The next few months are going to get interesting as markets react to the ongoing mess that is the Gulf, rising oil prices, wobbling stocks, rising bond yields, broken supply chains, and the reassessment of the AI “revolution”. Meanwhile, the US political cycle goes into the Mid-Terms. I would suggest everyone reads Regime Change, the new book on Imperial Trump, to understand what the last 18 months has been about.

NATO has been the core of the Western Alliance and Transatlantic Economy. The men in the ill-fitting Florsheim dress shoes have broken it. What will follow is uncertain, but will clearly impact global markets and geopolitics to an enormous degree. The deepening Atlantic rift puts the need for European defence, sovereignty and resilience right at the top of the priority list.

2026 has been an interesting year thus far. A number of themes including AI, Geopolitics, Debt and Innovation have driven the flow of markets, which have very high upside expectations and few worries about downside risks. I would remind readers of Blain Mantra No 1: “The markets have but one objective: to inflict the maximum amount of pain on the maximum number of participants”. Hey-Ho, and on we go...

Trump is running out of options over Iran. Bluff and Bluster won’t fix it. When he visits Beijing this week, he will be up against Emperor Xi – who holds all the cards; sufficient oil reserves, dominance over global supply chains, and critically the ability to shut off the single most important commodity in the world today – Chips.

Trump took the Off-Ramp. Markets are soaring, off to the races as the threats of global slowdown, recession and stagflation recede. But, for all the military power and competency on display – it’s a strategic defeat for the USA. That has massive implications for US Assets – Treasuries, Stocks, Investment, Market Confidence and Politics.

We think we know the patterns – how markets resonate and repeat. But…. Do we? Every so often the Earth’s polarity shifts – but its never happened in recorded history so we don’t really know. Every so often the World’s basis changes. Make merry while we can. Enjoy what is real. The rest is just numbers. You are measured not by the digits on your bank balance, but by the numbers of your friends.

Oh dear. Last night’s explanation of the War did not go well. What changed except a more unstable and fractured global economy and rising trade, supply chain and conflict risks? When markets are priced for perfection – what happens when reality intrudes. I see bad things arising.

Who needs nukes to win an Oil War when Water is the key? The Front-Line Gulf States are highly vulnerable to a Water War on their desalination plants. Yesterday Trump threatened to strike Iran’s water infrastructure – practically inviting Tehran to strike back! But the Strait of Hormuz is not Iran’s only Ace in the current war.

The global economy is inevitably slowing from the deepening Hormuz oil shock. The Americans intend to press on despite the rising costs. While the global economy burns, President Trump is mulling multiple plans to achieve his version of victory. The rest of the World is waking to the reality this war is damaging their economic interests, and wondering how to mitigate the effects.

The cost of Trump’s War on Iran is extraordinary - $1 bln a day plus. War Stocks are being consumed at incredible speed. A request for an additional $200 bln of funding is in the works. The nature of war has changed – it could prove phenomenally destructive, expensive and ruinous to winners and losers alike. Meanwhile the economic outcomes of the war remain in the balance.