THE FINAL BATTLE

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Ray Dalio is added again, folks.

Ray Dalio is painting a very interesting picture about the war with Iran.

Specifically, Ray is focused on the straight of Harmuz.

Ray Dalio actually calls this the final battle.

Let me give you a picture of what I think he is trying to highlight to us.

Let's talk about the questions I got after reading his lengthy post.

Basically, Ray dates via negotiations or ceasefire or whatever.

Let's Iran continue to hold the power over the straight Harmuz.

It will be considered a loss.

And America cannot have a loss.

Again, remember this is a summary from Ray Dalio's post.

If the United States suffers a loss with Iran,

it would be a earth shattering break in a reputation.

Our friends around the world would see it as a weakness.

And as Ray Dalio has often said bad things happened from there.

So I have no idea if that's true.

But again, I read articles.

I think about it.

So here are my questions.

And first, I will say this.

I think he's right.

I think at this point, your pot committed,

you can no longer let Iran be this choke point through the straight of Harmuz.

It has to be under some kind of international control or something like that.

But here's the problem.

Here is the problem as I see it.

One, I don't think you can have or accomplish that quickly.

I suspect that Iran would fight to the end because they know that the asset that they have

by having that choke point.

So it is going to be not easy to do and certainly not quick.

Second, the big problem, the one that has been my biggest fear and you've heard me talk about it

on the daily financial news is, unfortunately, I suspect, and again, I hope I'm wrong.

The only way you control the straight of Harmuz is with boots on the ground.

And I don't want that.

That's like we've been here before.

And it doesn't end well for us, typically.

But I don't know how else do you maintain control of the straight of Harmuz?

Again, if Ray Dalio is right, this is the final battle.

Next, I have a question about will other countries help?

Because this doesn't have to be a US-only thing.

The rest of the world certainly needs the straight of Harmuz as much if not more than us.

So, could there be an international coalition?

Could there be something like that?

Again, I don't think it happens quickly.

But could the end result be NATO, for example?

Again, I'm making stuff up as I go.

Could NATO control the straight of Harmuz?

Possibly.

I mean, give NATO something to do.

So maybe that's the answer.

And then finally,

will countries continue to lose faith in the US Treasury, the US debt?

This is messy.

And Ray Dalio, the fourth turning, all these things have been talking about the death of the US,

you know, dollar and economy and all of that.

It's messy out there.

I certainly am not negative like Ray is.

But I will agree that the straight of Harmuz is,

for whatever reason, it's going to prove to be messy.

So more on that in a little bit.

Well, I don't know if you saw it today, but we got a PPI reading and it was hot, hot, hot.

And what's scary is it was a hot reading without, without impact from energy and oil.

PPI folks was red hot, 3.4 headline, 3.9 core, food up, 2.4, energy up, 2.3, dry vegetables up,

48.9, services goods, all of it up, all of it bad.

Again, remember also we have a fed meeting later today.

And again, I do want to highlight that all of this, all of this hot PPI reading was before the war.

That comes next month.

That comes next month.

So again, folks, it is fed day.

And again, I am wondering how many, if any, fed presidents on their dot plot say the next,

the next fed move is up, not down, also what is the odds of a rate cut in 2026.

Fed meeting dot plot, it is going to be interesting.

We did get some earnings, a couple of them, Lulu Lemon, again, beat top line and bottom line,

but issued weak guidance, pretty much like Macy's beat top line bottom line, but issued weak guidance,

Macy's CEO highlighting that gas prices, yes, gas prices will impact consumers.

We also got mortgage demand and it collapsed last week, mortgage demand collapsed 10.9%.

These are all week on week numbers.

Refies down 19 and purchase actually up, purchases were up 1% week on week.

If you look year on year, refies are still up 69% and purchase up 12%.

So again, zoom out, look at year on year and the numbers are still positive.

Private credit says defaults now are at 9.2%, that is a record high.

Again, we've seen lots of Wall Street firms in the like kind of with limit, withdrawals.

Again, private credit is going through its loss phase given its ill liquidity and the like.

Redfin highlights that 49% of American households struggle to pay rent or mortgage.

Every time I read one of these, every time I read one of these, I go, well, what was it two years ago?

What was it five years ago? Because in my experience, the average American household is not good

with money. They live paycheck to paycheck. And again, 49% sound scary, but hey, a decade ago,

it was 48%. I'm not particularly worried about it. If a decade ago was 8%, then we got a problem.

Those of you looking at home insurance looks like it's still not out of the woods.

Home insurance was up 12% last year. It's expected to rise another 4% this year.

Don't forget that steadily is landlord insurance. Again, if you are a landlord, give them a shot.

Maybe they can help. They certainly helped Olivia and I say 20 grand last year,

which I am super appreciative of. So again, go check them out.

Don't forget our school community. We've got two accountability groups. The first one,

ladies of ORAT, love that community. Ladies of ORAT starts in about 22 minutes, 8 to 9 a.m. Pacific.

And the Wednesday accountability call continues. This was our first and original one run by Frank,

the old guy, REI. He has had to take a step back. But others have jumped in to make sure that this long

running accountability call continues, which is just a sign of our amazing community. So tune in

for that six to seven o'clock Pacific tonight. Citadel Securities has shifted focus.

They're saying inflation is not the boogie man. It's growth. Now again, if you step back and you

look at the long history of wars, this is the problem, especially with oil shocks. Again,

folks, something I've tried to help you understand is what is coming as demand destruction.

Oil rises. Companies pass on costs. Consumers step back. Consumers are afraid.

Demand destruction. Lower GDP. Fed rate cut. That's just how this plays out all the time. Look at

the chart. It's not instant. It's not days. It's not weeks. It's not months. It's quarters.

But that is the long running history of what we call demand destruction.

Tune in for that. Open AI is going public. Open AI says it's going public later this year.

I got to tell you, I'm not an open AI fan at all. I think they are a money grubbing

organization that is lighting money on fire. And what I think's happening there, again,

this is just one guy's opinion who knows nothing about IPO. So again, don't listen to me here.

I think Sam Altman's running out of money to raise money from. So he's going to go to the public

markets. And he doesn't have any more money from Nvidia or Oracle or any of these other places.

So he's going to come to the public markets and burn your money up. And yep, we'll see what happens.

Again, he needs trillions of dollars. And of course, he needs to go buy his fancy cars in the

like. So again, pretty crazy stuff. What else do I got? Oh, CNBC Fed survey says that they still

expect 1.8 cuts this year. Oil at 88 bucks in six months. That's out. Half a percent

of inflation passed through from high oil. That's probably an understatement, in my opinion,

less growth. Again, AKA demand destruction, down point three. And the odds of a recession have

increased to 31%. So again, pretty interesting. I think that's all I got for you today. Yep,

don't forget to join school. Again, if you are looking to get wealthier, get started. I'm giving

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