May 1, 2026
Everything runs on oil. It is the most important resource in existence, and when the price moves up, it puts a heavy constriction on the entire global economy. We have to watch the thresholds. Once oil climbs above $80 a barrel, the gears of the economy begin to grind. At $90 or $100, we are firmly in recession territory. If it ever sustained a move toward $150, the pressure would be too much and economies would simply fail. We are currently seeing WTI and Brent hovering in that danger zone, yet many people act as if everything is fine. It is like a balloon sitting in the corner of a room: it looks perfectly stable until a gentle breeze pops it in the middle of the night, startling everyone.
Geopolitically, the situation with Iran is a powder keg that could spiral out of control. The United States insists on a no nuclear Iran, but the Iranians see the writing on the wall. They have watched the history of the last few decades where seven countries were dismantled one by one. To them, nuclear capability is a deterrent, not just a matter of enrichment percentages. They are being forced into a corner because their economy relies almost entirely on oil. If they cannot move product in and out of their borders, the internal pain becomes unbearable for the average person. We see a small attempt at relief with the revival of the Keystone XL pipeline segments to bring Canadian oil into the US. Canada has the fourth largest reserves in the world, mostly sitting unused. While this creates jobs and helps refining capacity, it is a rare positive move in a sea of geopolitical instability.
Historical Context: During the 1970s oil shocks, the sudden doubling of energy prices led to a decade of "stagflation," proving that energy costs are the primary driver of systemic economic shifts.
While the average person is struggling with the price of gasoline and basic necessities, the people at the top are doing better than ever. The S&P 500 continues to hit record highs, with analysts calling for 7,000, 10,000, or even 20,000. The market has become completely detached from the reality on the ground. Much of this is being driven by the hype surrounding artificial intelligence. The United States has been the biggest beneficiary of this trend, but we have to look at the source. Some of the best AI models and engineering are actually coming out of China. Even within American companies, the talent pool is heavily international.
We are building massive data centers and the HVAC systems required to cool them, but building infrastructure for machines is not the same as building an economy for people. To have true, sustainable growth, you need a sense of abundance similar to the post-World War II era. We do not have that today. Instead, we have a bifurcated economy where the stock market reflects liquidity and central bank intervention rather than actual economic health. The engine of growth is missing. You cannot grow an economy simply by building warehouses for servers while the middle class is hollowed out. This is an artificial environment supported by high level manipulation and a desperate search for the next big narrative to keep the bubble from popping. The 1% are benefiting from the asset inflation while the 99% are left with the bill.
Data Point: The top 10% of Americans now hold approximately 93% of the total value of US stocks, the highest level on record, illustrating the extreme concentration of wealth during this "bull market."
The labor market is not what the official headlines suggest. Companies are aggressively cost-cutting to keep their stock prices elevated. We see major service providers like Rogers firing half of their staff, roughly 10,000 people, to outsource and increase efficiency. This is the new corporate playbook: fire the staff, make the remaining employees work twice as hard, and use the savings to pump the share price. If you do not like it, there is the door. Meanwhile, the Federal Reserve is preparing for a leadership change. Jerome Powell is on his way out, and Kevin Warsh is stepping in. It is a case of "meet the new boss, same as the old boss."
They talk about being tough and reducing the balance sheet, but we have heard this story before. Janet Yellen once told us that shrinking the balance sheet would be like watching paint drying. It turned out to be anything but. The market cannot handle the withdrawal of liquidity. We are currently facing a trifecta of inflationary pressures: geopolitical chaos in oil producing regions, a weak economy that requires constant stimulus, and the fact that they are already printing $40 billion a month. This is the reality of the monetary system. You have to follow the money and understand that the system is designed to inflate. Do not get distracted by outdated trading courses or university programs that only enrich the creators. You need real data and a foundational understanding of how to build your own sources of income. The world is changing rapidly, and if you are not taking action every day, you are falling behind.
Data Point: Recent reports show that interest payments on US debt have now exceeded $1 trillion annually, creating a feedback loop that necessitates more money printing to service the obligations.