We know what’s coming and we are prepared.
🇺🇸🇮🇷🏦 - Iran is attacking the funding source of the US empire… the bond market
Their plan is quite simple: create a massive supply shortage, which will increase inflation and, as a result, drive surging interest rates that crash the US economy.
The US went into the war in pretty bad shape:
- Debt-to-GDP of over 120%
- Deficits of 6% of GDP
- Rising unemployment
But 1 month of Hormuz being closed made it worse:
- 10-year yield is up ~0.5%
- US endured the weakest Treasury auction in over 3 years
- With ~60% of auctions having a higher than expected yield
For every 1% increase in interest rates, interest expenses surge by ~$310B annually. And because the US government is mainly financed on the short end, interest rate increases directly translate into higher deficits.
Trump can declare victory as often as he wants, but if Hormuz remains closed, bond yields will spike and crush the US economy… dealing a devastating blow to an already declining empire.
🔗 Lukas Ekwueme
@CIG_telegram
Intellectual masking is the deliberate regulation of how much of your knowledge, reasoning, and analytical ability you reveal so that others form a controlled (and often incomplete) assessment of your capabilities.
Its purpose is to manage perception, reduce unnecessary attention, encourage others to reveal more information, and preserve strategic advantage until demonstrating full competence serves your objective.
🛢 We Are 'Still' Going Full Speed Into The Wall
Product storage is about to get tighter unless China steps in and lifts the product export ban. If it does, expect a meaningful reversal in crude.
WTI is barely hanging on to $70 for its dear life, but please remember that consumers use petroleum products like gasoline and diesel; they don’t use crude oil. Refineries do, and this is why it was always important for us to pay attention to crack spreads along with crude timespreads.
Note: Please divide it by 3.
The fever in the market today is that crude is oversupplied, but products are undersupplied. How can this be possible?
Well, China’s June crude import data so far is -4.7 million b/d y-o-y, and teapot refineries are operating at 50% utilization. Compared to US refineries operating at 95% and PADD 2 refineries operating over 100%, you can see where the disconnect is.
But here’s the thing. If end-user demand isn’t down and you still have a production shut-in of ~8 million...
