So, the United States went to war in the Middle East to protect what's called the petro dollar system, the most powerful system on earth. And there's a theory that says the US may have accidentally or intentionally started the process of destroying it. We are facing a real uh shock that is probably beyond what we can imagine at the moment. And what we're seeing is what some people are calling the end of PAX Americana. History in the future will look back at the year 2026 and mark it as the beginning of the end of Pax Americana. No matter how you define Pax Americana, Pax Americana is coming to an end. Okay. So right now there is six countries in the middle of

this chess match over basically the thing that runs the entire world which is energy. And depending on how the next few weeks play out, we could be looking at a couple different outcomes. And before I explain what they are, I just want to set the stage for what's happening. Because the reason all of this is pretty bad is because it's happening at the worst possible time. Because interest rates, for example, have been high for longer than most people have expected. And that's been breaking things in the economy. For example, there's a $9.4 trillion shadow banking system called private credit. Companies like Blackstone, Apollo, Blue Owl, all of which lent money to businesses and pension funds and everyday retirement accounts. And now

investors want their money back and the system can't return it. which is also why those private credit stocks which are also some of the biggest financial institutions in the world are collapsing in terms of their share price. That's problem number one. Problem number two are jobs and AI. According to Jerome Powell, we are now at net zero job creation for the last year. Effectively, there's zero net job creation in the private sector. This is not good. Companies are basically using AI as an excuse to lay off thousands and thousands of workers or just not hire anyone at all. Problem number three, the national debt. The

government is spending way more money than it's making, especially now with what's going on in the Middle East. What's clear is that our uh debt is growing much faster. The federal government debt is growing substantially faster than our economy. It will not end well if we don't do something fairly soon. Problem number four is what's happening to long-term bond rates which are going up which means interest rates and therefore the cost of borrowing money may go up as well and that's not good. Problem number five is the war in Iran which might be the match that sort of sets off the economy if it doesn't end soon. That is the world right now.

Having said all that, let me explain the game that I think is being played, how this affects investors and the stock market, and the three possible outcomes that I think could potentially happen, and what I'm personally doing with my own investments. So, with that said, let's get into it. Hi, my name is Andre Jick. Hope you're doing well. Come for the finance and stay for the simulation. There's a lot to get through, so let's do a quick refresh of who the players are and what they want. So player number one is the United States. What does it want? It wants to preserve what people call the global hedgeimon status, right?

In other words, it wants to stay on top and to keep oil priced in dollars all around the world. It wants to keep the world borrowing in those dollars and putting those profits into US treasuries, aka the bond market. It wants to keep the same military and financial dominance basically had since 1945. Player number two is China and it wants the opposite, right? It wants to dethrone the dollar. It wants control over cheap energy for its economy and it wants to become the price setter for global commodities without getting involved in any wars. Right? It wants to do that without fighting anyone. Player number three is Russia. Russia has oil.

It has weapons. It has commodities. It is looking for allies willing to pay in something other than a currency that can be frozen, like what happened to them in 2022. Right now, Russia is arguably one of the biggest winners from what's happening in the world today. And they're helping Iran put pressure on the West, and they're expanding their sphere of influence by helping other nations build out their infrastructure. Player number four is Iran. What do they want? They want to survive. just long enough. Now, I'm not a military strategist or an economist for that matter, but there's a lot of talk about asymmetric warfare, which is where Iran is spending a lot less money to defend the strait using

cheaper drones versus the very expensive missiles that take a long time to manufacture. Now, I can't really comment on any of that, but the truth is Iran does not have to win the military war. They just have to pressure the global economy long enough for the world to say, "Okay, our wallets are starting to hurt. Please stop." Right? Which is also why every single day we are seeing conflicting data. Trump says, "We're negotiating peace." Then he says, "Okay, just kidding." Then he says, "Okay, we're still fighting." And Iran's like, "No one's negotiating anything." Right now, because of this conflicting information, the market and oil is crazy

