MacroVoices #525 Lyn Alden: Iran Contagion, Inflation & Private Credit
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MacroVoices Erik Townsend & Patrick Ceresna welcome, Lyn Alden. They will discuss the Iran conflict, the return to a multi-polar world order, the outlook for persistent inflation, the breakdown in private credit markets and much more. https://bit.ly/4rZghp4
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The Iran conflict marks a critical inflection point in the transition from a unipolar to multipolar world order, with cascading effects on energy supply, inflation dynamics, emerging market stability, and the architecture of global finance that will reshape geopolitical alignments and market structures for years to come.
- The Strait of Hormuz closure threatens 20% of global oil supply, creating energy scarcity rather than mere price inflation that could cripple economies within weeks if prolonged
- Energy-driven inflation combined with tied Fed hands creates vulnerability in emerging markets and private credit markets, potentially triggering forced deleveraging across multiple asset classes
- The conflict accelerates competition between US dollar-based and China-backed stablecoin architectures as the foundation for a restructured Middle East and global financial system
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Food inflation driven by fertilizer price spikes and disrupted agricultural inputs resulting from prolonged Strait of Hormuz closure is more politically destabilizing than oil price inflation and represents the greatest near-term risk to developing nations that cannot substitute production inputs or political legitimacy.
“food inflation is one of the obviously one of the the most damaging types of inflation you can get. You know in a developing country the two things policy makers have to try to not mess up are food inflation and energy inflation or shortages. Uh, I mean that's that's how you get revolutions.”
Global reserve currencies with network effects, unlike gold-backed currencies of prior periods, tend to be the last thing to decline during imperial transition, making the dollar's dominance more durable than its military or economic influence.
“the global reserve currency because it has network effects uh that tends to be a later rise but also kind of one of the last things to decline over time”
Uranium fundamentals remain exceptionally bullish due to advanced reactor development acceleration (Oklo with first criticality expected within months), NRC regulatory streamlining, and Chris Wright's leadership at DOE, but uranium is a high-beta sector vulnerable to broader equity market crashes.
“the fundamentals are still uber bullish and they're getting better by the day. And our friends at Alawat Atomics unveiled their first test reactor which they built in record time at their new facility in Idaho Falls...They expect first criticality...in the next couple of months...the NRC...has announced the streamlining of licensing approval processes for advanced nuclear reactor technology.”
A complete cessation of bunker fuel would collapse global shipping because ships cannot operate without fuel, after which global trade ceases, creating a second-order economic collapse mechanism distinct from and more severe than inflation.
“Just imagine there's no bunker fuel. If there's no bunker fuel, ships don't go from A to B. If ships don't go to A to B, nothing goes from A to B, at which point global trade breaks down.”
Israel cannot withdraw from the conflict because doing so signals to Iran that the nuclear program will not be stopped, forcing Israel into either accepting Iranian nuclear weapons or eventually conducting regime change operations, neither of which can be avoided through diplomacy.
“Israel can't go home and it would be well aware that if it just gave up and said fine, we're done. You know, Iran would be even angrier and more determined to get a get a bomb either you the slow way or to just get one smuggled in from North Korea etc. at which point there you go that changes the equation in the region immediately.”
The United States has exited peak unipolar power and is now in a gradual but accelerating transition toward a multipolar world where China, India, Europe, and other regional powers compete with reduced US hegemony across military, economic, and financial domains.
“the world is exiting a peak period of like a unipolar power very like a hyper power in the world and for obviously after World War II and then especially after the fall of the Soviet opinion, the United States basically became the core center of of kind of global economy, global military projection power”
Transitory inflation from supply shocks (like oil spikes) tends to reverse when the shock ends, but persistent inflation from monetary expansion takes years to trickle out and becomes self-reinforcing through price expectations, making the money supply growth mechanism the critical variable determining whether crisis-induced inflation becomes permanent.
“when you have a something that's caused by a supply disruption, that part shouldn't be as persistent. Kind of like how the energy price spike we had in 2022, while very damaging for that, it it gave us less persistent effects on inflation.”
Media reports and headlines about the Iran conflict should not be relied upon because they contain significant false information from all sides, requiring independent verification of physical facts (like actual ship transits) rather than official statements.
