Transcription
No, we are not equipped militarily right now to seize control of the street. Very few people have looked at the geography. It is extremely tough, very difficult to deal with. But beyond that, Iran has mastered something that we saw emerge in eastern Ukraine.
>> [music] >> We watched the Russians demonstrate it, but we don't seem to have paid any attention to it. If we don't get this straight opened, we could slide into a global depression. Correct. He is absolutely right. And we have been emptying our own strategic petroleum reserve, pouring it into other countries as well as into our own and try to keep the price of oil low. We're about to run out of that flexibility over the next few weeks. So, there is a way to solve this. It's a military solution.
>> Leave. >> Yeah. >> Out. And the sooner we get out the better because the longer we're there, the more likely we are to be dragged back in. And that could result in catastrophe.
>> The memorandum of understanding was signed on June 17th. Trump posted on Truth Social telling ships across the world to start their engines. Nine days later, on June 25th, Iran launched four drones at a UN-backed evacuation vessel in the strait. US Central Command launched retaliatory strikes on Iranian military targets in response. The Strait of Hormuz is still not open. That's the situation Douglas McGregor walks through in this interview, and he gets to the root of it methodically. He served as senior advisor to the Secretary of Defense in Trump's first term. What he covers here goes in sequence. Why the military option for seizing the strait was never viable, who inside the administration pushed the country into war in the first place, and what the only path out of this actually requires. His conclusion has not changed since before the strikes began on February 28th. Washington needs to leave. Also, before we get into it, only a small percentage of my viewers are actually subscribed. If you enjoy geostrategy content, consider subscribing. It's free, and you can always change your mind later. Now, let's listen.
>> I'm sure that President Trump would like to see something emerge from this, but he may be alone in his wishes, which is part of the problem. Uh the second thing is this has nothing to do right now with peace negotiations. This is all a a memorandum of understanding that whose real purpose is to get to the point where we can fully open the Strait of Hormuz. Everybody, of course, forgets that the Strait of Hormuz was open and there was no problem until we attacked Iran. But, for some reason, people seem to think that we should now begin the attacking again here in Washington in order to open that street because the evil Iranians are responsible for this. That's a lot of nonsense, but uh there are a lot of people in Washington with lots of illusions.
>> Do you think Lindsey Graham knows that it's not possible or is he really this stupid?
>> Well, I don't think Lindsey Graham is stupid. None of the people that you're listening to in Washington are necessarily stupid. You have to look at where their money comes from. And if you understand where the contributions to his continued presence in office are coming from, then you understand the positions he takes. And that's why he's uh 199.9% with AIPAC and the Israel lobby. So, I would just dismiss that part. Mhm. The first question is a very important one. No, we are not equipped militarily right now to seize control of the street. Very few people have looked at the geography. It is extremely tough, very difficult to deal with. But, beyond that, Iran has mastered something that we saw emerge in eastern Ukraine. We watched the Russians demonstrate it, but we don't seem to have paid any attention to it. And what the Iranians have done is that they have linked space-based surveillance, persistent surveillance, constant surveillance with all the intelligence and reconnaissance platforms at their disposal to provide instantaneous targeting data to a multitude of weapon systems, mostly theater ballistic missiles, tactical ballistic missiles, all kinds of unmanned systems, anything that falls into the category of unmanned or standoff attack. To the point where anything that moves within three, four, 500 miles of the Iranian border is going to be picked up, monitored, tracked, and if necessarily targeted and destroyed. And this is the problem. It's not a question of can you break through something and get there? No, you can't. If you try to sail a ship through this thing, you're going to be hit by multiple tactical ballistic missiles and probably lots of unmanned systems. You'll either be neutralized or sunk. We don't necessarily want to go through that catharsis, and so we've been unwilling to try and force our way through the strait. If you try to use ground forces, can you get them in there? Well, then you have to go through the air defense system, which has gotten increasingly better, far more lethal now and capable than it was at the beginning. What are you going to do with it? Well, take islands, seize the city of 250,000 people in Bandar Abbas inside the Gulf. It's not going to do you much good. It's going to be a miserable experience, and you're probably going to get everybody killed. If they do get in there at all and are not shot out of the sky or shot out of the ocean on their way in, then they're going to be annihilated once they land. I think these things have been made clear to President Trump, but these things are not understood in Washington. And so, lots of people are very angry. I mean, remember, we're the greatest country in the world. We have the greatest armed forces in the world that were all rebuilt just a few years ago, remember? It's just worse and absurd. It takes 10 years to build an army, you know, to build a navy 20 to 30. You know, who are we kidding? That's nonsense. We're dealing with legacy forces that have been with us really all through the Cold War, certainly over the last 30 years. So, this is the wrong force for the mission. And it's not a question of don't we have good soldiers, sailors, airmen, and Marines? Of course, that's not the issue. It's the wrong force for the wrong mission in the wrong place at the wrong time.
