I come this morning bearing grave tidings.

Two years ago, I wrote a piece titled "The Terrorist Attacks of 2025." As of today, I fear I was off by only a year.

Prop up the stock market and talk down the oil market while you’re at war in the Middle East? I get that. I’d be doing the same thing if I were in the Oval Office. However, my friends wouldn’t be profiting so handsomely from my X posts… which is why I’ll never be a high-ranking politician.

Here’s what I’m thinking today, in light of a busy overnight session, not so much in the markets, but in America, herself.

The Curious Incident of the Dog in the Night Time

You may remember the Sherlock Holmes story, Silver Blaze, in which the dog that didn’t bark gave Holmes a clue as to who the guilty party was. It’s one of my favorites. 

Last night, while most of America was asleep, the Great Plains lit up.

Two new wildfires exploded in Nebraska's Grant County — the Ashby and Minor fires — torching roughly 75,000 acres and forcing the evacuation of the villages of Hyannis and Ashby. These aren't isolated blazes. They erupted near the still-smoldering scars of the Morrill Fire, which earlier this month became the largest wildfire in Nebraska's recorded history, devouring over 600,000 acres. Four National Guard Black Hawks are now dropping water on the Ashby Fire while air tankers chase the Minor.

Iowa has deployed Guard resources to help while dealing with its own fire at the Hawkeye Pride Egg Farm near Corwith.

Meanwhile, down in Port Arthur, Texas, the Valero refinery, one of the largest in the country, processing 435,000 barrels per day, blew up Monday night. The fire's out now, but the diesel hydrotreater unit is damaged. In a normal world, that's a bad week for one refinery. In this world, it's a body blow to a fuel market already on its knees.

Arson? Terrorist attacks? We don’t know for sure. But there’s no barking dog. As in, the media is quite silent over what should be huge stories. Perhaps I’m reading too much into it. But to mix my literary metaphors, I remember Ian Fleming:

The first time is happenstance.

The second time is coincidence.

The third time is enemy action.

There are simply too many people remaining in America who crossed the border without identification.

If that weren’t worrisome enough…

The Supply Chain Isn’t the Problem

The narrative is wrong.

Everyone keeps saying "supply chain bottlenecks" like it's 2021… like some shipping containers are stuck off the coast of Long Beach. That's not what's happening. The problem is physical supply collapsing in real time.

Qatar's LNG halt isn't a shipping delay. It's 12 million tonnes per year of capacity that may not come back for 5 years.

Helium isn't stuck in a container somewhere. It's not being produced because you can't extract it without LNG processing.

The Valero refinery isn't "temporarily closed for maintenance." It was damaged during a geopolitical emergency that has already pushed energy prices to multi-year highs.

The supply chain works fine when there's something to ship. Right now, the stuff itself is disappearing: 20% of global LNG is offline, 33% of global helium is wiped out, and 435,000 barrels a day of U.S. refining capacity is compromised.

The French government alleges that 30-40% of the Persian Gulf's energy infrastructure has been destroyed.

If you want a sneak peek of what’s to come, check out Australia, New Zealand, South Korea, Vietnam, and India, among others. The recession, when it arrives, may not be as severe in America. But, my goodness, will it be costly!

Again, the problem isn’t logistics. The problem is the one thing economics was created to solve: scarcity.

Equity is Asleep at the Wheel; Bonds are Screaming

Equities are treating all this like it’s just another Friday.

The bond market disagrees, loudly.

The 10-year Treasury yield trades around 4.46% as I write, up almost 50 basis points since the war in Iran began. Two-year yields climbed above 4.019%.

Yesterday’s 7-year Treasury auction was weak. Primary dealers took in 12.4% of the total new issue, the largest takedown since November last year, compared to an average of 11.5%. The figures suggested a low appetite for the latest note, so primary dealers had to step in and absorb the remaining supply.

Bond volatility has spiked to levels consistent with past episodes of genuine market distress. The TLT ETF has been hammered since the war began. Private credit is a disaster zone.

The disconnect is classic. Stocks are pricing in a soft landing. Bonds have priced in inflation plus growth deterioration. One of them is right, and history is unkind to the optimist when the physical world is on fire.

When bonds scream, and equities sleep, someone is about to get run over by the wake-up call. My guess is equities, but not until someone on the buy side screams, “UNCLE!” 

What You Can Start Doing About This

Be Near Family

I can’t tell you how relieved I am that my immediate family is right here. My parents, wife, and kid are all within a few feet, and my little network of friends here is just a WhatsApp away.

Thanks to the upcoming food shortages, whether they're due to not growing enough or not being able to transport it, you need to be near those who will help you out. Community will matter more over the next few years than it ever has in our lifetimes.

Stash Cash

Do NOT go to the bank and withdraw $10,000. The bank will flag you to the Feds and ask you all sorts of questions. And then they won’t give you the money. The weather’s up, but the storm isn’t here yet.

Take a hundo or two every week and stash it in a false book on your shelf. Or maybe a music box with a false bottom. Or maybe a wall or floor safe. Never tell anyone but your spouse. You may need it when you least expect it.

Hold Gold and Silver

Don’t sell your precious metals now. Hopefully, you won’t need to at all. But if you hold physical gold or silver, keep it in a safe place (or places) on your property that no one knows about except your spouse.

Keep Crypto

If you have crypto, keep it in cold storage in a safe place. The online exchanges will see some stress over the coming months. Read everything Chris Campbell and James Altucher write about crypto. In the great words of Gandalf the Gray, “Keep it secret. Keep it safe.”

Quietly Stock Up

Canned food and toilet paper will still be aplenty over the next few months. Getting a few extra here and there is fine. But I vividly remember what the bastards did during COVID. They banned medicines and supplements that do a world of good and have little to no side effects.

I’m not a physician, as you know, so plug this stuff into your AI and learn all you can about them: creatine and taurine (especially taken together), NAC and glycine (taken together), essential amino acids, and my personal favorite: ribeye steak and capers. Also, learn about Jerusalem artichokes and bacopa monnieri.

Start a Side Hustle

You have a special skill. I don’t know what it is. You may not yet, either. Get on ChatGPT to brainstorm. Upload your CV and tell it your skills. You won’t believe the ideas it’ll spit out. Maybe one or two will stick. Then build on the idea and build your own business. By the time the world’s problems come home to roost, you may have created another income stream.

Rude reader Carl H. asked how you can learn. I’d do these: if you’re not a coder but want to learn how AI can work with your computer, take this course. If you’re a bit more advanced, take this course.

Second Passport

If you can obtain a second passport through marriage or heritage, I’d start the process as soon as possible. You never know when it will come in handy. I’d hold off on paying for one by investment unless you’re an ultra-high-net-worth individual and can hire a lawyer to help you through the process quickly.

Wrap Up

To paraphrase Kipling, keep your head about you when others are losing theirs.

Quietly start to protect yourself. No panicking. No buying 10,000 toilet rolls. Just be smart. Stash away some cash. Secure your physical gold and silver. Plant some good crops this year. Buy emergency pharmaceuticals. Make sure your car is inspected and ready to go.

A little forethought will go a long way when the real deal comes a-callin’. The soft landing has been canceled. The cavalry is taking this crisis off. But you’ve got time to prepare, and plenty of it.