“You cannot take seriously a vast amount of what on your phone, your television set or your Bloomberg screen. Just because headline X comes through in the Middle East does not mean that is what's happening or that's what that particular individual or country thinks or is doing.”
Whenever there is acute liquidity stress in either the Treasury market or interbank overnight lending market, the Fed steps in with standing facilities and purchases if needed, regardless of Fed chair ideology or stated balance sheet reduction intentions.
“anytime you have a acute liquidity stress either in the treasury market or in inter you know interbank overnight lending market the Fed's going to step in uh when needed either you know starting with their standing facilities but then also including purchases if needed.”
Food inflation in developed countries is less likely to create acute shortages due to overall wealth but does squeeze lower-income populations and reduces consumer sentiment which is already at nearly record lows in the US.
“In a developed country, food inflation, there's less of an acute risk of of shortages and people literally unable to eat just because the the overall environment is wealthier, but it does squeeze people, especially on the lower half of the income spectrum. So you do get more anger, more, you know, we're already in the US nearly record low consumer sentiment.”
The United States economy is in a K-shaped bifurcation where those positioned in AI capex, fiscal deficit spending sectors (healthcare, social security, defense), and older/wealthier demographics are doing well, while new college graduates, lower-income workers, and first-time homebuyers face stalled payrolls, high rates, and unaffordable housing.
“we're already in uh what other analysts are calling a K-shaped economy or two-speed economy. And all the data I look at that uh at fully confirms that...if you're on the right side of AI capex or you're on the right side of fiscal deficit spending, you know, the health care, the social security, the defense uh sector, those areas are receiving the, you know, the majority of the deficits and they're on average doing pretty well. So on average, older, wealthier Americans are generally doing fine”
If the US achieves military victory in the Middle East, it preserves its geopolitical position globally; if it withdraws with military defeat, it signals weakness on a scale equivalent to the 1956 Suez Crisis, which would unravel US credibility globally and trigger secondary geopolitical consequences.
“the US can go home. But as I've underlined repeatedly of late, if it were to just go home with its tail between its legs, that's a 1956 Suez style crisis for the US because it won't be fighting anywhere else again on the same scale as this if it can't manage to achieve victory here. So that's a huge setback for the US in every dimension of Trump economics”
Oil prices at $150 per barrel are economically tolerable for the global economy because they are not inflation-adjusted highs, whereas prices above $200 per barrel begin to cause systemic breakdown due to being at or near historically unprecedented levels.
“I think that the economy, uh, is is resilient enough to handle those types of similar nominal numbers of the past. I I think where it runs into danger is when you get into these kind of unprecedented levels like something something approaching new inflation adjusted highs which as you mentioned is is you know potentially in that 200 plus barrel range”
Private credit markets have experienced very rapid credit creation with looser lending standards, making them the likely location of the next financial system issue, similar to how subprime mortgages were the fault line in 2008, driven by both the speed of credit growth and the looser regulatory environment.
“whenever you have a, you know, a very quickly moving, uh, a quickly growing part of the financial economy, the odds are that's where that's where the next issue is going to be. Uh, just because that's where that's where the most exposure is. That's where generally speaking, you're going to get looser lending standards just because there's there's so much money slloshing around.”
Stablecoin architecture, including both US dollar-backed and China-backed (Renminbi) versions, will emerge as a central component of the post-conflict Middle East financial structure, with the choice between decentralized and centralized designs determining geopolitical alignment.
“once one side or the other has basically started to take control of all the Middle Eastern energy de facto, which is what this is about, you will then start to see the emergence of stable coins US-based we spoke about before or US dollarbacked are certainly going to be rolled out as part of the new architecture on the back of that or alternatively and already happening in the background uh China's attempt to put out remi stable coins which are of course going to be much more centralized and run by the government versus the US freewheing private sector version.”
The US and Israel have created a pattern of appearing publicly at odds while being in complete coordination, using the belief that they are divided to shape market expectations and algos, which then becomes a self-fulfilling prophecy as traders position on the false narrative.
