Rinear thinks things look pretty bleak. Fourth Turnings are a real thing. They result in worldwide upheaval. As much as I don't trust US Treasuries the best place over the next several months might just be in short term Treasury paper.
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Financial Intelligence Report
The Newsletter for people willing to take control of their financial future
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Greetings Friends!
This is today's issue of the Financial Intelligence Report
Contributing Editors: Bob Rinear, Chuck and the Crew!
Wall Street Lunacy donated by Jerome Powell, and Central Bankers the world over! Who else can print money and buy stocks?!
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Part 1: General Commentary
Part 2: Market Commentary
Aftermath
I fought with myself over the title of this letter. Fog of war, or aftermath? I went with aftermath. Why? Because Wars are where truths go to die. You can go on "X" and see elaborate video's of this blowing up and that blowing up. Except, 80% of them are AI. Didn't happen. Fake news.
It's very hard to get honest reliable info about what exactly is going on over there. Yes, no doubt, we get some good reports. But not nearly enough to make full assumptions. The public has never and will never be told the reason why we're even in this war. Trust me, it was never about Iran building a nuke. That's the sales pitch.
Yes there's a month long war still ongoing. Yes it's widening with more participants. Houthis are in. Yemen is in. Saudi says they're linking up with US/Israel. This is spiraling folks.
But since we have no clear picture of the day to day activities besides the slop both sides feed us, I don't see much point in discussing the military moves. Instead, we need to consider the effects. The Aftermath.
With oil, there's a handful of chokepoints. Everyone and his brother now knows "the strait of Hormus." What they don't know is there's another strait that goes up to the red sea and ultimately the Suez canal.
The Hormus is effectively shut. We've discussed how that's taking 20 million barrels a day off line. Well...
The Houthis entering means the Bab al-Mandab Strait is next.
Let that sink in.
Hormuz = 20% of global crude oil — ALREADY BLOCKED for 28 days
Bab al-Mandab = 12% of global trade — about to be TARGETED
Combined dual-chokepoint scenario = 28% of seaborne oil OFFLINE simultaneously
This has NEVER happened in recorded modern history
Oil is up 60%. And now a fifth faction just entered the war
The "Gate of Tears" isn't just a shipping lane. Every ship going from the Red Sea to the Suez Canal must pass through it. If the Houthis close it — Europe's cheapest oil supply route is GONE.
But as the TV commercials always say "but wait! There's more!"
RUSSIAN BALTIC PORTS:
Ukrainian drone strikes hitting export terminals
Russia warning buyers of "force majeure" — they legally CANNOT deliver
40% of Russia's oil export capacity about to HALT
Russia halts all shipments of gasoline on April 1
We've got 3 massive chokepoints, being choked. The fall out is enormous already. Iran controls the Strait of Hormuz and is already reshaping global oil flows on its terms.
Thirty-five percent of the world’s fertilizer supply is now offline right at planting season. Helium shortages will cripple chip production while sulfuric acid disruptions ripple through industry. Shortages and skyrocketing prices are locked in for the year at least and that's if it all stopped today!
Which means large parts of the world are about to see "energy Lockdowns" People are going to be told to reduce energy consumption via any means possible.
The IEA is suggesting this to Governments:
Work from home where possible—Displaces oil use from commuting.
Reduce highway speed limits by at least 10 km/h—lowers fuel use for cars and trucks.
Encourage public transport—shifts demand from private cars to buses and trains.
Alternate private car access in large cities—number-plate rotation reduces congestion.
Increase car sharing and adopt efficient driving—higher occupancy cuts fuel use.
Efficient driving for commercial vehicles—better practices and maintenance cut diesel use.
Divert LPG use from transport—Preserves LPG for cooking and essential needs.
Avoid air travel where alternatives exist—reduces pressure on jet fuel markets.
Switch to other modern cooking solutions—electric cooking reduces LPG reliance.
Leverage flexibility with petrochemical feedstocks—industry can free up LPG for essential uses.
But unfortunately that's 1) not going to solve anything and 2) just the tip of the iceberg. That's just lip glossing the pig. When those measures are found lacking, things will get dystopian.
Philippines declared a national emergency.
Bangladesh has 3 weeks of fuel left.
South Korea is telling citizens to take shorter showers and stop charging their phones at night.
The IEA just called this the worst energy crisis in history.
WORSE than 1973. WORSE than 1979. Both combined.
The evidence is overwhelming. In India there's video's of literally thousands of people lined up on their motor bikes to try and get a liter of gas. 40% of fuel stations in Laos shut down. Australia is desperate to plant their winter crops of wheat, barley, etc, but there's no diesel for their tractors. The planting might not happen.
And, if they do, there's no fertilizer for crop yield.
Here's my point to all of this folks. Everyone's focused on oil, but mainly because they think about cars, trucks and tractors. While oil is the lynchpin, the "problem" hits virtually every single industry on the planet.
Here in the US, we're going to fare better than Asia and Europe. We do have oil and natgas. But the "things' we buy on a daily basis are most often made...where? Asia. China. If a shipping company can't get tens of thousands of gallons of diesel, they can't ship products. Supply chains are going to break down much harder than during Covid.
Then we can't dismiss the idea that some foul play takes place here in the States. Yes there's some things that look shady. Why did a gigantic egg farm burn to the ground in Iowa? Why is the biggest wildfire in Nebraska's history hit now? Why did the Valero oil refinery have an explosion? Why did the power go out for millions in California? Who called in the bomb threat at another Texas refinery? All coincidence?
Folks, the bottom line here is that food is going to get scarce for billions of people. Prices can NOT not go up. Lack of fertilizer hits hard, Diesel fuel over 5 bucks hits hard. It has to get priced into the product.
Product availability from overseas is going to be drawn down. Shipping prices will double or triple. This war is way over there but it's going to impact you here.
We are going to see a global recession. Coupled with the inherent inflation that rising oil brings, the world is indeed facing big issues. We will not be immune.
This is getting long, let's talk strategy on Wednesday.
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