Bad Moon Rising: World in Emergency

The legacy world order is collapsing so what comes next?

Good Morning - War against Iran is a blunder after which the world will never be the same. In truth, the “rules based order” was dying a thousand deaths long before US-Israeli strikes commenced end-of-February. Lost control of the Straits of Hormuz (SOH) to the Iranian Revolutionary Guard Corps (IRGC), the destruction of US Military (USM) bases across the Middle East (ME) and the inability of America to protect its Gulf allies represent the irreversible denouement of American Primacy.

Since 1999, the world has tiptoed into a new world order, one unrecognized by Western elites, understated by the Global South, and utterly denied by the flailing Trump White House. Now a tiptoe will become a sprint.

A brief timeline of events below shows an advanced global transition entering its final stage:

• 1999 - China enters the World Trade Organization (WTO). In 2005, China was 10% of global industrial production while the West (US plus Europe) was 40%. Today, China is +30%, more than the US and Europe combined, and rising fast

• 2001 - Eurasia creates the Shanghai Cooperation Organization (SCO), the world’s largest international security organization

• 2002 - China launches the Shanghai Gold Exchange (SGE), the first major challenge to the Western gold complex anchored by the London Bullion Market Association (LBMA) and the Commodity Exchange, Inc. (COMEX)

• 2008 - Following the Global Financial Crisis, rescue packages under the Trouble Asset Relief Program and Quantitative Easing (QE) effectively merged Washington and Wall Street into a singular state-owned-corporate entity. As a result, DC underwrites Wall Street moral hazard

• 2009 - First BRIC Summit meeting in Yekaturinburg, Russia (South Africa joined 2010). BRICS is the most significant non-Western alliance at least since the Non-Aligned Movements (NAM) and probably unprecedented

• 2010 - Portugal, Italy, Ireland, Greece, Spain (PIIGS) sovereign debt crisis eventually culminates in Real-Time Gross Settlement (RTGS) under Target-2. Bundesbank (German tax payers) backstops the European Central Bank (ECB) and European Union (EU) members, including fiscal delinquents France and Italy

• 2014 - China expands SGE to Shanghai Gold Exchange International and begins the decade plus secular trend of selling US Treasuries (USTs) in exchange for Gold and energy

• 2019 - Federal Reserve (Fed) halts “Balance Sheet Normalization” to stop Repurchase Agreement (REPO) stress from sparking another global banking crisis. Fed “offered up to $75 billion in overnight repo” to reliquify banks saturated with Treasuries but short liquidity

• 2020 Covid - Global lockdowns create a historic demand shock while Central Banks (CBs) around the world led by the Fed recklessly print helicopter money to forestall global recession

• 2022 Spring - Russia launches Special Military Operation (SMO) and Euroclear freezes Russian assets, NATO responds with proxy war in Ukraine and the Global South refuses to isolate Russia

• 2022 Summer - Fed and CB’s around the world begin historic rate hikes to combat structurally higher inflation unleashed by post-Covid QE

• 2022 Fall - UK nearly defaults as Bank of England pauses rate hikes and deploys the Asset Purchase Facility to bailout UK pension funds. Prime Minister Liz Truss is forced to resign; markets dub the incident a “Liz Truss Moment”

• 2023 - 48 hour collapse of Silicon Valley Bank kicks off a regional banking crisis caused by rising rates and falling Treasury bond prices. The Fed launches the Bank Term Funding Program (BTFP) and JP Morgan absorbs First Republic to stop contagion

• 2024 - Yen Carry Trade unwinds as the Yen collapses and Japanese Government Bond (JGB) interest rates move structurally higher. International lending denominated-in-Yen begins to repatriate to Japan and away from Western sovereign bonds

• 2025 - Trump’s “Liberation Day” tariffs sparks a selloff in dollars, stocks and Treasuries. For the second time this decade (2022) 60:40 portfolio fails, indicating a new investment era has begun and further shifting global investment from West to East

• 2026 - Iran repulses unprovoked US-Israeli strikes and and declares all out war. The Global South anchored by a strategic alliance between Iran, Russia and China rigidifies and war engulfs the region

Tragically, war is often the final stage of global transitions because violence consolidates changes that cannot be clarified otherwise. Arnold Toynbee’s insight that “Civilizations die from suicide, not by murder” has played out in real-time for the US empire. At no point did the Russians, the Chinese or the Global South endeavor to replace the US Dollar (USD), decouple the petrodollar, undermine NATO or destroy America’s key alliances with South Korea and Japan in East Asia.