“when you had Operation Midnight Hammer, the US and Israel have repeatedly managed to fool the world by appearing to not be on the same page and that Trump's angry, BB's angry with Trump, etc., etc., and then boom, they coordinate and strike. So every single time the world seems to fall for this stickick that there's a difference between them and then something happens where you find out actually they were working in complete coordination”
The 50-day moving average at 6,800 on the S&P 500 represents the trigger point for systematic selling, which has activated a cascade of deleveraging from CTAs, volatility-targeting funds, and risk parity strategies that are under pressure to reduce exposure.
“Overall, there's a very clean line in the sand for the bulls to neutralize the existing downtrend, which is the 50-day moving average lies around the 6,800, which was the trigger point for systematic selling to begin. We are now in systematic sell mode, which is all of those strategies, whether CTAs, V targeting funds or or risk parity funds are all under pressure to delever.”
The US 10-year Treasury yield has seen a 50 basis point rally reversal in March, with breakout potential to new 2025 highs at 415-460 basis points, creating credit market stress that requires careful monitoring as yields continue to press higher in the post-FOMC environment.
“we had that bullish engulfing candle come off of a retest of the 395 level in the first days of March, and since then, we've seen a 50 basis point swing in the 10-year yield, causing all sorts of stresses in the credit markets. This trend is now in place...all of the previous highs uh from 2025 were all in that kind of 4 1.5 to 460 level on the upside.”
Banks' aggregate exposure to private credit (approximately $1.9 trillion in loans to non-deposit financial institutions out of $25 trillion in total assets, representing 7-8%) is large in absolute terms but small relative to capital buffers, meaning private credit losses, even if massive, are unlikely to severely damage the aggregate US banking system.
“banks have collectively lent something like 1.9 trillion to non-deposit financial institutions of which a subset uh is private credit. And that sounds like a giant number and it is uh because we all macro stuff's in the trillions these days. Uh but that's in relation to about 25 trillion of total bank assets. uh which gives you seven to eight% of total bank assets are held in the form of loans to non-deposit financial institutions”
The Fed chair is a significant force in setting Fed policy and controlling the primary communications platform for the central bank, but it is not a dictatorship because the FOMC has 12 voting members and the most substantive Fed policy (emergency liquidity provision during crises) operates largely independently of chair ideology.
“I don't really perceive a giant difference uh as we get the new chairman because you know as listeners know you know that the FOMC at any given time has has 12 voting members in it and you know some they rotate over time uh and so while the chairman is a significant force on setting Fed policy and kind of controlling the the microphone the biggest microphone uh in the central bank uh it's by no means a a dictatorship.”
With the Volatility Index at 27, implied daily S&P 500 ranges are approximately 114 points, making typical 100-point intraday swings technically insignificant, indicating the market is in a systematic deleveraging cycle where further lows are more likely than consolidation.
“I always like to put things in context from a probabilities perspective at a volatility index up in the 27 handle. We're talking about a situation where we have daily implied ranges of 114 S&P points, which essentially means that these 100 point swings higher and lower that we see on an intraday basis are not technically significant. This is just normal volatility ranges.”
Gold has formed a corrective pattern after a two-year bull phase with parabolic rise, declined through the 200-day moving average for the first time since 2023, and could trade down to $3,500 if that average fails to hold, despite no change in long-term fundamentals.
“There was a very distinct 2-year bull phase that blew off with a parabolic rise and a correction. We now decisively broke down after a failed rally attempt which is now putting gold in a distinct corrective pattern...if it does happen, you could see a whole lot of people abandoning their positions and we could see a wash out all the way down to 3,3500.”
Non-farm payroll growth has stalled for the better part of a year despite falling unemployment, suggesting the labor market is weak at the margin rather than strongly healthy, which means there are fewer financial cushions available for consumers to absorb energy price shocks.
“when you have flat, you know, non-farm payrolls for the better part of a year, you know, even though you don't have high uh initial claims yet, uh even though you don't have any sort of acute signs of issues, you just have kind of a stall speed type of economy outside of those really hot spending areas.”
Currently fertilizer prices are rising while crop prices have not yet risen, creating a squeeze on farmer revenues (higher costs, flat revenues) that lasts until either energy prices decline or crop prices adjust upward to compensate.
“my understanding at the current time is you know as we see already fertilizer prices go up farmers are kind of squeezed because they haven't really seen the sharp of a move up in in their cash crops yet. So they have higher uh expenses but not necessarily much higher revenue.”