volatile right now. And this could be very intentional because it is very profitable for those who can be on the right side of volatility if they have the right information. And a great example of this is a $1.5 billion futures contract that was placed a few minutes before Trump announced a peace negotiation. Right? Once it was announced, the value of that trade went way up and whoever that person was made over $60 million in less than 20 minutes. That's pretty crazy. Now, whether the war continues or stops, every day that straight is closed, the global economy suffers, which gives Iran a strategic leverage point over US interests. By the way, the most important chart you're going to see right now is this one, which shows total transit tanker calls. And as long as

this chart is down, the market will continue to be extremely volatile. Iran also wants a security guarantee that it won't be attacked again. It wants the US military out of its backyard. It wants to be repaid for all of the damages done so far. Okay, so that's Iran. Power player number five is the GCC, which is a group of countries that includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The Gulf States want stability and protection, but they're also hedging between the old system, aka the petro dollar, and what could be the new system. Now, arguably the last player of this game is us, right? our 401ks, our gas prices, our jobs, food, our savings, all of that is sort of in the middle of this crazy

chess game. So those are the players. And now let me tell you what the game is. So here's what the game is. The game is about control. And in order to get control, you need control over two things, which is oil and gold. And there's an interesting theory about what Iran, Russia, and China are doing right now. The theory says they figured out that they don't need to fight the petro dollar, right? They just need to build an alternative system. And each one of these countries has a part of the missing puzzle, if you will. For example, Iran has the choke point. It controls a straight of Hermuz of which 20% of the world's oil flows through every day. And every day that the straight is closed, the global economy

gets a little bit more desperate. And Iran is using that leverage to make an offer to the world. Their offer is this. Hey guys, this rate is actually open. You can pay for your oil in Chinese yuan and then we'll let your ships through safely. Now, Russia has the alternative supply. Every Asian country that's running out of Middle Eastern oil has one alternative seller that is willing to do business right now, which is Russia. And Russia is offering that energy in yuan or rubles. Japan just called Russian oil extremely important for energy security. South Korea is considering importing Russian oil as well. Even the United States is backing

off the sanctions on Russian oil, which tells us how desperate the situation actually is getting. And of course, China has the payment rails. Now, what's interesting is that the yuan is not actually freely traded. Like, you can't just go buy it on an exchange right now like dollars or euros. The only practical way to get yuan is to sell something China wants. And historically, what China's always been willing to accept is gold. So the actual transaction looks something like this. You sell your dollars, you buy your gold, you sell that gold to China in exchange for yuan, you take that yuan to Iran, and then you buy the oil, and your ship gets home safely, right? So, China now gets to sort of be right in the

middle of this transaction. It gets to decide the exchange rate between gold and oil, which means China's deciding what the dollar is worth relative to everything else. Okay, what is the evidence of this? Then we can look at something like Swiss gold exports to Saudi Arabia. Starting in 2022, which was when the US froze Russia's dollar reserves, Saudi Arabia started buying gold at a much faster rate through Switzerland. Here's a chart you can see. Now, look at Chinese exports to Saudi Arabia over the same time period. Right. Saudi Arabia is buying Chinese goods and gold while selling oil. This next chart shows Swiss gold exports broken down by destination. Look at the Gulf countries

category. That's the whole GCC region. It goes up starting in 2022. Again, the same year, every single Gulf country watched the US freeze Russia's dollar reserves and thought, well, hey, if they can do this to Russia, they can do it to us, right? And Switzerland is how they're moving it, using something like an offshore yuan clearing bank account, meaning you can swap gold for yuan there without ever touching the US financial system. And it's not just the GCC. For three of the last four months, the biggest thing the United States was shipping out of the country by dollar value was gold. Specifically, what's called non-monetary gold. That means physical gold, actual bullion, coins, and things like that. The Wall Street