“Civilizations die from suicide, not by murder.”

Arnold Toynbee

On the contrary, the Global South eagerly sought incorporation into the existing American-led international order and they were summarily rebuffed. President Putin said publicly in 2021 ahead of the SMO that “Russia did not want to give up the dollar as the reserve currency or means of payment, but it was forced to do it.” Likewise, Victor Gau, VP for the Center for China and Globalization (CCG), said China does not want dollar destruction but it will not accept weaponization of the dollar either.

Unfortunately, the United States has fallen into a Thucydides Trap but not of the kind that plunged Sparta into war against Athens. The History of the Peloponnesian War is a tome about the susceptibility of democracy to emotional distemper from leaders and demos alike during periods of crisis. Perhaps reminiscent of Alcibiades’ vanity before him, President Trump and the entire cadre of Western politicians are virtue signaling demagogues who think war is a game, truth is a narrative, and power is limited only by media spin.

The old world is burning down because Western demagogues set it ablaze. It was a hubris worthy of Sophocles that provoked disastrous war in Ukraine, cut off vital energy from Russia and prompted strikes against Iran, an unprecedented disruption at the heart of the American-dominated global energy supply chain.

Consequently, a structural shift set to unfold over decades will now complete by 2030. Essentially, the Liberal International Order (LIO) is turning off like a light switch and a new multipolar world order is flickering through the window like sunlight at dawn.

Remember, MAGA elected President Trump to retrench America - to wind down it’s rogue global empire while a multipolar world scaled up, peacefully; peace was not to be. At the behest of Jewish Power, President Trump chose self-destruction over adaptation.

Exploded Paradigms

Systemic self-sabotage has finally ruptured the pillars of Western governance. Pax-Americana paradigms that defined global trade, economy, finance, energy, and military power since World War II are disintegrating before our eyes.

US grip on global affairs is now in full, undeniable retreat across the domains of a fading hegemony:

1. Robust Middle Class - America’s founding ethnos has been decimated. The slimming white majority is barely ~50% of the population (I think less) and erstwhile economic-cultural-racial homogeneity has been replaced with popular immiseration

2. Dollar Dominance - A majority of global transactions remain dollar-based but USD is in sharp decline: foreigners are exiting Treasuries, global liquidity is pivoting away from NYSE stocks, and twin deficits render the US Government (USG) structurally insolvent

3. Global Supply Chains - Covid demonstrated the fragility of Just in Time (JIT) supply chains and precision-strike counter-measures mean it is Iran, China and the Global South who control the world’s critical sea routes going forward: SOH, Bab al-Mandab Strait, the Suez Canal, and the Straits of Malacca

4. Military Supremacy - Diversity, deindustrialization, and doctrine have slowly corroded America’s professional military since the 1970’s. Meanwhile, 21st century Intelligence, Surveillance and Reconnaissance (ISR) strike platforms render USM 20th century platforms like carriers obsolete

How did we get here? There are a series of key inflection points most have missed that have seriously degraded US power:

• 2014 Maidan Coup - CIA-funds a color revolution to remove Ukraine’s democratically elected President and install an aggressively anti-Russian government. Subsequent hostility in the Dombas leads directly to the SMO in 2022

• 2020 Covid - Lockdowns degrade Western productivity and labor participation never recovered. Inflation becomes structural, JIT supply chains break, and interest rates surge in response to exponentially growing debt levels