Trump has suggested via Truth Social that the US should either obliterate the Iranian regime and abandon policing the Strait of Hormuz (leaving responsibility to countries that rely on it) or alternatively take control of the strait in coordination with Iran, both representing radical departures from post-WWII American geopolitical strategy.
“one of the scenarios that President Trump has directly and not just alluded to, but laid out very specifically in one of his truth social posts is he said, 'Maybe we should just go and make a final strike, obliterate the rest of the Iranian regime, and walk away and leave policing the uh straight of Hormuz to the countries that rely on it'”
During crisis, market participants including sovereigns are forced to sell whatever liquid assets they can access regardless of price, making gold a source of crisis liquidity that can decline sharply even as geopolitical risk rises.
“in times of crisis sometimes entities have to sell what they can not what they want to. And so you know gold is a source of liquidity for many market participants including potentially sovereign participants in this crisis.”
The Iran conflict is economically positive for Russia due to higher energy prices, reduced sanction pressure, and Russia's major role as a fertilizer producer, while being negative for China and Europe despite their ability to manage shocks, with Russia as an outlier beneficiary.
“all else being equal, this has been a positive development for Russia. Their energy prices are higher. Uh the sanction pressure is less on them. And you know, it's also they're also a major fertilizer producer. So, they're potentially going to get benefits in that department as well.”
Emerging market currencies face devaluation pressure when energy-importing nations with debt denominated in foreign currency lose access to imports and are forced to either ration imports or accept currency depreciation, with vulnerable nations like Egypt experiencing rapid currency decline as financial markets price in import scarcity.
“they're more likely to have a a big kind of money supply spike after this happens. So, they're more likely to actually lock in a lot of that inflation because they're more likely to get a a persistent and and and like a higher plateau of money supply resulting from this.”
The US could theoretically implement export restrictions on finished products and crude oil via executive order to protect domestic prices during a shortage, consistent with Trump's America First policies, but such policies would generate massive international backlash and further dislocate global markets.
“I think it would be politically and even geopolitically...bang in line with the overall Trumpian direction. Were it not for the fact that of course the US while it's a net energy exporter is still a net importer of certain kinds of fuel which it absolutely relies on.”
China's economy is more resilient to energy shortages than Europe's because Chinese citizens have higher pain tolerance due to decades of economic change experience and less political polarization, while Europe's economy is more fragile due to political constraints on policy flexibility.
“much like the US economy is often more resilient than bears think. Uh it's also true that China's economy is often more resilient than bears uh think. They're very flexible uh in terms of how they kind of um you know are able to keep functioning. On average, Chinese citizens are you know they're kind of their experience over the past decades has has kind of given them higher economic pain tolerance than Americans because they have a more of that uniarty system. Political polarization is is less of an issue over there.”
Precious metals experienced an unusually volatile upside move in the year prior to the Iran conflict that created a sentiment bubble, causing gold and silver to hit long-term price targets that had asymmetric upside risk, thereby eliminating the risk-reward asymmetry that made them attractive at lower prices.
“We had an unusually strong rise in gold, silver, and platinum prices uh in the year leading up to this event. And some people have used the word bubble to describe it...the sheer magnitude and speed of those moves uh is concerning”
The Iran conflict is a symptom of US imperial decline in which the United States rarely gives up projection capabilities even when strategic logic would suggest it would be rational to rightsize from a position of strength rather than fight to maintain whatever capability currently exists.
“And this kind of battle over the Middle East is I think both a symptom of that which is that empires rarely give up their kind of projection capabilities easily even when it would potentially be the right thing to do from a strategic standpoint would be to kind of rightsize from a position of strength rather than kind of fight to always maintain whatever capability you have.”
China can move portable scarce assets across borders more easily than physical precious metals like gold, which suggests fundamental advantages for Bitcoin or other portable value stores in times of geopolitical crisis where jurisdictions become hostile.
“if people find themselves wanting to move, portable scarce money, it has, you know, some certain advantages compared to more eternal scarce money that is maybe harder to move across borders or uh jurisdictions.”
If Iran escalates sufficiently to force the US and Israel to withdraw, it will then consolidate Middle Eastern dominance by bullying the Gulf Cooperation Council states into accepting Iranian regional hegemony, creating a geopolitical catastrophe for the West.
