, which was 2020 into the Boris government to say if you don't invest in defense, we will be at war in two years. Sadly, they didn't, and we were effectively. And then I wrote red lightning which was a warning how China wins using hypersonic weapons unless we develop the capability to stop them which we haven't. So and I'm trying to complete breaking the code of war which is basically everything we've talked about and more in one book every empire cycle analyzed that affects the modern world. All of the things we've talked about and this idea that entropy forces us to evolve. There's a whole chapter on medical evolution through war. all sorts of dimensions and very very just to end just to end this story because it's relevant for some of your people being in London. I do recommend that you all go to the British Museum and see the Samurai exhibition >> the Samurai. It's a beautiful exhibition in the British Museum of Samurai armors and history and culture. And if you're not familiar with it, it's a very sobering example of some things I've been talking about. And it was relatively isolated. And for 125 years, basically they just killed each other. They fought each other. It was just blood curdling and uh in the end a warlord called Toronaga came to be the warlord of and the controlling entity of the whole of Japan and they had 250 years of peace and so you can see the armor that they fought within this period and the swords and you can see they're not really dissimilar to medieval Europe in many ways and then you fast forward to the next big encounter and it is the major restoration in about 1860 and there they are and they really hardly evolved in 250 years of peace. Their armies have become just police forces. Their armor has hardly evolved. Whereas, you know, armor in the medieval period peaked in 1650 with beautiful plate armor with every joint covered make them like mobile tanks. Nothing like that because the impetus of evolution had changed and suddenly they met essentially European war fighting and the end of the samurai. And the example is there was Europe that carried on fighting in its evolutionary path. And there was Japan that stopped fighting and it stopped and it didn't evolve and then when the two met one system completely like was destroyed and had to follow the other system and New Japan rose. So this ample example of war and evolution is really well depicted by the Edo period. >> Wow. That is fascinating. That's a great way to end and that's a terrific example of so much of what you've been saying. So, thank you so much, David. I really appreciate your time. It's been great to catch up. >> We've been friends for a long time, Chris. So, it's been lovely to be on your show and great to see you thriving, too. >> Yeah. Thank you. Appreciate it.