Journal reported on this as well, which means the US is already settling a portion of its own trade deficit in gold. And Iran has created a toll booth for the whole world. And the toll booth has to be paid in yuan, which is paid in gold. Now, there is a problem though. The oil market makes about $4.1 trillion worth of oil every year. It's a lot. And the entire gold market makes only about $485 billion, which means the oil market is roughly nine times bigger than gold. So even if a fraction of global oil starts getting settled through gold as the conversion layer, the demand shock to gold could be unlike anything the market's ever seen cuz the gold market is just too small to absorb oil without

the price moving in a very big way. That's speculative, but that's one theory. And that's why some people believe that gold could ultimately go much higher in the long term. So that is the game. Okay. So, while all of this is happening, we're also experiencing pain in the bond market and the stock market. But let me try to make sense of the bond market first. Why is the bond market so important? It's important because the bond market decides what our borrowing costs are going to be in the future. So, at the start of 2026, there was basically one thing that almost every major bank and hedge fund agreed on. Interest rates were going to come down, right? The Federal Reserve was going to cut rates,

borrowing was going to get cheaper, and the economy was going to get a soft landing, and stocks were going to keep going up. That was the narrative. JP Morgan said it, Goldman said it, everyone was. But what ended up happening was the opposite. Long-term bond rates have started going up. And in just a few weeks since the Iran War started, the 10-year US Treasury yield has gone up significantly. By the way, I bring up the 10-year Treasury bond because that bond is arguably the most important one to look at when trying to understand what's happening to interest rates. So, basically, right now, interest rates on long-term bonds are going up, and that is bad. Why is it bad? Well, it's bad because the US

government is now paying a lot more to borrow money than it was a couple weeks ago. And it's happening at the worst possible time because here's how bad the US financial situation is right now. This graph tracks what's called true interest expense. It's a way of measuring how much of the government's tax revenue is already spoken for before it funds roads and schools and things like that. This number combines social security, Medicare, health spending, and interest on the debt. Right now in February 2026, true interest expense was 48 billion. That's what the US has spent. What the US made, aka the total tax receipts that same month was 313

billion. That means the government's basic obligations already exceed everything it's made in taxes by about 30%. By the way, this was before the war, before the Pentagon was like, "Uh, we may need $200 more billion dollars, please." And also before Trump asked for a $1.5 trillion military budget. Now, all of this sort of breaks the expectation of the bond market because here's how bond investors see this situation. They're like, "So, you're spending way more money than you're making. You are invading a country that might affect global supply chains, which affects food and energy for the entire world and has a cascade effect on everything. And you want me to lend you my money. Well, okay. If I'm going to

lend you money and buy your bonds while the world's on fire, I'm going to need you to pay me more money. In fact, because of what's happening in Iran, I might need to sell some of my bond holdings to pay for my food and gas. So, if you want my money, you're going to have to pay me more. That's what's happening right now in the bond market, which is also why 10-year term premiums, which measure how much extra compensation investors want for the risk of holding long-term bonds, are also going way, way up. This is not just in the US. In the UK, the 2-year yield just made, the biggest move since October 2022. You might remember it was called the Liz Trust moment. That's when the UK prime minister announced a budget that

scared bond markets so bad that the Bank of England had to get involved to prevent a complete collapse of the UK pension system. Right? So UK yields are now up a lot in just a couple weeks. Now why this matters to the US though is because European and UK investors own about 40% of all US treasuries held outside the United States. and Europe and the UK are hurting for energy. Which means when their bond markets crack under the potential pressure of an oil shock and rising inflation and their need for food and energy, those investors have to sell something to pay for it, their US treasuries, so they can get the cash to pay for all those necessities, right? And that does what?

