Oil’s Most VOLATILE Day In History w/ Anthony Scaramucci | PBD #757
Quick Read
Summary
Takeaways
- ❖Oil prices saw their most volatile day in history, dropping significantly after hitting nearly $120, influenced by President Trump's consideration of seizing the Strait of Hormuz and his belief the conflict would end soon.
- ❖The Strait of Hormuz is a critical choke point, with 20% of the world's oil passing through it, making its security paramount to global energy markets.
- ❖Anthony Scaramucci predicts oil prices will trend lower once the Iran conflict resolves, returning to earlier-year levels, citing the time it takes to restart oil production (3-6 weeks).
- ❖Tom Ellsworth emphasizes that market uncertainty, not permanent fundamentals, drives spikes in oil prices, noting that Western oil supplies (North Sea, West Texas, North Dakota, Alberta) remained stable.
- ❖US refineries are well-equipped to process heavy crude from Venezuela, making Venezuela a strategic oil source for the US, especially after easing sanctions on Maduro's regime.
- ❖Trump's Middle East strategy aimed for 'regime change light' in Iran, similar to Venezuela, by supporting secularists, but this was complicated by Israeli actions against Iranian leaders.
- ❖The Iranian population is 'declawed,' lacking weapons and facing a massive surveillance state, making an internal overthrow of the regime highly improbable without external support.
- ❖The US is facing a potential 'quagmire' in Iran, with no easy exit strategy, especially given the missing 460 kilos of uranium and the entrenched power of the IRGC.
- ❖Israel's victory objective in the conflict is a 'crippled state' in Iran with no ability to attack, which differs from the US goal of a secular, Western-aligned government.
- ❖If the US pulls out of the Iran conflict prematurely, the IRGC will declare victory, rebuild, and intensify internal repression, leading to severe consequences for the Iranian populace.
- ❖The US economy shed 92,000 jobs in February, below expectations, while the CPI rose 2.4% annually, indicating a complex economic picture that some attribute to political manipulation of job reports.
- ❖Inflation, as measured by 'trueflation.com' (0.92%), is lower than CPI suggests, but the US dollar has lost 28.25% of its purchasing power since January 2020, effectively taxing citizens through currency debasement.
- ❖Bitcoin is positioned as a significant operating layer and store of value, with its limited supply making it a hedge against fiat currency debasement, predicted to reach gold's market capitalization ($35 trillion) within 15 years.
- ❖AI firm Anthropic is suing the Trump administration over its blacklisting by the Pentagon as a 'supply chain risk' for refusing to remove guardrails against using its AI for autonomous weapons or domestic surveillance.
- ❖The panel agrees that the Pentagon's public dispute with Anthropic over a $200 million contract is 'dumb' and likely to be lost in court, given that other agencies already use similar AI for surveillance.
- ❖ChatGPT's market share has declined from 87% to 68% and is still falling, as users migrate to other AI platforms like Claude and Perplexity, which offer superior functionality or access to multiple models.
Insights
1Oil Market Volatility and Geopolitical Triggers
Oil prices experienced their 'most volatile day in history,' with significant swings from nearly $120 down to $85. This was directly linked to US military actions against Iranian mine layers in the Strait of Hormuz and President Trump's statements about potentially seizing the strait and ending the conflict quickly. The volatility reflects market uncertainty rather than fundamental shifts in supply, as major Western oil production remains unaffected.
Oil prices fell Monday in extended trading after President Trump said he was considering seizing control Straight horm... The crude oil was down 6.19% to 85.27... Anthony Scaramucci: 'you've got 21 miles straight, uh, 20% of the world's oil coming through there.' Tom Ellsworth: 'uncertainty creates this... these are not permanent things these are reactionary.'
2Trump's Divergent Middle East Strategies: Venezuela vs. Iran
Trump's administration successfully executed a 'regime change light' in Venezuela by leveraging economic pressure and internal dissent to replace Maduro without significant bloodshed. This success led to an overconfident approach in Iran, aiming to destabilize the regime by targeting its leadership and supporting secularists. However, the Iranian situation proved more complex due to the regime's entrenchment, the 'declawed' populace, and Israel's more aggressive, divergent objectives.
Anthony Scaramucci: 'he's looking at this and saying to himself, I was able to figure out a way not to have regime change, sort of regime change light in Venezuela... I was able to get Deli Rodriguez to come on side with me... And he was told again rightly or wrongly he was told by intelligence... that there were secularists in Iran.' Tom Ellsworth: 'This thing feels sloppy though compared to Venezuela. Like Venezuela Venezuela was meticulous.'
3US-Israel Disconnect on Iran Objectives
The US and Israel have fundamentally different definitions of 'victory' in the Iran conflict. The US aims for a secular, Western-aligned government, while Israel seeks a 'crippled state' with no offensive capabilities, even if it leads to internal chaos. This divergence, particularly Israel's aggressive targeting of Iranian leadership beyond US initial plans, has complicated the US strategy and created a potential 'quagmire' where a US withdrawal would leave Israel highly vulnerable.
Anthony Scaramucci: 'where I know and fairly certain he's upset with the Israelis because the Israelis went down the line and killed everybody, Patrick... The vision was knock out the regime or at least the top few guys and then find a secularist to do business with.' Patrick Bet-David: 'Victory to US is different than victory for Israel, Tom.' Tom Ellsworth: 'Israel wants to see ironic that the victory for us is the victory for Israel. But Israel really wants Look, ideally Israel needs everyone to be Jordan... they need crippled states.'