>> What is your I guess evaluation of Secretary of Defense Pete Hegseth's conduct throughout this war in Iran?
>> Well, let me back up and just say that if you read the Substack, what I try to get across to people is that even though we understand that President Trump's the commander-in-chief, he's ultimately responsible for whatever does or doesn't happen, he's not alone. He doesn't reach these conclusions or decisions on his own. There has been a tendency to blame the Israelis. Well, the Israelis had an agenda to drag us into a major war so that we would destroy Iran for them. Gosh, what a shock. Are you going to believe whatever they tell you? Only if you're very stupid. So, I think that probably President Trump believes some of it, but I think he turned to his inner circle. And I think he turned to his Secretary of War. He turned to the director of the CIA. He turned to the senior military advisor to the president, the chairman of the Joint Chiefs, General Keane. There are others he probably consulted, but those are the ones that I would think he would talk to. They must have said something about it. They must have expressed an opinion. My impression is they said, "Go for it, boss." And that's what's gotten us into this mess. Well, keep in mind that first of all, the so-called Israel lobby, which consists of something much larger and more powerful than the simple lobby that we talk about, which is a few people and some think tanks in Washington. You're talking about people with billions of dollars.
>> Mhm. >> And they have been purchasing politicians for 30-plus years. And they have poured a lot of money into politicians. And now they expect the politicians to perform. That's number one. You know, we paid for you, we found you, we put you in office, now you're going to do what we want, and we want the greater Israel project. Now, the greater Israel project is seen on a map, supposedly territorial conquest, but it's also part of making Israel the financial center of the world. So, you're talking about international Jewish financial power, which is really behind everything and is driving everything. And it it got control of the British Empire when the British Empire ceased to be a major power, it got control of us. And right now, they control Washington, which is what they want. And the United States Armed Forces are at their beck and call. All you have to do is go back over the last 10 years and look at all the CENTCOM commanders who made the little pilgrimage over to the Foundation for the Defense of Democracy and got on the stage there as three stars, sometimes earlier, to pay homage to Israel and declare their readiness to destroy the enemies of mankind, which are equated to the enemies of Israel. So, all of these things are bound up together. So, we have a strong Israel first problem in the very senior ranks of the US Armed Forces.
>> Yeah. >> And now you mentioned Haig says, Haig says, of course, I'm told is being among the most vocal supporters of all this. And he and apparently our friend the CIA director have both said, "No, no, no, we have to keep bombing, keep bombing." And of course, the Air Force has always taken the position if you bomb long enough, you'll win.
>> Mhm. It's crazy. No. >> It It's not an answer, and it It's really not what we want to do. And when people bring up World War II, I always look at them and say,
>> [music] >> "You know, we firebombed the Japanese. We firebombed the Germans. We killed billions of people who didn't need to die."
