Explains his research methodology: reads voraciously for facts, context, and sentiment. Looks for situations where sentiment is one-way but facts are starting to go the other way. Interested when 'hard limits' are hit, like interest expense nearing 100% of government receipts.

Jim Grant: 'Successful investing is having everyone agree with you later.' Jeff Bezos: 'When the data and the anecdotes disagree, the anecdotes are usually right.'

On global recession: War is stimulative and inflationary, but a supply chain crisis starting in Southeast Asia, Australia, EU, UK could quickly take down US and Chinese economies.

Draws parallel to 1997-98 Southeast Asia crisis which led to a US industrial recession and LTCM collapse, but notes today's debt-to-GDP is much higher (122% vs ~50%), which 'shortens the fuse.'

Positioning: 'Happy as a clam sitting heavily in cash and gold bullion, T-bills.' Sees the fuse as lit due to Iran/Hormuz being existential for US, Israel, Iran, Russia, China.

Russia and China have an industrial base 4-10x bigger than the US and are supplying Iran.

On supply chains: We are getting 'really close' to the point of no return. Once they start breaking, it's 'break, break, collapse' due to globalization and just-in-time inventory.

Cites discount airlines canceling flights and talking about fuel shortages by May/June as early signs.

On timing a market 'whoosh down': Not trying to be cute with timing. Sentiment is 'astonishingly complacent' about supply chain risks and the non-linearity of those risks.

Says he gets lectured on X about how 'we're winning' and 'stocks are going to the moon.'

Expects pronounced supply chain announcements in 'two, three weeks, maybe four weeks, maybe five weeks' if the conflict keeps up.

Factors for a 'whoosh down': 1) Supply chain breakdown, 2) Foreign economies unwinding the US net international investment position (selling stocks/treasuries), 3) Foreign sovereign debt issues (Japan will sell US assets), 4) AI disruption of white-collar jobs.

Notes Japan's central bank sold Treasuries aggressively in March. Says markets have 'completely forgotten about the whole AI thing' since February.

On gold miners: Still likes them, not adding or selling. They trade with the gold-to-oil ratio. Expects the gold-to-oil ratio to finish the cycle 'way, way higher' (over 100, 200, maybe 400 barrels/ounce) and oil to go 'a lot below 60'.

Expects near-term volatility in the ratio due to oil war and gold volatility.

Timeframe for 'whoosh down': 'I think it's coming in 2Q26' if Hormuz stays closed.

Will deploy >50% cash position based on price and time, looking at industrial equities, electrical infrastructure equities, and Bitcoin.

How he could be wrong: Geopolitical coups in Russia/China that lead to cheap asset sales to US interests, or a new technology that gives the US leverage without causing unemployment that blows up the debt.

Critical context: With sovereign debt this high, 'there is really no margin for error.'

On gold trading like a risk asset: It sold off initially as a 'rainy day asset' used as collateral. The ceasefire rally was interpreted as a potential 'US Suez moment' pointing to a multi-currency energy pricing system with gold settlement (good for gold, stocks, bonds; bad for dollar).

If Hormuz stays closed another 2-3 weeks, paper assets will have credit/inflation risk, and people will seek assets with 'no counterparty risk' like gold.