Luke Groman argues the US is trapped between Scylla and Charybdis — it must choose between saving the dollar or saving the Treasury market, with the Iran war and closure of Hormuz accelerating a sovereign debt crisis where true interest expense already equals roughly 100% of federal receipts. He contends the base case endgame is the US declaring victory and going home while Iran runs a tolling operation on Hormuz, permanently discrediting the US defense umbrella and pushing the world toward a multipolar system where gold re-enters as the neutral reserve asset, with a Nash equilibrium of pegging gold to oil at 500-1,000 barrels per ounce. Groman projects gold reaching $15,000-$22,000 (3-5x) over five to six years as reversion to historical norms relative to foreign-held Treasuries, with 10x ($50K+) possible in a genuine dollar crisis, while the US is already de facto settling part of its trade deficit with China in gold.
The Scylla and Charybdis of dollar vs. Treasury market: True interest expense in the US is roughly 100% of federal receipts, and foreigners hold $27 trillion in dollar assets including ~$8.5 trillion of Treasuries plus ~$13-14 trillion in dollar-denominated debt, forcing policymakers to either weaken the dollar (driving inflation) or let yields rise (triggering a debt spiral). The MOVE index hit 115 in late March, approaching the 120-130 intervention threshold.
Stealth liquidity injections and the playbook to save bonds: Since March 27, 2026, authorities have used Treasury buybacks (swapping long duration for short), Fed “reserve management purchases” of short bonds, swap lines (like the UAE deal), jawboning fake peace deals to knock down yields, and proposed SLR changes that would let banks buy Treasuries without counting against capital ratios. Groman expects outright QE only as a last resort.
The Iran miscalculation and Hormuz endgame: Groman believes the administration miscalculated based on Venezuela’s easy outcome, with 30 of 33 Iranian missile sites on the Hormuz coast still functional after two months; the likely resolution is the US declaring victory while Iran runs a toll operation, possibly pricing some energy in yuan. Wheat just went limit-up because 48-78% of American farmers can’t get enough fertilizer, and oil tank bottoms in Europe and the US arrive by late June/early July.
Gold revaluation to $15,000-$22,000 pegged to oil: US official gold as a percentage of foreign-held Treasuries is 13% versus a historical 40-60%, implying a 3-5x rise, with 1980’s 130% ratio implying a 10x move in a true dollar crisis. The endgame Nash equilibrium pegs gold to oil at 500-1,000 barrels per ounce, with Groman’s 5-year base case showing DXY in the 60s, gold over $10,000, the 10-year at 3.5-4%, and yuan at 4-5 per dollar.
Bitcoin downgraded and US already paying China in gold: Groman sold most of his Bitcoin at ~$96,000 (23-24 ounces of gold per BTC) in November 2025 because it’s been trading like a software stock (correlating with IGV ETF) rather than as a neutral reserve asset, though he maintains a long-term $200K+ view. Meanwhile, non-monetary gold has been the single biggest US export for 5 of the last 6 months — bigger than jet engines, autos, and pharmaceuticals — flowing to China, Hong Kong, and Switzerland, meaning the US is de facto settling its trade deficit with China in gold.
David Hunter maintains his S&P 500 target of 9,500 and believes a parabolic meltup is underway that could top by July or Labor Day 2026, after which a global deflationary bust in 2027 will trigger an 80% bear market and force the Fed to print upwards of $20 trillion (with central banks globally printing $50 trillion or more). He calls for the 10-year Treasury yield to fall to 3% then 2.5% this year and to zero in the bust — marking the final secular bull market top in bonds — while gold reaches $6,800 and silver $180 (with Michael Oliver’s $300-500 silver target not ruled out). Hunter is bullish on Iran resolving quickly because the US and Israel hold the cards, dismisses inflation fears, and expects oil to crash from $100 to $70, then to $50-60, and ultimately $30 in the bust.