>> The targeting system McGregor describes space-based surveillance feeding instantaneous data to ballistic missiles and drones across a 4 to 500 mile radius was not a theoretical concern 2 days ago in the Strait, it was operational. On June 25th, Iran launched four drones at the Ever Lovely, a Singapore flagged cargo ship transiting a route the International Maritime Organization had designated specifically for maritime evacuations. Three drones were intercepted. The fourth hit deck of the vessel damaging the bridge windows. The ship was able to exit the Strait. No casualties were reported. The IMO immediately suspended its evacuation operation for 11,000 stranded sailors across roughly 2,000 vessels still sitting in the Gulf. Yesterday, CENTCOM confirmed it had launched retaliatory strikes on Iranian military targets hitting coastal radar infrastructure and facilities linked to missile and drone production. That's the ceasefire 9 days after the MOU was signed. The route the Ever Lovely was using is central to understanding Iran's position here. Iran has stood up what it now calls the Persian Gulf Strait Authority to manage traffic, and that body issued a formal warning this week that vessels navigating outside Tehran's designated [music] channel would not receive safe passage guarantees. On Friday, three separate oil tankers were warned and turned back after deviating from the Iranian approved corridor. An Iranian negotiating team member confirmed this week that once the 60-day suspension on transit fees expires, collection will resume. The Iranian framing is that these cover services provided to vessels. The practical effect is that Tehran retains administrative and physical control over who moves through the waterway even while describing it as open. Worth noting about what McGregor said before the mid-roll, his claim that the inner circle, Heggseth, the CIA director, and the chairman of the Joint Chiefs all told Trump to proceed is a credible inference from someone with his background, but it remains an inference. No public record of those conversations exist. What's documented is the outcome. Four months into a war that was framed as a targeted operation, the straight [music] is still contested. The ceasefire is already producing incidents, and the global energy disruption has not resolved. The family at home paying $4.50 a gallon is not waiting on diplomatic timelines to feel that. Back to McGregor now on Israel's position inside all of this and why the exit has no clean version.
>> Now, let's give Donald Trump some credit, okay? He said when he was in Versailles something that was very true. If we don't get this straight open, we could slide into a global depression. Correct. He's absolutely right. And we have been emptying our own strategic petroleum reserve, pouring it into other countries as well as a new our own and try to keep the price of oil low. We're about to run out of that flexibility over the next few weeks. So, one would think under the circumstances it would be a tremendous sense of urgency, but he's got a problem. It's Israel. And you said, "Well, why would Israel want to put itself through this, you know, terrible experience?" Well, this is about Israel's survival now. This is a an extinction-level event. If they don't win this war, if Iran is not destroyed, if it is not fragmented, divided, disintegrated, [music] which after all is the same plan that we had for Zelenskyy and Russia. Divide it up, break it up, destroy [music] it, make it, you know, essentially whatever we want it to be. That failed in Ukraine. Now, they're trying it in the Middle East. If it doesn't succeed, and the war should end, and we walk, what happens to Israel?
>> They use a nuke?
>> Well, that's a very dangerous thing to do because they're with other partners that are not partners, but states in the region that have access to nuclear weapons. The Turks have always known that if they needed a nuclear weapon, they could get it from Pakistan. And I think the Pakistanis have been very, very straightforward about saying to the Iranians, "If you need this, we'll provide it." Now, I can't prove that, but I rather suspect that's the case. I think the Islamic world is largely united now in its opposition and resistance to Israel. Who are the Who are the people that are standouts or not following in this? Well, the UAE is aligned with Israel and us. They're still trying to murder people in Gaza. They don't give a damn what happens to people in Gaza, which you would think under normal circumstances as fellow Arabs and Muslims, they would care. They don't. Saudi Arabia, well, Saudi Arabia's usually on all sides of all issues. But the bottom line is that none of the Arab states have any real military power. They have financial power. And right now, you've got the Qataris and the Saudis working very hard behind the scenes to assure the Iranians they will get their money. We're not doing that. They are. And remember, we're not talking to them. We're not talking to the Iranians. We exchange notes, but that's it. There's no face-to-face discussion. So, I I don't hold out much hope for an agreement. And that's why in the paper that I wrote, I said there is a way to solve this. It's a military solution. Leave.
>> Yeah. >> Out. And the sooner we get out the better because the longer we're there, the more likely we are to be dragged back in. And that could result in catastrophe. I think we need to abandon this notion of ever going back into the Gulf because there's no way we can protect those countries. That's been clearly demonstrated. One of the things we need to do globally, not just in the Persian Gulf, is get people to get along with their neighbors. You know, there's The Estonians, Latvians, Lithuanians would love to drag us into a war with Russia. They would love to play the Israeli role. We got to get out of this business of the tail wagging the dog. We have too many too many relationships like that. But there's something else that we need to keep in mind, and that is who has dominated this region of the world for most of the last 500 years. It's a trick question. Persia and Turkey.
>> Oh, I see what you're saying. Okay.
>> Israel Israel's only a little over more than 70 years old. Israel is regarded by everyone as an artificial construct. In fact, that's why most people view the statelets in the Persian Gulf. These are artificial constructs. The creatures of British imperialism.