• 2022 Spring - Russia survives overwhelming Western sanctions by pegging energy exports to Rubles. Seizing Russian assets accelerates dedollarization as Global South countries lose confidence in the Western financial system

• 2022 Fall - Nordstream pipelines blow up, cutting off cheap gas from Russia and plunging Europe into an energy crisis, semi-permanent recession and accelerated deindustrialization

• 2023 - Farmers across Europe protest EU mandates inspired by the Green New Deal against synthetic fertilizer, nitrogen emissions, and agro-subsidies

• 2024 - Gold begins its ascent as Asian banks accumulate massive physical gold stocks, pushing gold prices +50%. Monetary power shift from West to East gains momentum

• 2024 Winter - LBMA defaults when large contracts for physical delivery cannot be met, precipitating a mad dash for physical. Physical demand tests the solvency of the LBMA and COMEX

• 2026 Spring - War against Iran confirms a military regime change favoring East against West. USM 20th century platforms: carrier strike groups and infantry divisions are functionally limited, slow-to-scale, and cost-prohibitive whereas Iranian 21st century platforms: hypersonics, mobile launchers, and drones are adaptable, scalable and economic

• 2026 Summer - War in Iran sets off a global energy crisis as the US Navy loses control of global sea routes. ME energy infrastructure producing 20% of the world’s petroleum, 20% of the world’s LNG, and as much as a third of the world’s petrochemicals and fertilizers are structurally damaged in the conflict

“Even if the Iran war ends, the damage has been done.”

Fabio Panetta - ECB Governing ‌Council Member

What we are witnessing today is the consolidation of a paradigmatic overhaul of the international system two decades in the making. Assumptions going into the conflict in Ukraine and Iran have been completely overturned because the balance of global power has already shifted and no one in DC, London or NYC noticed.

Remember, in 2022 DC policy makers thought Russia would be swiftly defeated after invading Ukraine. Similar assumptions projected the Ayatollahs in Tehran would be decapitated in weeks or less.

“Mr. Netanyahu and his team outlined conditions they portrayed as pointing to near-certain victory: Iran’s ballistic missile program could be destroyed in a few weeks. The regime would be so weakened that it could not choke off the Strait of Hormuz, and the likelihood that Iran would land blows against U.S. interests in neighboring countries was assessed as minimal.”

How Trump Took the U.S. to War With Iran - Jonathan Swan and Maggie Haberman

Superficial pre-war expectations exploded fragile paradigms. War in Ukraine has shaken confidence in NATO and the EU. Neither NATO nor the EU will last the decade and both may disappear in months rather than years.

There will be no peace until the US empire is expelled from the region full stop and Israel is neutralized.

Equally, attacking Iran has begun a regional war that is turning the entire Gulf against the United States and Israel. Worse, despite the fits and starts of Schrodinger’s ceasefire, Iran and probably the House of Islam recognize there will be no peace until the US empire is expelled from the region full stop. Indeed, until Israel is neutralized (perhaps destroyed) and the Levant is reorganized, likely under a new Turkic-Persian-Arabian Axis bankrolled by China, there will be no sustainable peace.

At first glance these statements seem hyperbolic and fantastic. However, if we think structurally these changes become inevitable.

Aside from the “special relationship” with Israel, three things have defined America’s ME empire for the last fifty years. US imperium inherited two of three from the British Empire:

• Trucial States - a group of seven sheikhdoms (Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain) under British protection established in the 19th century. These became the Gulf Cooperation Council (GCC) in 1981

• Skyes-Picot Agreement - Post WWI, the Ottoman Empire was divided up under Anglo-French rule, chopping up Arabia into random “States” Western powers could easily manipulate and Israel could easily bully: Lebanon, Iraq, Jordan, Syria

• Petrodollar - An agreement between the House of Saud and the United States to price oil in dollars in exchange for USM security. Pricing oil in dollars allowed Wall Street to financialize energy markets the way gold was financialized by the LBMA

“Saudi Arabia’s emerging utility to American energy security in the Persian Gulf in the 1970’s was paralleled by the part Riyadh played in allowing the United States to import oil denominated in its own currency at a moment when OPEC state-run companies were taking over from the big American and European companies in the Middle East.”