Parabolic meltup with S&P 9,500 target by July: Hunter sees the market in its final meltup phase after the March-April correction (which took the S&P down ~9-10%), with NASDAQ and possibly S&P targets likely needing further upward revision. He expects a top this summer, possibly by Labor Day, ending a 44-year secular bull market.
Iran resolution and oil collapse: Hunter expects Iran resolved within days, weeks, or a month or two — not extended like Iraq or Afghanistan — with oil falling sharply into the 70s, then 60s and 50s, and ultimately to $30 in the 2027 bust. He believes the US and Israel have already taken out Iran’s navy, air force, and much of its drone and missile capability.
Fed dynamics and Kevin Warsh’s constraints: Hunter sees very low probability of rate hikes despite hawkish voices like Kashkari, expecting Warsh to want to shrink the Fed balance sheet (down from $9 trillion to $6.5 trillion) but to be forced into massive QE by the 2027 bust. He warns the bigger risk is the Fed “fighting the last war” and being too slow to print, exacerbating the downturn.
Gold $6,800, silver $180, and miner upside: Hunter raised gold targets in stages from $5,500 to $6,800 and silver from $100 to $125 to $180, with SILJ (junior silver miners) targeted at 90 from low $30s (nearly a triple) and GDXJ targeted at 250 from $125-126 (a double). He doesn’t rule out Michael Oliver’s $300-500 silver call.
2027 deflationary bust and $20 trillion in QE: Hunter expects a global bust worse than 2008-09 due to leverage in private credit, private equity, pension funds, junk bonds, and real estate, requiring $20 trillion in new Fed QE and $50 trillion globally. He sees the 10-year going to zero, 30-year to a quarter or half percent, marking the final secular bull market top in bonds before a multi-decade bear market driving rates back to 20%+.
Gary Shilling, who called the 1969 recession, 2008 financial crisis, and 1970s inflationary era’s unwinding, argues the current market rally is built on speculation rather than fundamentals — with consumers retrenching, weak capital spending, and no trade bonanza supporting equities — and forecasts a 20-30% correction tied to a deep recession in 2026. He recommends a risk-off defensive posture: long Treasury bonds, out of stocks or short major indices, with the 10-year at 4.46% still attractive as a safe haven. Shilling favors India over China long-term due to India’s unlimited population growth, technology orientation, and inherited British legal system, while China remains constrained by its property collapse, failed post-one-child-policy demographics, and top-down manufacturing focus.
Speculation-driven rally with no fundamental support: The S&P is up 15% in roughly six weeks since the mid-period trough, but Shilling sees nothing solid supporting equities — consumers are retrenching, capital spending is weak, and there’s no trade bonanza. He characterizes sentiment as euphoric and at the upper end of the spectrum.
20-30% correction tied to a 2026 recession: Shilling expects a considerable recession and equity selloff, with the trigger likely being wealthy consumers pulling back spending after a stock market hit, since spending by those with money has been propping up the economy. He notes the easy explanations are often not the correct ones.
Defensive positioning: long Treasuries, short stocks: Shilling’s monthly Insight newsletter recommends being long Treasury bonds, out of stocks or short major stock indices, and cautious on other investments — though he concedes the Treasury case is “less certain” than it was a couple weeks ago given recent yield action. He still believes the safe-haven effect will ultimately matter.
China-Trump deal likely focused on agriculture: Among Kalshi’s listed possibilities (soybeans, US oil, aircraft, rare earths, tariff reduction), Shilling sees agricultural products — especially soybeans — as the most likely meaningful outcome because the US has plenty of supply and China has the demand. He views China as constrained by its property collapse and disinterest in supporting domestic consumer spending.
India over China on demographics and technology: Shilling favors India for its unfettered population growth (China’s one-child rescission failed to boost births), its technology orientation versus China’s manufacturing focus, and its inherited British legal system. He views China’s top-down control and export-dependent model as lacking long-term appeal, calling contrarian correctness — not consensus correctness — the only way to add real value.
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