Macro analyst Steph Pomboy argues that the Iran war has accelerated the case for hard assets by guaranteeing continued deficit spending and currency debasement, with Trump already requesting another $1.5 trillion for defense.
She views gold’s recent weakness as a classic 2008-style “margin call” phenomenon where investors sell liquid assets (including gold) to cover oil costs and private credit stresses, but sees this as a prelude to a much larger policy-response-driven rally.
While acknowledging green shoots in US manufacturing reshoring, Pomboy believes powerful secular headwinds—fiscal dominance, deglobalization, a hidden credit crisis, and a fragile labor market—will ultimately overwhelm near-term optimism, making the market’s return to all-time highs look like a “buy the rumor, sell the news” setup.
Hard assets and currency debasement: The war guarantees deficits will never shrink; Trump’s immediate $1.5T defense request kills any hope of fiscal restraint, reinforcing the long-term case for gold, energy, rare earths, and commodities.
Why gold sold off during the war: Rather than acting as a safe haven, gold was liquidated to cover margin calls on oil purchases and stressed private credit positions (Turkey, Jane Street, etc.)—mirroring gold’s 2008 pattern of selling off before ripping higher on policy response.
Private credit time bomb: Gated funds are artificially suppressing true marks; if forced to sell, assets would go for pennies on the dollar, and the contagion would hit pensions and insurers first (MetLife CDS remains elevated).
Tax refunds masking weakness: A $40 billion YoY increase in refunds is letting consumers absorb $1.15 higher gas prices without cutting discretionary spending—but this life support ends when refund season ends.
Oil’s asymmetric impact: Oil prices can fall quickly, but the damage to interest rates, mortgage rates, and bond yields is much slower to unwind; Fed cut expectations have collapsed from two cuts to a 50% chance of one.
Labor market disconnect: University of Michigan and Conference Board employment components are at COVID-era lows while BLS data looks fine; multiple-job-holder numbers near record highs suggest BLS is either miscounting or masking low job quality.
Secular headwinds overwhelming cyclical optimism: Deglobalization, dedollarization, fiscal dominance, AI disruption, and a $5 trillion corporate maturity wall create challenges that no single administration policy can offset, even with manufacturing reshoring gains.
Tariffs and Iran as China strategy: Pomboy sees both the tariff war and the Iran action as primarily aimed at neutralizing China—economic warfare to arrest dedollarization and force Xi to the negotiating table ahead of Trump-Xi meetings.
Credit market warning signs: Corporate downgrades now outpacing upgrades even in investment grade (unusual); the weakest BBB and junk segments are underperforming, signaling risk discernment beneath the surface calm.
Bond market reality: IMF just acknowledged Treasuries have lost their safe-haven premium; foreign central banks reduced holdings at the Fed by ~$100 billion since the war started, likely needing dollars for oil.
Emerging markets opportunity: Younger demographics, less debt, many are creditor nations and resource-based—potentially better positioned as deglobalization unwinds the “US sneezes, world catches cold” dynamic.
Portfolio positioning: Still heavy in gold and energy (bought for AI power demand thesis, not war); not trading around short-term moves; emphasizes “never lose position in a bull market” and turning off screens.
Copper as the next hard asset story: Supply-demand imbalance from bringing 1-2 billion people onto the grid, AI-driven power generation buildout, and outdated US electrical infrastructure all point to structurally higher prices.
Kerry Lutz and John Rubino discuss why gold and silver counterintuitively dropped when the Iran war started (margin calls and central banks like Russia and Turkey selling gold to pay bills) then rallied on the ceasefire, though they view these short-term squiggles as noise against a backdrop of runaway deficit spending that guarantees long-term precious metals strength.
Their biggest concern is the private credit/shadow banking crisis quietly unfolding, which Rubino argues could be far bigger than the 2008 subprime meltdown because the shadow banking system is much larger and more opaque, with obscure funds gating withdrawals every couple of weeks. They also debate whether MAGA has betrayed its anti-regime-change promises with actions in Iran, Venezuela, and Cuba, and speculate about potential US intervention in Mexico to secure silver supplies given that 25% of global silver comes from there.
Gold/silver price action explained: The war-start selloff was driven by margin calls forcing sales of liquid assets, plus central banks (Russia, Turkey) dumping gold to pay war-related bills; the ceasefire bounce reflects reduced forced selling rather than any fundamental change.
Long-term metals thesis intact: Regardless of short-term geopolitical swings, massive deficit spending by overindebted countries guarantees currency debasement, eventually forcing a currency reset and likely a return to some form of gold standard.
Iran war not over: Lutz predicts a Vietnam-style Plan B where the US trains Kurds, uses proxies and mercenaries to pursue regime change, which Rubino warns would be financially catastrophic—pushing deficits from $2 trillion toward $3.5 trillion with compounding interest costs.
MAGA civil war: Rubino feels betrayed as an original Trump voter, arguing neocons are taking over a movement that explicitly ran on ending regime change wars, with Trump, Vance, and Gabbard having campaigned on that promise.
Private credit crisis is larger than 2008: The shadow banking system dwarfs the subprime mortgage market; every couple weeks obscure funds gate withdrawals or have partners bail out investors, and nobody knows where the bad paper is concentrated.