>> Mhm. >> What is Sykes-Picot? Created these creatures of British imperialism. Everyone in the Everyone in the region, if you talk to the elites, if you can get in to talk to them, they'll all say the same thing. Sykes-Picot is over. Well, if it's over and we leave, who runs the place? Ankara and Tehran. Now, they've already cooperated against the Kurds, and they're quite willing to cooperate in the future against the Kurds and others in Iraq. Northern Iraq was part of the Ottoman Empire. The Turks want Northern Iraq. What's in Northern Iraq? Oil.
>> Mhm. >> And what happens to Kuwait? What is this thing called Kuwait? Was there a Kuwait 500 years ago? No. It was either under Persian administration or Ottoman administration. What I'm trying to get across is whenever we go anywhere, Anna, we just temporarily distort the normal dynamics of the region. Now, I'm not saying that Turkish armies are going to mobilize and march all over North Africa and all over the Middle East. That's not my point. My point is they are the natural dominant powers. We are not. We do not live there. Israel is an artificial construct, and for that reason its founders were much more cautious than the people who are currently running Israel. They saw the boundaries. They understood the limitations of their power, and they did not delude themselves into believing that they could control the United States, its military power in perpetuity. Now, right now, you and I know that in the United States, the polls have shifted decisively against the Israelis. So, why is the Hill paying attention to anything the Israelis want? Is this not a republic? Is this democracy? I guess we've answered that question. It isn't. The people in Washington are not responsible to the American people.
>> What McGregor points to at the end is the long version of a problem that the short-term ceasefire deal cannot solve. Turkey and Iran have dominated this region for 500 years by geography, by demographics, and by accumulated institutional weight. Israel is 80 years old and depends entirely on American military power to project force in a region that has, by every measurable indicator over the past 4 months, resisted that power. The American public support for continued involvement has shifted. That difference between what the polls show and what Washington continues to fund is not a small thing. One piece of McGregor's analysis that needs context is the claim about Pakistan and nuclear weapons. He states he suspects, but cannot prove, that Pakistan has informally committed to providing Iran with a nuclear weapon if needed. [music] That is speculative and should be treated as such. What's documented is that Pakistan has served as the primary mediator in every round of US-Iran talks since the ceasefire. Countries that have staked their credibility on a conflict's resolution do not usually do so when they are quietly arming one side. On the strategic petroleum reserve, what he describes as flexibility that runs out in a few weeks is not a rhetorical point. [music] The US has been drawing down reserves consistently since February to keep domestic prices from rising further than they already have. That buffer is finite. The ever lovely attack on June 25th, 9 days after the MOU was signed, tells you something about how the next 51 days of this agreement are likely to go. Drop your take in the comments. Given that Iran struck a UN evacuation vessel 9 days into a signed ceasefire deal, do you think this deal holds or are we heading back toward open conflict before the summer ends? [music] If you want more analysis like this, subscribe. We post the clips the mainstream won't frame cleanly and we break down what matters, not what trends. Now, McGregor starts where he always starts when the situation gets serious, with the hard question of who actually won.
>> First, I want to say something about the larger strategic picture because yesterday evening, I was invited to go into DC and a friend of mine said, "Will you come in and talk to some of my business partners?" So, I said, "Sure." So, I I went in. There were supposed to be three or four people there. There were 40 people. And I said, "What are you doing?" [music] He said, "Well, these are These are all people that we do business with." And I said, "What do you Why do you want me here?" He said, "Well, I want you to talk about the strategic position that we should take." And uh I won't go into detail about their their area of business, [music] but it's an important one. And I said, "Okay, you you ambushed me. I'll give you, you know, the best shot I can for about 15, 20 minutes and then answer your questions." I said, [music] "Okay." So, I started off by saying, "First and foremost, energy, metals, minerals, fertilizer and food are the businesses to be in now. Nothing else. That's where you put your money." And those are everybody saying, "Wow, what about AI?" I said, "AI is a bubble." They said, "What about SpaceX?" SpaceX is a bubble. Let me say once again, you want to be in energy, metals, minerals, fertilizer and food. And they said, "Well, what about this this new new agreement? Is this going to change everything? And how is energy going to return to normal?" I said, "Energy disruption always detonates financial markets. The war is not over. The war is not over. The structure of the world is not yet changed. It's changing, but it has not reset. Will it reset? Yes." So, they said, "Well, then what are you saying? We're we're confused, you know, Has has America lost this war?"
