The great debasement

It was happening anyway, but the attack on Iran has brought forward the collapse of the fiat currency system. The key to watch is bond yields of highly indebted G6 nations.

Introduction

You can see that despite the propaganda and groupthink at the heart of his cabal, President Trump is now panicking. The closure of Hormuz prompts him to put boots on the ground and a plea to America’s allies to add their navies to a protection force in the Straits of Hormuz. For whatever reason, Iran’s threats to close Hormuz were not taken seriously by the Trump administration, and now that the rising price of oil threatens western capital markets it is badly rattled.

There’s no doubt that the war is not going to Trump’s plan, if there ever was a credible one. But it is not the focus of this article to examine why, other than to observe that far from collapsing Iran is no pushover. Therefore, our assumption must be that it is going to get messier, and that the absence of insurance cover for shipping means that Hormuz will be a no-go area for the foreseeable future. That being the case, oil prices will continue to rise as the situation escalates, and essential ship bunkers for global logistics will remain locked in the Gulf.

Even food production depends on oil

Additionally, one-third of the world’s nitrogen, the essential feedstock for fertiliser and a further million tonnes of fertiliser will be denied to the northern hemisphere at the start of its growing season. Phosphate production will be restricted as 50% of the world’s sulphur is no longer available. It’s not just oil prices which matter, but the supply and future prices of all downstream products from the refining process.

There can be no doubt as to what all G7 governments will do over the course of 2026