“Trump can’t stop getting in Vance’s way,” Reason’s Liz Wolfe wrote this morning, trying to wrap her head around the mundane details of the peace accord between the U.S. and Iran.
“It’s hard to know, when it comes to President Donald Trump, what exactly is deliberate and what’s not. He’s either a man with shockingly poor impulse control or an especially skilled master manipulator. I assume more of the former, but your assessment may vary.”
The latest example arrived this morning.
While Vice President J.D. Vance was reportedly still working diplomatic channels with Iranian negotiators, Trump appeared on Fox News and offered a somewhat less nuanced contribution to the discussion.
Referring to Iranian threats involving the Strait of Hormuz, Trump said he had delivered a simple message: close the waterway and “you won’t have a country.”
Diplomacy has always contained elements of theater. The difference today is that the audience watches rehearsals, yet script revisions and backstage arguments occur in real time.
☢️ Somewhere Between Public Certainty and Private Compromise
Perhaps the administration is running a deliberate good-cop, bad-cop routine. Vance arrives with proposals, Trump arrives with threats, and Tehran is left to determine which version of Washington represents the actual policy.
Perhaps the president’s negotiating style simply resembles that of a New York real estate developer who regards subtlety as an underutilized form of weakness.
While questions remain about the durability of the U.S.-Iran agreement, the reopening of the Strait of Hormuz has already produced one tangible result: the gradual return of commercial shipping through a waterway that serves as a vital artery for global energy markets. (Source: U.S. Energy Information Administration)
Or perhaps events are moving quickly enough that diplomacy and coercion are being deployed simultaneously, depending on the hour and the headline.
Asked about Trump’s remarks, Vance offered a defense that sounded remarkably like an explanation many White House staffers have probably delivered over the years.
“When you guys engage in what us millennials might call trash talk,” he said, “you can’t expect the president of the United States not to respond.”
The line captures one of the stranger realities of 21st-century geopolitics.
For investors, the biggest takeaway is that geopolitical risks appear to be moving in the right direction. Relations with key Middle Eastern partners remain intact, shipping lanes are reopening, and markets are increasingly pricing in de-escalation rather than a broader regional conflict. (Source: Shutterstock)
Nuclear negotiations now unfold alongside social media dynamics. Foreign ministries issue statements. Presidents respond publicly. Diplomats spend their mornings discussing uranium enrichment and their afternoons explaining why somebody posted something inflammatory the night before.
Meanwhile, the substance remains unresolved.
Iran’s Foreign Ministry spokesman, Esmaeil Baghaei, said today that Tehran has no plans to permit inspectors from the International Atomic Energy Agency to examine damaged nuclear facilities. That position appears inconsistent with comments Vance made only a day earlier.
Iran also continues insisting that Israeli forces withdraw from southern Lebanon. Israel continues insisting that Hezbollah remains an unacceptable security threat. Neither side appears eager to surrender its position.
That leaves negotiators in the familiar territory where most diplomatic breakthroughs eventually occur: somewhere between public certainty and private compromise.
♟️ The World’s Oldest Chess Match
It’s hard not to see Trump’s excursion into Iran as a huge “own goal,” to use the World Cup for emphasis.
“It seems like a recycled Obama deal,” writes Grey Swan contributor Moh Khashoggi. “Honestly, no one knows what it even entails.”
We’d asked his opinion on the deal because his perspective is unique. Moh is a Saudi national who grew up in Lebanon, went to boarding school in Switzerland and read 12th-century Islamic history at Oxford.
Like many of us, Moh is a lifelong natural resource investor, having followed his family’s lead. A generation before him, the Khashoggis provided a sizable chunk of capital to found Barrick Gold.
The U.S.-Iran deal has temporarily cooled one of the market’s most important geopolitical flashpoints. Energy flows are stabilizing, and worst-case scenarios are being repriced out. But the underlying tensions that define the relationship remain unchanged, leaving the situation fundamentally fragile. (Source: Shutterstock)
When we heard back from him, he was at the airport in Riyadh on his way back to his current residence in Taipei, Taiwan. His current project is a full-length documentary on Iran, its long history and the impact of the 50-year Islamic revolution that currently grips the nation with an iron fist.
“There is one thing I can tell you for sure,” Moh concludes, “Formal diplomatic negotiations for territorial boundaries between Iran (Persia) and the Ottoman Empire took over four centuries and never concluded! These guys are no amateurs. Think of their counterparts on the American side, two real estate developers and a very nervous American political class.”
The U.S. contingent and the Iranians have very different measuring sticks and time frames for what constitutes a successful resolution of hostilities. For now, we simply watch crude oil prices to see what the market makes of it all.
📨 A Few Nice Member Emails
“Thank you for the superbly written and vastly informative monthly reports and updates,” writes Grey Swan member Joe S. “The writing is lucid, the insights are deep and not only are they fun to read, they contain information to help understand the quagmire that is our current financial landscape.
We’re taking the rare moment in today’s to share with you some positive member feedback.
“Addison,” writes frequent correspondent Scott P. “Great essay on the Federal Reserve and Alan Greenspan’s life and history. He was on target saying we should not go off the Gold Standard.”
Scott goes on to say:
I didn’t realize he studied with and was a friend of Ayn Rand. She laid out clearly what could happen in her book, Atlas Shrugged. And it has happened.
The powers that be did not want, could not, or won’t listen. Our politicians became electoral scientists and political economists, excluding any real-world common sense. The U.S. government and the Federal Reserve have no expertise or right to intervene in the free economy.
But you can’t correct stupid. They will continue to pay for it from the taxpayers’ pocket.
If they left it alone, like in the new leadership in Argentina, the economy would heal itself.
We don’t know for sure, but the rumor has it that Greenspan and Rand were a little more than just friends. But… who are we to judge?
If you have anything to add, please send your feedback here: feedback@GreySwanFraternity.com
~ Addison
P.S. Kevin Warsh’s first Fed meeting may end up being more important than the market’s initial reaction suggests.
While investors quickly returned their focus to AI and momentum stocks, Warsh signaled that he’s prepared to move away from the Fed’s long-standing practice of telegraphing future policy moves.
We’ll discuss why that matters — and what it could mean for market volatility and investment opportunities in the months ahead — on Grey Swan Trading Fraternity this Wednesday at 3 p.m. ET.
One of the enduring mysteries of Alan Greenspan’s career is whether the young economist who wrote Gold and Economic Freedom changed his mind, or whether decades inside the Federal Reserve simply taught him how difficult it is to impose monetary discipline on a democratic society.
Warsh now occupies the same chair. Investors will spend the next several years discovering which lessons he took from Greenspan’s career.
On Thursday, we’ll host Dan Amoss for Grey Swan Live! In a brief conversation we had with Dan following Warsh’s first press conference, Dan, skeptical, explained how he believes the Fed, even under Warsh, will be forced into “financial dominance,” a fancy way of saying monetary policy will be under Trump’s thumb at least until November.
