James Stout

Trump will eventually back down, which will head off the worst-case scenario long-range forecasting of material shortages.

Now, the rest of you, I'm assuming, if you're listening to this podcast, you live in reality and not the distorted mirror world of the stock market.

Stock market, as I think everyone has been able to see by this point, is increasingly unmoored, if it ever was moored to begin with, from the reality of how the global economy is actually functioning.

And Trump has been able to play a game by which he,

It makes the appearance of backing down every time the stock market seems to be actually tanking.

And the markets have simply come to believe as an axiom that if they simply bet that Trump will eventually back down, it will simply happen.

No, it hasn't.

The war is continuing apace, and it seems to have no signs of slowing down.

But the markets are behaving as if they know that it's going to happen.

And this has created a kind of paradox where, on the one hand, there is us living in this world, and on the other hand, there are the markets living in a world where everything is going to be fine.

And in the world that we live in, things are not good.

But they are breaking, I think, more slowly than people tended to expect.

Now, part of this, and we will go over this in this episode, is that the impacts of this have been worst felt, obviously, in Iran itself and then across Southeast Asia.

which are markets and economies that are incredibly reliant on not just oil, but things like naphtha and also fertilizers that pass through the Strait of Hormuz.

But if the markets are Wile E. Coyote hovering in the air through the sheer power of not looking down, the rest of the economy is a kind of slow-moving train wreck.

It isn't collapsing all at once, but the more you poke through and the more you go past the first page of the newspaper and start looking at the later ones and the more that you look at the press in other countries, the more you begin to realize that things are going quite, quite badly.

Now, in the West, the sign of this has been $5 a gallon gasoline in vast portions of the United States.

We are quite frankly seeing the better side of it.

There have been widespread shutdowns of transportation across South and East Asia.

Buses simply aren't running both public and private.