It pushes US yields higher. The UK's bond problem then becomes a US bond problem. We saw this happen in 2022 and it's kind of happening again right now. That is just the bond market. Well, then there's the stock market side of it. And here's how bonds sort of play into the stock market. When long-term bond rates go up, maybe because nations are selling their treasuries, stock valuations tend to compress. The overly simplified logic for this is if you can get a guaranteed four or 5% return from a government bond completely risk-free, right? Then why would you take the risk of owning stocks unless you were offered something better? Most people probably wouldn't, especially in a time when AI and robots

are expected to take people's jobs, in a time when private credit companies are under stress. So if you have money, then why risk it in the market? That's the overly simplified logic. So capital starts rotating, meaning money moves out of stocks and into things like bonds into commodities. Now, here's something really interesting to look at. This right here is a graph showing US job openings versus the stock market, aka the S&P 500, going back to the year 2000. So, for 25 years, these two lines have moved together almost perfectly. And it shows that when people have jobs, stocks usually tend to go up. When jobs dry up, stocks tend to go down. Makes perfect sense. More jobs means more

spending means more corporate profits. But what's happening right now is the opposite. Job openings are collapsing, but the S&P 500 is still going way up. The market is now completely disconnected from the job market. Why? Well, because right now the market is betting that AI will increase corporate profits even if it gets rid of the jobs that created those profits. It's essentially betting that companies will continue to get richer even if their customers get poorer. Now, at some point, I think these two lines will have to reconnect. And it's going to happen one of two ways. Either AI will be so

productive and gets us so many more jobs that it boosts the jobs line, which is basically the optimistic scenario, right? or AI is so productive that we won't need the human jobs. So, the lack of jobs drags the stock market line down to it. Either way, I think those lines will reconnect at some point, but no one knows which way it's going to go. But over the past 20 years, every single time, credit spreads blew out, meaning the cost of borrowing for companies went up. While the S&P 500 was still near its high and hadn't even corrected yet, a bare market followed every single time, three for three. And right now, credit spreads are blowing out while the S&P is still only in a minor pullback

territory. The bond market is pricing in pain. The jobs market is also pricing in the same. And so, the Federal Reserve is essentially trapped if oil goes up. They're getting checkmated. Remember, their job is to do two things. keep inflation low and keep unemployment low. Normally, when a recession hits, they can just cut interest rates, which all this free money goes into the economy, companies start borrowing and hiring again. But if inflation is being driven by an oil shock, if the Fed cuts rates to protect the economy and jobs, oil could make inflation worse. And if they raise rates to fight inflation, they

accelerate the collapse of a very stressed bond market and tip the economy into a recession or even something worse like stagflation. So based on everything that's happening, there's three possible outcomes, three theories as to how all of this could potentially end. So outcome number one is the best outcome and it says the war ends right away and Iran gets some version of what it wants which is a security guarantee no US military presence and maybe some kind of a negotiated settlement. So the straight of Hormuz opens up within the next few weeks and if that happens oil prices come back down inflation does not become a thing. The Fed gets room to cut rates and the stock market goes up and everybody's happy. JD Vance probably comes in and saves the day and

negotiates it with Iran and his presidency is saved in 2028. Whatever the narrative is going to be. That is the best case scenario. But even in this outcome, the risk is that the world that comes out of the other side of this is not going to be the same world we're used to. Right? Because the pro gold proouan system that Iran, Russia, and China have been building is not going to automatically go away. Saudi Arabia is not going to stop buying its gold through Switzerland. Russia is not going to stop selling oil and yuan and this multipolar world is going to accelerate. The dollar of course survives, but it could be potentially weaker than it used to be. That's outcome number one.