“Iran of course has an incentive to keep escalating to make those two sides try and go home. And at the same time, even if it got that done, would then probably start to bully the GCC even more, the Gulf Cooperation Council to say, okay, you sided with the US. Now it's come time to come and, you know, kiss the ring here and understand that tan runs the Middle East. At which point it's a geopolitical catastrophe for the entire West.”
Iran could potentially leverage energy scarcity to pressure Europe, China, and other countries to publicly denounce Israel and the US in exchange for opening energy flows, but Europe's deep integration with US systems (Eurodollar, technology, NATO, LNG) makes this pivot impractical despite crisis conditions.
“Europe is deeply imshed with so many American systems from the Euro dollar to you know the technology system to NATO for now because obviously that would mean the end of NATO to American LNG because you know right now Europe is still going to be needing American energy. So it's very easy in principle to say okay flip a switch and shift to that camp. But there's an enormous transition cost in doing so”
The market's relief rally on Monday after the 48-hour ultimatum was postponed is unjustified because the postponement is consistent with escalation planning, Iran has publicly denied any negotiations, and Israeli officials have claimed no awareness of ceasefire talks, indicating the ceasefire scenario is not actually being negotiated.
“the 5-day postponement of that 48-hour energy strike threat sounded to me like basically buying time to turn a bluff into a real strike. If anything, the only message that I've heard out of Iran or supposedly from Iran...the only messaging that I've seen coming out of Iran is they're denying that there are any talks that are open with the United States. They're vowing to uh fight to the end, and they're saying that there's not going to be any ceasefire.”
If the Iran situation triggers a much higher US dollar index combined with much higher 10-year yields and much higher oil prices simultaneously, gold could reach $3,000 or lower, representing an outlier case that is not normal but is possible given the extraordinary environment.
“I think $3,000 gold is entirely possible if the Iran situation triggers a much higher Dixie and a much higher 10-year yield and a much higher oil price. And unfortunately, as much as all of those things happening at once is not the norm, these are not normal times. And I think all of those things happening at once is entirely possible.”
Iran has repeatedly announced that the Strait of Hormuz will be opened with minimal restrictions, but actual vessel transit numbers remain at roughly 4% of normal (6 ships per day vs 138 typical), indicating that rhetorical claims do not match physical reality and are largely propaganda designed to influence trader behavior.
“Iran said that just the other day, but as far as I'm aware, they said the same thing at least a week ago. And yet, if you look at vessel transit numbers, I think the latest data I saw yesterday were that six ships had managed to get through, whereas normally it was like 138 of a given day.”
AI-driven software automation (specifically tools like Claude.code) now poses a threat to software company business models that were previously heavily supported by private credit, creating losses for private credit investors in that sector.
“there's a whole lot of private credit was loaned to software companies. Then claude.code came along and kind of made it very easy to uh to write software almost uh automatically and it creates a threat.”
Actual geopolitical negotiations and backchannels in the Middle East are far more complex than what appears in mainstream media headlines, and significant leverage plays involving France, China, Australia, and other countries could be occurring in the background that the public is unaware of.
“I think I whether we're seeing it or not in headlines, and again, I have to reiterate, I'm not trying to be a conspiracy theorist or say everyone's got to go and red pill themselves, but don't think just because you're reading Bloomberg or the Wall Street Journal or the New York Times or, you know, whatever your go-to media is, don't think you're getting the inside scoop on what's going on in a region as double dealing and as important as the Middle East”
Fuel shortages from prolonged strait closure would create deflationary pressure in some sectors despite overall stagflationary effects because market participants desperate for cash would sell off assets at fire sale prices (as seen in Thailand truck driver example of strawberries sold at discount when diesel was unavailable), creating a situation where CPI doesn't capture the economic dysfunction.
“there isn't any available regardless of the price so you don't record an increase in inflation there just isn't any diesel now what does that mean for the economy it's an interesting one for the statisticians because the CPI doesn't change but no one can move anything. No one can do anything. No one can be nothing can be delivered and so things absolutely grind to a hole which ironically in some instances can be deflationary because people are going to be desperate for cash and what might they have to try and sell off”
Bitcoin held up better than gold during the Iran conflict despite the conflict beginning because Bitcoin had already experienced severe deleveraging and washout in prior months, leaving it held by strong hands with washed-out sentiment, while gold had reached peak sentiment just before the conflict.