AI vendor financing circularity: AI companies are doing circular deals—one gives another $100 billion, who then promises to buy $100 billion in chips—a daisy chain that works only until one link breaks, and the AI companies are what’s holding up the NASDAQ and the broader economy.
Hidden bailouts likely already happening: Lutz argues the Fed is probably doing backdoor bailouts now that are invisible to the public (unlike 2008’s visible foreclosures); suggests Powell is being kept on to absorb political heat before a clean replacement arrives.
Political limits on bailouts: Rubino counters that with US debt at 120% of GDP, deficits over 6%, and interest costs at $1.2 trillion and rising, visible bailouts of shadow banking would be “catastrophically unpopular” and politically untenable.
Iceland model as alternative: Rather than bailing out firms like Goldman Sachs, Iceland protected depositors and jailed the bankers—Rubino argues this would have left the real economy intact while teaching crucial lessons about risk.
Potential US intervention in Mexico: Every country is adding silver to critical minerals lists; Mexico produces 25% of world silver; cartels control Mexican governance; the US has invaded Mexico 15 times historically, and Trump might act if cartels threaten silver supply.
Cartels and US complicity: The cartels exist largely because of US drug demand and the previously wide-open border, so any coherent Mexico strategy needs to address both supply and demand sides.
Venezuela, Cuba, and regime change creep: Rubino questions why Marco Rubio is effectively running multiple countries’ affairs; argues communist countries eventually self-correct (Vietnam being the prime example of a former enemy becoming a capitalist country modeling itself on the US) if simply left alone.
Investment stance: Time for caution—avoid growth stocks, tech, bank stocks, and government bonds; stay in real assets and commodities that aren’t directly exposed to the brewing credit unwind; Rubino says he’d buy even more gold if proxy-war regime change proceeds.
Legendary investor Rick Rule explains why he sold 75-80% of his physical silver in January (a parabolic “hockey stick” move signaling the end of the hate that first drew him in) and redeployed into silver equities, oil stocks, and physical gold—a trade that has worked out well.
He believes we’re entering a primary bull market in natural resources that could last 5-10 years, with the US dollar likely to lose 75% of its purchasing power over the next decade while gold maintains its value.
However, Rule is unusually cautious near-term, actively building cash because he sees real stresses in private credit markets, an ongoing recession, and the possibility (not probability) of a 2008-style liquidity collapse if the Iran war drags on and high-yield ETF redemptions cascade.
Why he sold silver: Silver had shifted from hated (under $20, overwhelmingly negative sentiment) to loved via a parabolic move to the $80s; silver equities were pricing in $45 silver, offering better upside and downside protection than the metal itself.
Capital redeployment: 50% went to silver equities (Wheaton Precious Metals, Pan American Silver, Fresnillo, Buenaventura, Aya Gold & Silver, and a major private placement in Ross Beaty’s Alumina Metals in Poland), 25% to oil stocks, 25% to physical gold.
“Buy hate, sell love” philosophy: Rule invests based on the gap between enterprise value and net present value, not price projections; he’s not a momentum or trading investor and thinks in 5-year timeframes.
Where hate exists now: Commodity-centric stocks broadly lack hate, but he sees opportunity in the Middle East (Turkey, Saudi Arabia), sulfide nickel, and politically challenged jurisdictions—his best returns historically came from “risky” places like DRC, Sudan, and post-Shining Path Peru.
Saudi Arabian exploration: Rule is backing prospect generators and seed-round exploration companies on the Arabian Shield following reforms to Saudi mining law, hoping to compress the typical 10-year discovery timeline.
Gold stocks opportunity: Would be buying high-quality small-cap gold miners if not worried about US liquidity; notes a wave of accretive M&A coming (cites the G2/G Mining deal done at 70% premium), with multi-asset producers acquiring single-asset producers for synergies.
Credit market warning: Real stresses in private credit combined with high near-term rates could trigger a liquidity collapse if mom-and-pop high-yield ETF holders start redeeming—he stresses it’s a possibility, not probability, but severe enough to warrant precaution.
Building cash aggressively: Defines cash as CDs, money market funds, short-term Treasuries, and gold (which he proved to himself functions as liquidity in 2009-2010); 2009 was his best investing year because he had cash and courage when others didn’t.
Oil shock thesis: Current $100+ oil reflects anticipated shortage, not real shortage—the world has been running on floating inventory and strategic stockpiles; Omani crude FOB south of Hormuz is already selling at WTI +$40, suggesting real prices closer to $142 if the war continues another 2-3 weeks.
Not selling oil equities yet: Three-year price targets were hit in three months, but Rule expects these prices to return in 2029-2030 anyway due to the industry deferring ~$365 billion/year in sustaining capital investment.
10-year macro outlook: Expects USD to lose 75% of purchasing power; gold maintains purchasing power (nominally much higher); silver and silver stocks outperform for speculators; copper must be rationed by price starting late this decade.
Copper supercycle: 30 years of underinvestment in exploration, construction, and production means nothing short of a “synchronized global depression” can balance supply and demand—existing long-life producers and new tier-one discoveries will command “eye-popping premiums.”
Upcoming events: Copper boot camp featuring Robert Friedland (financier behind Oyu Tolgoi and Kamoa-Kakula) and Steve Enders (former worldwide exploration head for Phelps Dodge and Newmont); Rule Symposium in Boca Raton in July.
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