>> [music] >> I said, "Yes. Iran has won the war. The United States has lost the war. [music] Israel has not won the war. It has not yet completely lost the war, but it will. Shortly thereafter, the Israelis will resume the offensive. Iran will respond by attacking Israel." They said, "Oh, no."
>> [laughter] >> They said, "Oh, yes." They said, "Well, what will Washington do?" I said, "Well, I can tell you what Washington will do. The pressure on President Trump to re-engage in support of Israel will be overwhelming. He will be pressured to re-engage." They said, "Will he re-engage?" I said, "Yes, I think he will. He'll probably say, 'Okay, we're going to go in here. We're going to try and help the Israelis.' But then he's probably going to say, 'We can't stay [music] in this.' And whenever he goes in and whatever he does with our armed forces, once [music] it's been done, he's going to say, 'I've done all I can. I can't do anymore.' And then he will begin disengaging." And everyone was in a state of shock. Said, "So, you mean the United States armed forces have lost?" I said, "Yes, absolutely. This was inevitable. There's an old expression, 'A ship is a fool to fight a fort.'" You know, you could have brought the entire United States Navy along with the naval power of all of our allied nations, and we still would have lost. The topography, the geography, all of it was against us. And the Iranians have mastered the real revolution in military affairs. That is, they've linked all the space-based [music] and terrestrially based surveillance, intelligence, reconnaissance platforms to these >> [music] >> thousands of ballistic missile platforms and cruise missiles and unmanned systems. And we can't possibly destroy them all and they can reach all of us long before we reach them. And we engaged thinking that we could do all of this without ground forces and then we decided, well, we we may need ground forces and we discovered something we've all known for a long time. We don't really have an army. We have a gesture, not the real thing. So, everybody was very depressed at this and said, well, you know, where do we go from here? Well, I said short-term, you've got to be prepared for the price [music] of oil to go back up again. Remember we had this the last couple of days we've had this sort of drop in oil prices. And I said that price is down and it's going to go up because people are going to say, my God, the Strait of Hormuz is not really open yet. The Strait of Hormuz is still at risk. We all can't get the energy we need. And they're right. They're going to they're going to find that out. So, it's going to go back up again. Will it ever come down? Well, it's going to it's going to take some time because first of all, you're going to extract all the oil that you can and you're going to put that oil into your strategic reserves. We will do that, the Japanese will do that, the Chinese will do that. Everybody will do that in the in the advanced world. And in the developing world, especially the global south where there were no reserves, they're going to build reserves. So, the demand for oil, the demand for liquefied natural gas, the demand for all the energy that can [music] be created is going to dramatically outstrip the supply. And as long as there is more demand than supply, the price of those things is going to go up. And somebody said, well, what else? I said, well, we we talked about coal, the Indians, the Japanese, [music] the Chinese are all going to run their plants on coal. If you're in coal, you're very smart and you want to deliver as much of it as you possibly can because the world needs it and a lot of that coal will be liquefied. Some of it will be thrown straight into the furnace and burned to power plants, but a lot of it will be liquefied. I said in addition to that, nuclear power is going to be on the agenda and the states which have maintained their nuclear power stations are very fortunate. The French have done that. The Germans are very stupid in their fit of [music] green extremism, they destroyed everything. What what are you going to do? You're stuck. You have to go back to whatever you can find in the meantime. But in the meantime, what you have is all you're going to get because it [music] takes time and capital to build refineries. Takes time and capital to drill. Takes time and capital to mine. These things are all going to be at a premium, which brings me back to my opening statement, which I think I'm going to think I'm going to start a song or something. Energy, metals, minerals, fertilizer, and food are the businesses to be in. You know, just repeat that over and over and over and over again because people need to get it. They need to understand it. Everything else is is a fugazi as uh you know, was [music] mentioned in that movie movie Wolf of Wall Street. Everything else is fugazi, but energy, metals, minerals, fertilizer, and food, that's where you want to be. Now, the last thing and this is very important. The world we live in today is changing and structurally it's going to look very very different in the future because especially in the Middle East, [music] the first thing that you're going to see is that all of the arrangements that we and [music] our British and French allies reached in the Middle East after World War I [music] and then subsequently were reaffirmed only this time largely under American leadership after World War [music] II are all going to disintegrate. All the states that you see today in the Arabian Peninsula really are largely artificial. Before the First World War, yes, you had various Arab tribes that had areas of concentration and influence, but real modern states in the sense that we think of it didn't exist. These states can't protect themselves from determined enemy attack, wherever that comes from. We have now demonstrated conclusively that we cannot protect them. That means that they're going to have to search elsewhere for friends and allies that can help protect them.