4Inflation as a 'Regressive Tax' and the Value of Hard Assets
The US government's approach to managing its long-term debt involves 'inflating their way out,' which acts as a regressive tax on citizens, particularly the working poor, by eroding purchasing power. The US dollar has lost 28.25% of its value since January 2020. This trend underscores the importance of investing in limited, hard assets like Bitcoin and collectibles (e.g., rare cards, T-Rex fossils) as a hedge against currency debasement.
Brandon Asetto: 'inflation's not going down until that number's negative... That's why limited assets are going to be valuable and more valuable every year.' Anthony Scaramucci: 'Milton Friedman... said that deficit spending is unfunded tax liability... Our politicians have decided to pay it through the most pernitious and regressive way... the tax of inflation.' 'The US dollar has lost 28.25% of its value since January 2020.'
5The Pentagon's AI Blacklisting and its Implications
The Pentagon blacklisted AI firm Anthropic as a 'supply chain risk' because the company refused to remove guardrails preventing its AI from being used for autonomous weapons or domestic surveillance. Anthropic argues this designation is unlawful and violates free speech, highlighting a growing tension between national security interests and ethical AI development. The panel views this as a 'dumb fight' that the administration will likely lose, given the existing use of similar AI tools by other government agencies.
Clip: 'Artificial intelligence firm Anthropic sued the US government on Monday, trying to block the Pentagon from placing it on a national security blacklist... after the startup refused to remove guard rails against using its AI for autonomous weapons or domestic surveillance.' Anthony Scaramucci: 'I think they overly bullied Anthropic here... they're going to lose this case in court.' Tom Ellsworth: 'To be arguing publicly about a $200 million contract... and ending up in a lawsuit position... I don't think that's smart.'
Bottom Line
Trump's foreign policy decisions are heavily influenced by personal financial gain and attention, rather than purely by legacy or national interest, particularly concerning relations with Gulf States and Israel.
This suggests that US foreign policy in the Middle East may be subject to abrupt shifts or compromises based on the President's personal business interests, leading to unpredictable outcomes for allies and adversaries.
Analysts and foreign entities can better anticipate US actions by considering the President's financial and public image motivations, potentially leveraging these to influence policy or prepare for changes.
The US military, despite a trillion-dollar annual budget, appears unprepared for 'low-tech' warfare tactics like mines and drones, and is susceptible to price gouging on defense contracts, leading to capability gaps.
This indicates a significant inefficiency and potential vulnerability in US defense capabilities, where massive spending doesn't translate to comprehensive preparedness for modern, asymmetric threats.
Defense contractors specializing in counter-drone technology, mine detection/removal, or efficient, cost-effective military solutions have a clear market opportunity. Additionally, investigative journalism into defense spending waste could drive public demand for reform.
Opportunities
AI Implementation Consulting for Enterprises
Develop a consulting firm specializing in helping large companies ethically and effectively implement AI solutions, focusing on integrating advanced models like Claude into existing workflows for productivity gains while navigating regulatory and ethical concerns.
Collectible Asset Management & Yield Generation
Create a service that helps high-net-worth individuals acquire, manage, and generate yield from unique physical and digital collectibles (e.g., rare cards, dinosaur fossils, iconic movie props). This addresses the need for inflation-hedged assets and offers opportunities for display and exhibition income.
Key Concepts
Uncertainty Creates Volatility
Markets react sharply to uncertainty, leading to temporary price spikes or drops, but long-term fundamentals often reassert themselves once clarity emerges. This is evident in oil price fluctuations during geopolitical crises.
Inflate Their Way Out of Debt
Governments with significant long-term debt often resort to inflation to devalue the debt, effectively taxing citizens through reduced purchasing power rather than direct taxation. This is described as a 'pernicious and regressive' method.
Wartime vs. Peacetime Leadership
Different leaders thrive in different environments. 'Startup chaos' leaders like Trump are comfortable in unpredictable, high-stakes situations, while 'corporate CEOs' prefer stability. This applies to political leadership during crises.
Lessons
- Diversify investment portfolios with limited, hard assets like Bitcoin and high-value collectibles to hedge against fiat currency debasement and inflation.
- Stay informed about geopolitical developments, especially in critical energy regions like the Middle East, as they can cause rapid and significant shifts in global markets.
- Evaluate economic data from multiple sources, such as 'trueflation.com,' to gain a more accurate understanding of inflation and its impact on personal wealth, rather than relying solely on official CPI reports.
Quotes
"My prediction, will trend lower back to where they were at the beginning of the year once this resolves itself."
"Everybody has a planet until you're punched in the face."
"If you kill the Supreme Leader, you know, he's 86. He's about to be dead here soon anyways. But if you take him out and now you take out 50, it's like in the mob war. If all of a sudden you took out the boss, the underboss, the capos, the consiliary, you better take out the entire family. You can't let them stay because this guy that's left behind... he's bitter with a vision."
"If you don't believe what you're hearing, Google this phrase, government long-term debt inflate their way out."
"The US dollar has lost 28.25% 25% of its value since January 2020."
"I think the very big lesson uh 40 years of being an investor, my mistakes have been selling too early. That's my that that's my that's my lesson to people. Own quality, stick with quality. Think like Michael Sailor and Warren Buffett."
Q&A
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