Helen Thompson - Disorder

These pillars are the foundation of an energy empire crumbling before us. Through the petrodollar and its organizational structures: the House of Saud, the GCC, and Organization of Petroleum Exporting Countries (OPEC), the US effectively controlled the distribution channels and energy products that drive the world economy.

In a few short weeks Iran’s swarm attacks on US bases, GCC infrastructure, and Israeli forces has irreparably devastated this superstructure. Iran now controls the SOH and Iran’s militias, missiles, and drones render the GCC defenseless and jeopardize its revenue streams. Who knows if the House of Saud will survive and with the Iron Dome running on empty Israel may not either. Checkmate.

“Mohammed bin Salman wants the permanent destruction of Iran’s conventional military capacity — its missile arsenals, drone production, and force-projection ability — achieved quickly enough that Saudi Arabia’s economy survives the process.”

Mohammed Omar - MBS’s Impossible Position Between Escalation and Collapse

From Crisis to Emergency

A bad moon is rising because this sudden turn-of-events has shocked President Trump and Prime Minister Netanyahu, both of whom were certain of quick victory. The breadth of the disaster has yet to be priced in by Wall Street either. By contrast, the world outside the United States is bracing for impact.

Shortages are imminent. Across the world countries confront an imminent energy crisis. As Iran tightens its grip on the SOH, Asian countries like the Philippines are declaring a state of emergency, hoarding and rationing fuel. An open bidding war between East and West for the trickle of oil sporadically exiting the Gulf has already begun.

“The world still hasn’t grasped the severity of the situation.”

Bloomberg

Depending on which analyst you listen to the world is short anywhere from 9-12M BPD of sea borne crude. So far, the Saudis have been able to bypass the SOH choke-point by transporting 5 - 7M BPD of oil via the East-West pipeline through the Red Sea. Rerouting from land based pipelines across the Gulf is helping assuage the shortfall but that relief valve is likely to shut off since the Houthis threaten these bypasses.

Unfortunately, the crude oil shortage is just the leading edge of the energy crisis. At least a third of Nitrogen-based fertilizer and major Liquified Natural Gas (LNG) plants run by QatarEnergy have been taken offline. Unlike the International Energy Agency (IEA), which coordinates global strategic oil reserves, no equivalent system exists for gas or fertilizer.

The compound disruption to the heart of global energy supply and trade means vulnerable regions will experience power outages, food shortages, and unrest. The Middle East is particularly indispensable to the supply of cheap diesel and jet fuel as well as Liquefied Petroleum Gas (LPG) and naphtha (hydrocarbon feedstocks). Predictably, Jet fuel prices have skyrocketed in countries like Singapore where flight routes have been cancelled. Higher diesel prices will disrupt European transport and heavy industry and gas shortages have already hit countries like Ireland.

The timing makes it worse. China, India and South Korea among others are halting key agro-commodity exports at an inconvenient time for summer harvest. Farmers from North America to South Asia desperately need fertilizers like Urea so they can begin planting now for summer yields. Turning off a third of the global fertilizer supply will impose severe pain that will harm Africa and South Asia the most.

“The poorest and most nutrient-constrained farming systems suffer the largest marginal damage.”

THE NITROGEN TRAP - Shanaka Anslem Perera

Breaking the global energy system means a divergence between paper and physical markets. Remember, the vice grip Wall Street maintains on the global economy requires the conversion of everything from homes to cars to oil and natural gas into financial assets traded digitally. Put differently, without control of the SOH, Wall Street cannot financialize energy commodities via futures markets to control prices.

Panic will blow up paper markets when shortages strike. The LBMA and COMEX lose control of gold prices when investors demand physical delivery and a repeat is likely in the energy markets. For the moment, Wall Street is pricing in a rapid reversion to the status quo before the war but for reasons outlined above that is impossible. It is hard to imagine how the energy emergency will not set off a global recession and a severe (probably systemic) financial crisis.