>> The picture McGregor draws in that first segment has aged badly for Washington in the 48 hours since this interview was recorded. Three specific things have happened that speak directly to what he just said. First, the Strait of Hormuz is closed again. Iran's IRGC Navy issued a statement warning all vessels to stay clear of the waterway, describing the closure as the first step in response to what Iran's top joint military command called violations of the agreement signed prior. The violation they're pointing to is Lebanon, and that brings us to the second thing, Israeli air strikes have continued in southern Lebanon throughout this week despite the MOU's opening clause calling for an immediate and permanent termination of military operations on all fronts. Lebanese health authorities confirmed that Israeli attacks on Friday and Saturday alone killed more than 145 people, including strikes on Nabatieh and locations in the Bekaa Valley. Hezbollah continued firing on Israeli forces in response. Netanyahu and Defense Minister Israel Katz formally ordered IDF units to hold their positions in occupied Lebanese territory, making clear there will be no withdrawal on any timeline other than Israel's own. It's worth saying clearly, the MOU [music] was signed days ago. The strait is closed again. The follow-on talks have not happened. And Israel, which was not a party to the agreement, has publicly committed to staying in Lebanon regardless of what the deal says. Whether that creates enough pressure to force another US military engagement is the real question. It is the question McGregor has been focused on throughout this interview and his view on the financial consequences of a second round is what he gets into next. Back to McGregor because the second segment covers the strategic petroleum reserve, the pressure on Trump from the people who funded his campaign and where he thinks capital needs to be positioned once the full weight of this lands.
>> First of all, the strategic petroleum reserve is being drawn down very quickly. Depending upon whom you want to talk to, whether it's Steve Hanke, you know, Ray Dalio, any of these people will tell you the same thing. We're drawing that down and we're going to get to the point where we cannot draw it down any further by the fall. Now, that could come earlier. It could come at the beginning of August or end of August. So, that's the first thing. He knows that. All of our refineries right now are operating at peak performance. We have not built a new refinery in over 25 years. So, we can't refine any more than we've already got. People are bringing us their oil to refine, but pretty soon it's going to be very difficult for us to refine the oil and export it. And so, we may see a situation where the president intervenes and bans any more exports [music] because of the position we're in with the strategic petroleum reserve. Those things have an impact. You disrupt the energy markets, financial markets react. He's done a good job of talking people down from hysteria and he's used the strategic petroleum reserve, but he cannot conceal the fact that we were defeated militarily. Can't conceal that. [music] He cannot conceal the draw down in the strategic petroleum reserve. Now, there are ways to work around the strategic [music] petroleum reserve. What are those ways? Well, you have these shadow fleets that move oil in and out of various places and you have alternative ways to get it out of the Gulf. You have the pipeline across Saudi Arabia that I've driven up and down. Goes from east to west over to Yanbu and elsewhere to be tanked up and and moved out. But all of that is very very fragile. And you can only do so much with the alternatives to oil and gas at this point. You can't completely supplant them or replace them. We're not going to suffer as badly as perhaps other countries, but everybody is in a very similar position in that regard. And we've talked about the fertilizer problem, the absence of sulfuric acid, which means that you can't refine a lot of the minerals that you need to, the absence of nitrogen, you can't develop the fertilizer. All of these things continue to plague us. We're we're seeing record bankruptcies in the [music] agricultural sector. He knows that. And finally, he knows that inflation has continued to climb. Wars breed inflation, which is one of the reasons he never wanted the war to begin with. Remember after the first uh sort of 12 days, we had this uh B-2 demonstration of dropping bombs on various things, and President Trump said, "War's over. It's over. We've destroyed everything. It's over. Go home." What happened? Well, Israel wouldn't end the war. Israel insisted on continuing. So, eventually, what's he do? He capitulates and is dragged back in to this very destructive, self-defeating war that Israel has begun. Then we go through this phony pause, phony ceasefire, whatever you want to call it, the on-again, off-again blockade. And now Israel wants to resume the war. Their view is until Iran is reduced to ruins and completely destroyed, there is no victory. And Israel can't survive not destroying Iran. Either Israel survives or Iran survives. But he's come back down and said, "Now, wait a Wait a I didn't sign on for the chaos that you've created. I'm not I can't support unconditionally the mass murder of everyone in the region you don't like. I've covered your mass murder in Gaza. I've covered for your mass murder in Lebanon. I can't cover anymore. Now we'll see what happens. I think President Trump is in a a confrontation with the Israel lobby, its billionaire contributors inside the United States who put him in an in office. I think their demand is clear and unambiguous. They want him to go back and finish the job. That's what the argument is. You got to go back and finish the job. In other words, bomb everybody that's there into the Stone Age.