Outcome number two, the war keeps going. Hermuse stays closed for another 3 to 4 weeks and that is roughly the point where economists say things start to break and they're very hard to reverse and they take a very long time to rebuild. We could see bond markets in the UK and Europe start to crack. Foreign holders of US treasuries are going to have to start selling their treasuries to pay for their energy and food. And that makes US treasury yields or interest rates go up. So the stock market finally catches up to what the bond market's been saying. Credit spreads blow out, corporate earnings get slashed, and you get a credit crisis that some people compare to 2008, right?

job layoffs and all assets go down. There's very little places to go to protect yourself financially except maybe other than things like cash in the short term and gold in the midterm. But it's really hard to say. That's outcome number two. Outcome number three, the war drags on even longer. Long enough that bond markets start to break, right? Meaning yields or interest rates go up so fast the US government literally cannot afford to keep borrowing at those rates. And at that point, the Federal Reserve and the Treasury step in because they face a choice. Either let the bond market collapse, which takes the entire Western financial system with it, which of course they will not let happen. So

instead, they'll pick option two, and that's what people are calling the big print or yield curve control. That's when the Fed injects liquidity into the system into an oil spike, which has never been done before in modern history. Every other time the Fed printed money, oil was cheap or going down. And what we know is that printing money with cheap oil just inflates asset prices. Printing money with expensive oil inflates everything, food, energy, rent, and every input cost in the economy. And if people can't afford to buy the basic things, that's not good for stocks. That scenario turns into what some economists call a hyperinflationary sovereign debt crisis and stagflation. In this scenario, everything gets hurt

except for again potentially cash and gold and maybe Bitcoin, but none of that is guaranteed. That's arguably the worst possible outcome and hopefully it doesn't happen. Now, there is technically a fourth option which I talk about in another video where the government controls inflation using gold. They do that by repricing gold much higher. It's basically an escape valve to control the price of oil. But you can watch that video somewhere up here. Now, if you made it this far, here's what I'm doing with my own investments. But please keep in mind that this is just based on my circumstance and my risk tolerance and my net worth. All of which may be drastically different than someone else's situation. Personally though, I have rotated a lot of my portfolio into

cash and short-term treasury bonds. Now, I still have my dividend portfolio, but as of right now, I'm cautious about the S&P and my cash position is probably around 40% of my net worth. I did this rotation a couple weeks ago, right at the start of the conflict, because I didn't really like what I was seeing. Now, the market could very well go up significantly from here once the market is fully convinced that the Iran war is over. As of right now, I don't think the market is buying it. But if it happens, if the war ends, I'm okay with missing some of those gains. But that's just me. I have somewhat of a pessimistic view on the market as of right now, which could totally change. But I would not be

surprised if in the next 5 to 10 years, let's say, we see a huge capital rotation from stocks to commodities like silver, gold, and physical assets. Now, that may not be right now, but there have been moments throughout US history when commodities have outperformed stocks and vice versa. And I think it's really important to pay attention to this sort of rotation. Now, gold has arguably already been in this cycle for a while now, especially when measured against the S&P. Unfortunately, I don't really have any meaningful amount of gold or silver, but I hope that'll change in the future if I get an opportunity to buy some. But for now, I'm playing it safer than I was before.

I've also got rid of my debt. I don't want to have any debt. No credit card debt, no mortgage debt, which is also why I sold my rental a while ago, arguably at the peak of the market. I also have my Bitcoin and I bought more when it dipped to the mid60s. I'll be buying more below the 60s if it gets there. And I'm also stocking up on some extra supplies around the house because I would rather have them and not need them than the other way around because I don't know how bad supply chain issues could get. They may not, but I would rather be prepared and ready no matter what happens. That's just me personally, but I highly encourage you to please do your own research. You can also find my

portfolio and track your own investments at funvest.com. And if you're interested, Wee Bowl is running a promotion where if you fund your account, you can walk away with a free $60 cash bonus. If you bring over 100K, that jumps to a 4% match, so $4,000 free on 100K. They'll also cover up to $100 in transfer fees. And the nice thing is Weeull is SIPC insured, so your investments are protected up to half a million. I've been with Weeull for over 6 years now. Their offer ends March 31st. Link is in the description as well. But in the meantime, I'd love to hear your thoughts and theories and what you're personally doing to prepare. But as always, I hope you have a wonderful rest of your day. Smash the like button,

subscribe if you haven't already. I'd love to see you back here next week. I'll see you soon. Bye-bye.