In short order, governments across the world will be tested and many will fail. The crisis is spreading fast in Asia where governments from Indonesia to India face a sudden and sharp social crisis. Even well organized countries who have planned ahead like China will feel the strain. Still, it is in the West where the reset will strike the hardest.

A Western Reset

The Epstein Class assumed cheap energy and credit were permanent conditions and that will be their downfall. Cheap energy spigots from Russia and now the Middle East are turned off and it is likely DC will impose export restrictions to insulate Americans as much as they can from energy price spikes. That leaves Europe vulnerable to an explosion when average Europeans start to suffer.

“Never has the world entered a crisis of any kind with such high deficits and debt levels. This burden will limit the ability of governments to cushion the impact of elevated energy prices.”

Why this oil shock is different - Ruchir Sharma

The nature of Western politics since WWII is about to transform. Overwrought blackpillers who have falsely forecast a coming global panopticon courtesy of shadowy doomsday planners in the City of London or the Council of 300 are about to glimpse the man behind the curtain and it will disappoint. When supply chains break, gas lines form and industry halts Western governments will break too.

Propaganda, censorship and media spin are of no use when resources are scarce and the accustomed amenities of first-world living are gone. Further, the main weapon sedating Western societies has been government goodies subsidized by money-printing. However, losing control of global energy prices means there is no way to sustain current standards of living, never mind finance the higher deficit-spending required to cushion the blow of coming austerity.

The nature of Western politics since WWII is about to transform.

Westerners live under a Kakistocracy with absolutely no clue how to navigate the politics of scarcity. Social cohesion is already buckling in England where Muslims (among other non-Britons) has reached critical mass. The same fiery dynamics afflict the entire European continent and certainly Australia, Canada, New Zealand, and the US.

After decades of mass migration, sudden cutbacks to bloated welfare programs will unleash deep-seated tensions already festering on the street. Energy experts like Jeff Currie point out “You can’t print molecules” so Western economies are in for “a crude awakening.” Put simply, the guard rails on Western politics since WWII will soon be gone; welcome to the Age of Scarcity.

A Western reset means politics is now about the ethnos not the elites. Unstable Western societies propped up by artificial prosperity is about to give way to hard economic times. Resource scarcity will bring a new politics centered on group survival and tribalism. For the Western ethnos tribalism means nationalism.

Nationalism is infectious. As David Betz has highlighted, civil unrest in any one Western country could fan the flames of conflict in another and nationalism is likely to do the same. Unlike populism, nationalism is about identity rather than dissent, a meta-political force that transcends party, class, and democracy itself.

Something revolutionary is ahead. The Western reset will be a back-to-basics wake- up-call, sort of like lighting the beacon of Gondor in Return of the King. The spontaneous coalescence of the Persian-ethnos to defend Iran against militant Zionism provides a sense of the coming awakening in the Western archetype.

The global reordering is beginning to solidify but surviving it will not be easy. Wars will escalate, currencies will collapse, presidents will resign, democracies will disintegrate and the international order as constructed since WWII will unravel. Cyclical climaxes of this magnitude are challenging because long-established paradigms no longer apply. Those who embrace change will have an easier time adjusting; those who don’t will get steam rolled.

“The wrong survey of good and evil was made: the heroes treated as villains, the weak-willed, the timid, the hypochondriac, the patriotically moribund, and the uncivilized were exalted as virtuous.”

On Resistance to Evil by Force - Ivan Alexandrovich Ilyin

A reset can rebalance the world. The events before us are the consequence of a failure to resist evil with force as much as anything else. It is time to transform non-resistance into resistance and regime change the Epstein Class once and for all to restore civilizational-order. Once this is accomplished, the emerging multipolar world will rebalance relations between East and West, between ethnos and elites, perhaps between God and man.

For the West it can be reinvention rather than destruction if we resolve to make it so.

Welcome to the end-of-cycle.