>> [music] >> He doesn't want to do it. It's not a question of emotional commitment to the people of Iran. That's all nonsense. He doesn't want to do it because it could destroy the global economy. He knows that now. He understands that. He did not understand it when it began. He no one ever briefed him on the probability of the Strait of Hormuz being closed, of our probable inability to reopen it, and the terrible consequences for the world economy. I don't think that was ever made clear to him, but he understands that now. And he understands that that cannot continue. Now we're going to be hit by this tsunami. The question is exactly when and how bad. But then the more important question is is it one tsunami or are we going to go through some more? And that depends on what Washington does and how much influence the the Jewish state really has here in the United States. I think it's pretty substantial, so I think, as I pointed out, we will re-engage. The question is how much and for how long.
>> In this world view that you have, how are you thinking about gold? This economic tsunami that you're outlining that sounds like a recipe for debasement. However, when the world becomes more unstable, there's also a good chance for gold, as opposed to gain in relative value, not just nominal.
>> A good chance? You are the master of understatement. You sure you don't have any English ancestry? The The British are always renowned for their understatement. But, I remember when people said, "Oh, gold will never reach 4,000. Impossible." And then they said, "Oh, it'll never reach 6,000." Listen, we're going to see it hit 10,000. You know, I My point is gold is going to become the currency once again of the realm. Now, is there Is there an alternative to it? Yes, I think you're going to see something like Bitcoin that will be utilized as an alternative to the dollar for transactional reasons, as a way to create and sustain private credit. But, ultimately gold will be the coin of the realm. There's no question about it. So, at this stage, I would say to anybody that's thinking about investing in it, there is no ceiling for for your purposes. The long-term outlook is all positive and and up. [music] And these sort of temporary corrections and then restarts back up the ladder are going to continue. But, where else do you go? There is >> [music] >> There is no better alternative. Well, look, I'm I'm a lot of things, but I'm not a prophet. I think you're probably right, but that's why I bring up Bitcoin, [music] you know, as a transactional means of doing business because it's very hard to move tons of gold gold tonnage from point to point. The Chinese, as you know, have set up vaults for that purpose in Riyadh and Hong Kong so that they can literally physically move the gold around from whatever country has purchased whatever they wanted in terms of petroleum or something else. Gold is effectively the reserve currency. That's clear. Uh the We We still call the dollar the reserve currency, and it will at least in the popular imagination remain that for a while simply because there's so many dollars out there. So much is denominated in dollars and so much business still carries on in dollars, but ultimately it's gold will become the reserve currency.
>> What McGregor is warning about is a sequence, not a single event. The Strategic Petroleum Reserve has been drained to 340 million barrels as of June 12th, the lowest level since 1983, and it has been losing roughly 9 million barrels per week. Energy analysts at GasBuddy warned this month that markets could begin to panic in July or August if the strait disruption continues. That timeline tightens further now that the strait has been closed again this weekend. On gold hitting $10,000, McGregor is making a very large call that most financial analysts would not sign on to yet. The conditions that would need to hold for that to happen include a sustained loss of confidence in the dollar, continued commodity disruption, and central banks losing the ability to manage bond markets. Those things are not guaranteed, but the directional case that real assets become more valuable as the dollar's reserve status erodes is not a fringe position anymore. It is worth tracking seriously rather than dismissing. Whether the next 60 days can change the trajectory depends entirely on whether Lebanon gets resolved and the strait stays open. Right now, neither looks straightforward. [music] Drop your take in the comments. Do you think this ceasefire survives the next 30 days, or is the second wave McGregor is describing already forming? If you want more breakdowns like this, subscribe. We post the clips the mainstream won't frame cleanly, and we break down what matters, not what trends. Thanks for watching. I'll see you in the next one.