Political Theatrics And Resource Scarcity
Addison Wiggin / June 17, 2025
Day five of the Israel-Iran missile match, and the market seems content to believe the whole thing is winding down – if you follow the indices, that is.
There were some reports that the Ayatollah wanted to renew nuclear talks. Traders reached their risk-on caps by noon. Stocks rallied. Gold dropped. Oil dipped — evidently, Tehran’s energy infrastructure was spared overnight.
But should we trust the market today?
At 2:15 p.m. yesterday, President Donald Trump took to Truth Social and told the 13.9 million residents to “immediately evacuate Tehran.”
The White House was left to mop up the mess, insisting the post was a “message of urgency,” not a threat. Meanwhile, Congressman Thomas Massie (R–Ky.) introduced a resolution to prohibit American involvement. “This is not our war,” he wrote.
Trading on Bluster
Despite the melodrama, markets continued to climb. Commodities were softer — oil down, gold down, fear down.
Bonds? Up. A $13 billion auction of 20-year Treasuries drew eager buyers, a rare show of confidence in U.S. government IOUs, even as we print fresh piles of them daily to cover $316 billion monthly deficits.
Amid the sturm and drang, Elon Musk retweeted this thoughtful question: “How did we arrive at a point in this country where 25% of all tax revenue goes to just paying the interest on $37 trillion in debt?”
Frankly, we might ask, is this really the time to be engaging in a wider war in the Middle East?
That’s only one of the problems with running massive deficits in relative peacetime. When the missiles start flying, you don’t have cash on hand to fight.
Evidence for why Congress might indeed vote “yes, it is our war,” in a second.
Polymarket: Betting on the Apocalypse
Meanwhile, digital betting markets have seen a surge in trades on geopolitical events. We noted one of those trades in Polymarket in yesterday’s Ripple Effect.
Today, odds on U.S. involvement in the Israel-Iran conflict jumped roughly 30% following Trump’s Tehran evacuation post.
Also on Polymarket, the contract “Trump Chickens Out” — also known as TACO — is trading at par.
Polymarket, in this instance, provides a rather craven look at the impact social media has on our behavior.
You can sit in your pajamas and bet anonymously whether the U.S. is going to get involved in the opening salvos of World War III. It’s much cleaner than making a trade on oil hoping it will go up on the news – since in today’s age, it may not.
“Social Security Could Change Forever – Here’s What I Know”
According to a Boston-based institutional financial research firm serving clients like Goldman Sachs, JPMorgan, and BlackRock, “The way income will be calculated for Social Security could be about to change forever.” Right now the firm is sounding the alarm on huge changes ahead. They add, “Our research confirms: AI is already inside the SSA, with a full federal action plan due by July 22.” Full story here.
The Trump Trade: Bullish or Blinded?
According to Gallup, Republicans are more bullish on stocks than at any time in history — 47% more optimistic than Democrats. Liberals are piling into treasuries and gold. Conservatives are buying the stock market’s every dip, no matter how brief. And Congressional members, no matter their affiliation, are buying into defense contractors.
Liberation Day’s post-tariff S&P plunge was followed by a surprisingly strong rebound as the White House quietly paused, then reversed course on several economic grenades. Those who sold in panic missed a 9% run-up.
As Financial Reckoning Day warned, “You can’t time a delusion — but you can hedge against it.”
OpenAI Gets Its Marching Orders
The Pentagon quietly awarded OpenAI a $200 million contract to “develop prototype frontier AI capabilities.” Translation: the same chatbot you used to summarize Pride and Prejudice is now helping plan military operations.
OpenAI’s revenue run rate has hit $10 billion. Its valuation is pushing $300 billion. The question remains — when AI decides we’re the threat, will we at least get a polite warning before the drones arrive?
A Curious Congressional Event…
While we were discussing the missiles flying over Tehran and Tel Aviv on Friday, one of our researchers published this list of U.S. Congressmen who hold shares in aerospace and defense contractors:
This morning, when I went to review the list, conveniently arranged in alphabetical order, the post suggested I do something else with my time:
Fortunately, Andrew Zatlin, one of the top-rated payroll economists on Bloomberg, has also been tracking members of Congress and their favorite stock picks – many of which have fared significantly better than the S&P 500 over the past few months as the market has rebounded. Andrew’s service, Capitol Gains Trader, is worth a look for faster and better trading ideas in the current market environment.
Meanwhile, Goldman Sachs forecasts U.S. households will buy $425 billion worth of equities in 2025, thanks largely to 401(k) investors, who put money into the market like clockwork every payday.
Like gravity or a bad rerun of The Apprentice, the market just keeps pulling retail investors back in.
In other words, the retail crowd — yes, you, with your 401(k) plan — might be the only reason the market hasn’t collapsed under its own contradictions.
A reminder from analyst Paul Hickey: If you stayed in the market since 1950, $1,000 would now be worth about $2 million. If you invested only under Republican presidents: $28,000. Only Democrats? $72,000. Politics and portfolios don’t mix.
And yet, somehow for political insiders, they do.
Oil, Scarcity, and the Next Shock
Bonner Private Research’s portfolio director Tom Dyson reminds us this morning: The Fed can print dollars, but it can’t print barrels. Investment in oil production is at historic lows, just as demand creeps back toward 100 million barrels per day.
The Israel-Iran conflict isn’t about war, politics, history, religion or diplomacy. It’s about resource supply and demand. Scarcity, Tom says, is the hedge: gold, silver, platinum, bitcoin, cargo ships, and energy production. The stuff the Fed can’t conjure from an Excel sheet.
Woodlock Wisdom: Buy Right, Sit Tight
Thursday on Grey Swan Live!, we’ll be joined by a good friend, Chris Mayer of Woodlock House, a private family fund he co-founded with Bill Bonner. Their fund, seeded with $25 million, buys high-quality companies run by owners who have skin in the game.
Their approach? Simple. Concentrated. Old-school. Buy right. Sit tight. Sleep well.
We’ll also talk Sweden, Chris’ upcoming book Buy Right, Sit Tight, and maybe even Trump Mobile.
~ Addison
P.S.: Paid members, be sure to join us for Grey Swan Live! on Thursday, June 19, 2025. It’ll be Juneteenth, a freshly anointed federal holiday, so markets will be closed and we’ll be foregoing our free Daily sends. No matter, bring your charts, bring your bourb– err, questions. Chris is always a good conversation.
P.P.S: Back in February, I visited my friend Ronan McMahon at Playa Del Carmen in Mexico. Ronan is the founder of Real Estate Trend Alert – RETA – a group that finds the best investment opportunities in international real estate, from city living to beachfront condos in the Caribbean.
Ronan’s deal goes live tomorrow, but you can review the Cap Cana deal here. It may be just the kind of overseas dream home you’ve envisioned for your retirement – or for your next real estate investment.
Your thoughts? Please send them here: addison@greyswanfraternity.com