Jay Martin argues that newly confirmed Fed Chairman Kevin Warsh inherits a closing trap: with the Strait of Hormuz shut for over 12 weeks, roughly 20% of global oil off the market, oil above $100/barrel, and core PCE inflation at its worst since 2022, he faces three doors with no fourth option. Door one (raise rates Volcker-style to defend the dollar) would quadruple the over-$1-trillion interest bill on $39 trillion of debt because federal debt is now 122% of GDP versus only 30% in 1980, causing a fast economic death; door two (print dollars to absorb unwanted Treasuries) kills the currency slowly through inflation; door three (retreat from Iran) destroys American credibility and reserve-currency status. Martin’s core thesis is that every central banker in history, faced with a fast death versus a slow death, chooses the slow death every time, so Warsh will open door two and save the bond market by debasing the dollar, meaning investors should position now in hard assets, commodities, gold, and energy.
The 1907 panic and the Fed’s founding mission: J.P. Morgan personally rescued the U.S. financial system from his Madison Avenue library, coordinating roughly $25 million in emergency loans and deciding which trusts lived or died after Knickerbocker Trust paid out $8 million and locked its doors. The Federal Reserve Act, secretly drafted at Morgan’s Jekyll Island club in 1910 and signed in 1913, was built to do on demand what Morgan did by hand.
Money creation by keystroke: Unlike Morgan, who moved real gold and deposits, the Fed creates dollars out of thin air by typing them into commercial bank accounts, with no printing press and no gold backing, only a promise of value. Every panic since 1913 has added to a “leaning tower” of keyboard-created dollars resting on an unspoken agreement that everyone keeps accepting them as wealth.
The $9.4 trillion Treasury threat and swap lines: Foreign governments hold roughly $9.4 trillion of U.S. Treasuries, and oil-starved nations are being forced to sell them, pushing rates up. The UAE, holding $95.6 billion in Treasuries, threatened to crash the bond market and instead got an emergency currency swap line; Martin warns that adding volatile borrowers like Argentina (nine defaults in 200 years) leads to “amend, extend, and pretend,” where created dollars stop vanishing and start accumulating.
The Volcker precedent and why door one is unaffordable: Paul Volcker raised rates to 20% in 1980 to crush 11%-plus inflation, causing two recessions, nearly 11% unemployment, mass farm bankruptcies, and death threats requiring Secret Service protection. The economy survived only because debt was 30% of GDP then, whereas today’s 122% ratio and leveraged housing, commercial real estate, and corporate debt make a repeat catastrophic.
Reserve currency rests on projecting force: The dollar’s premium depends on the belief that the U.S. can project force globally and back its commitments, so a forced retreat from Iran would prompt Beijing (watching Taiwan) and Moscow (watching NATO) to update their estimates. Martin frames all alternatives, including taxes, default, or restructuring, as mere subvariants that either create dollars, destroy them, or remove pressure, hence “no fourth door.”
Doomberg argues the world is in the late stages of U.S. global supremacy, moving toward a multipolar order formalized by the Putin-Xi strategic document signed in Beijing that overtly targets removing U.S. dollar hegemony, and he frames the wars in Ukraine (since 2014) and Iran as battles in a single larger conflict. He contends a sovereign debt crisis is the predictable apex of the dollar system, with U.S. Treasuries, British gilts, and Japanese debt reaching mathematically unserviceable rates, making the eventual outcome “printer goes brrr,” Fed debt extinguishment, and a global debt jubilee that is long-term extremely bullish for gold. He admits Doomberg got the oil call wrong (would have taken the over on $150) because the 2025 production glut was far larger than disclosed, with China secretly stockpiling an extra million to 1.5 million barrels per day, and he predicts oil falls sharply (“look out below”) if the war doesn’t reignite and Hormuz reopens.
Multipolar pivot and dollar hegemony’s end: The Putin-Xi Beijing meeting produced a historic strategic document on a “new multipolar framework” with overt steps to remove the dollar from global trade, which Doomberg ties to China drawing a line on U.S. sanctions. He views the Trump and Putin trips to China as one continuous event signaling the late stages of U.S. supremacy.
Sanctioned-country resiliency as an asset: Doomberg argues that when the system collapses there will be no safe havens except the most sanctioned nations, Iran, Russia, North Korea, and China, because sanctions forced them to build resiliency. Iran, after roughly 40 days of U.S. and Israeli bombing, has outperformed expectations with advanced drone and missile technology and a head start on the multipolar world.
U.S. missile shortage and no military solution: Doomberg claims there is no military solution to the Hormuz situation, evidenced by being on day 80 with the strait still closed, and that the U.S. needed and asked for the ceasefire due to a missile shortage flagged for over a year that the Chinese and Russians already know about. He warns that if war reignites, Iran is likely to target European countries hosting American aircraft, exposing inadequate European missile defenses.
The oil glut, mispricing, and downside risk: Doomberg concedes the firm got oil wrong because, per Jack Johnson of Market Vibes, “everybody lies” in oil and 2025’s glut was massively understated, with prices heading toward $30 before the war. He argues burning off excess supply at $100-$110 is healthier for the industry than $30, but sees huge downward pressure ahead as new supply arrives, especially if a Korean-style ceasefire reopens the strait.
Canada’s resource wealth and the Carney pipeline call: Doomberg is bullish on Canada, arguing it cannot be “broke” with only 30-40 million people sitting on enormous uranium, oil, gas, water, and timber reserves, and that the Carney-Smith memorandum means the Alberta pipeline gets built. He frames the manufactured “sovereignty crisis” (called early in their “Alberta Clipper” piece) as cover for Carney to undo carbon policy, much as only Nixon could go to China.
Dave Collum is a professor of organic chemistry from Cornell University. He joins entrepreneur, co-host of the YouTube show Doug Casey’s Take Matt Smith to discuss the idea of narratives, parallels between 2020 and now, supply shortages, expansion of the war, Kevin Warsh, academia, and much more.
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