Last night, Donald Trump had the same lack of conviction in his speech as Colin Powell had in his all those years ago when he lied to the UN.

At least Trump was lucky last year, when Iran let him (and Israel) off the hook. This year, it’s different.

I won’t walk you through the entire speech, not just because it was a very un-Trump-like monotonous and boring, but because The Kobeissi Letter summarized it perfectly on this chart.

As I write, S&P futures are down another 30 points.

The Rug Pull is Real, Folks

What most people seem to have forgotten is that the end of the first quarter of 2026 was two days ago. The market was picking up because the President was talking it up. Why? Because it made the Q1 losses far more palatable.

Now that that’s out of the way, we can resume thinking properly.

I believe the President when he says he won’t open the Strait of Hormuz. But if you’re thinking, “Good, let the Europeans and Asians do it!” I’ve got news for you.

First, you shouldn’t be so harsh on Europeans. In fact, I gleefully remember my favorite Veep saying this last year:

I think a lot of European nations were right about our invasion of Iraq. Frankly, if the Europeans had been a little more independent and a little more willing to stand up, then maybe we could have saved the entire world from the strategic disaster that was the American-led invasion of Iraq…I don’t want the Europeans to just do whatever the Americans tell them to do. I don’t think it’s in their interest, and I don’t think it’s in our interests, either.

Second, the concept of Freedom of Navigation is relatively new. (I’m covering the subject in greater depth for today’s Morning Reckoning in a few hours.) The Europeans and Asians will pay the toll. It’s that simple. 

They won’t engage in war, that’s for sure. If they won’t do it when America is by their side, they won’t do it without America.

In the long term, Europe will run begging to Russia to reopen Nordstream (at Europe’s expense), and Russia will happily provide pipelined oil and gas to Europe… in exchange for American airbases to be closed permanently. Give it five years or so, but it’s inevitable.

Let’s face it: if the Biden administration forced Nordstream to close (we remember that press conference, don’t we?) and then the Trump administration allowed LNG shipments to be rerouted from Europe to Asia, then, sadly, Russia is the more reliable energy provider for Europe. Sorry, not sorry.

That leaves America with a mess.

What Was It All For?

On the surface, the USG claimed it was going to war to free Iranians. From where I’m sitting, the Iranian people have done the complete opposite of “rising up.” It seems they’ve “battened down.” Strike one.

Next, it was about Iran’s currently nonexistent nukes. But honestly, if I were them, I’d adopt the Kim Jong Il Method of Avoiding American Bombings™ by building one. And if you think the rest of the world isn’t frantically trying to do this, well, just look at the Brits. Even they want their own nuclear deterrent. Strike two.

Then it was a case of taking their oil, as the USG did in Venezuela. America could be the steward of the Iranian oil supply. Except Iranians in government don’t seem to take bribes the same way Venezuela’s politicians do. Or, perhaps they’re worried about eating a missile at the drop point. Strike three.

Now, it’s become a case of saving face. If those ungrateful Iranians won’t kill their leaders, the USG would commit the Geneva Convention-prohibited war crime of decimating their civilian infrastructure. Or, as the eloquent Secretary of War says:

To be fair, he didn’t post this on his official account. Credit: @PeteHegseth

There must be a 4D-Chess way this helps Iranians that I’m missing.

Whatever’s going on, The Economist nailed it with this one-liner:

Although President Donald Trump says he has “destroyed 100% of Iran’s Military Capability,” the 0% that remains is playing havoc with the global economy.

What to Do Now

First, we’re going to have the mother of all recessions in the autumn. We’ll have a massively reduced supply of oil, LNG, helium, and fertilizers. As I wrote a few days ago, The Cavalry Isn’t Coming. Please take at least some advice from that piece and run with it.

Second, as my friend and colleague Matt Badiali wrote in the Rude last week, costs will be higher for longer. Even if you’re in America, you’ll still be hit with higher costs next winter. In that vein, I’m getting my local bricklayer to build me a rocket mass heater to keep my old house warm next winter. Look them up. What’s old is new again.

Third, as the hardest-working man in the newsletter business, Dan Amoss, succinctly put it in our editorial channel, “Trump just said we’re gonna finish the job, gents. Long oil, short SPX.” I agree: energy will get prohibitively expensive.

Expect the general market to fall off more. I’m already bearish on the SPX and Nasdaq, and I think the Nasdaq will get ugly once the helium shortage moves front and center in the semiconductor industry.

As for gold and silver, they’re down big this morning (3% and 5%, respectively), as a result of the President’s speech. I’m not convinced the Gulf nations are done selling gold. And when silver bulls tell me “the macro picture hasn’t changed,” I wonder how it couldn’t when oil is painting the picture.

Wrap Up

The Donald is leading the country to an expanded war and its economy off a cliff. The best time to prepare is right now.

I wish I had better news for you. But we’ve got to play the cards we’re handed. Not the ones we wish we were dealt.