“Bitcoin is kind of held up oddly well in this environment...Bitcoin had a particularly rough several months leading into this. So, it was already largely delevered. Uh, it already sentiment was already very washed out. A lot of the fast money was out and a lot of the coins were held by pretty strong hands.”
Kevin Worsh as new Fed chair would likely be slightly less growth-oriented on balance sheet reduction and slightly more dovish on interest rates than Powell, but these differences are marginal and will be further constrained by the Iran conflict's inflationary signal making rate cuts politically and economically impossible.
“if you asked me a month ago, I would say that all us being equal, war should be slightly less growth-oriented on the balance sheet and slightly more dovish on interest rates uh would be my kind of base case. And but now that we have this war and we have higher energy prices and and you know inflationary pressures kind of in multiple dimensions here while I wouldn't say it's impossible for him to cut I mean it'd be historically very unusual”
The euro is the most direct and liquid way to express a view on emerging market deterioration due to energy and food inflation, because Europe itself functions as a large, import-dependent developed economy vulnerable to terms of trade shocks when energy prices spike.
“Europe starts to behave like a large import dependent economy where rising energy and food costs create a direct terms of trade shock. So the cleanest way to position for that is the currency, specifically the EuroUSD. If Lynn's thesis is right and those secondord inflation pressures continue to build, you should see sustained demand for dollars to fund those imports, which puts downside pressure on the euro.”
If peace is declared but war damage persists, it will take months for energy flows to return to normal due to damage to infrastructure that has not yet been assessed, and potential new damage from Houthis in the Red Sea, with supply-side damage being the primary constraint.
“it would take months to get energy flows back to where they were. And that's depending on the supply side damage. We don't know how much damage has been done to LNG so far. We're estimating 17% of Qatar's output, but for between 3 or 5 years, could be worse. We won't know till the war is over.”
Copper trading below its 50-day moving average with limited headroom to the 200-day moving average suggests that if the 200-day fails to hold, it signals the market believes a global recession or depression is possible due to prolonged Strait of Hormuz closure.
“We're well below the 50-day moving average now and not a whole lot of headroom left above the 200 day moving average. If that 200 doesn't hold and Iran is clearly the key to that, you know, it's a signal that a global recession or even depression is not out of the question.”
Trump has an incentive to use energy scarcity as leverage in negotiations, offering to solve global energy crises in exchange for concessions from other nations that are desperate for fuel, rather than simply stepping in to solve the problem without demanding reciprocal benefits.
“if you're in the US position, do you even try and do that or do you say, 'Okay, you desperately need me to sort this out. What are you going to do for me?' And I would be gobsmacked if the US in that position, whoever's president doesn't turn around and try and use that as leverage.”
Fuel shortages have already begun in localized areas of the world like Australia with hundreds of filling stations running out of fuel, indicating the problem is not purely hypothetical but already manifesting in physical supply chains.
“We've already seen hundreds of filling stations in uh Australia running out of fuel”
The situation could deteriorate further if the Houthis resume firing on ships in the Red Sea, which would force Saudi Arabia to stop using the Yanbu oil export route, creating an even larger drop-off in oil flows and making the supply disruption worse than current estimates.
“things could get much worse if the Houthis start firing in the Red Sea again. Then we'll have an even bigger drop off in oil flows because Saudi Arabia can't send them via Yanbu. So everything can get much worse”
Oil volatility is elevated at 90% implied with right-tail skew, meaning dealers are positioning for upside volatility moves, and oil market could see wide swings from $75-80 on dovish headlines to $120+ on escalation.
“oil volatility does all the talking. We're at a 90% implied... the dealers are still positioning for the risk that there could be an upside volatility move... we could be at uh $75, $80 or lower on one headline on WTI, but at the same time, uh we have a further escalation and real infrastructure damage in any way in the Middle East, and we could be north of 120.”
With unemployment still at lower levels and jobless claims still fine, even if non-farm payrolls are stalling and total employment is weak, the Fed will likely maintain a holding pattern on interest rates at least until they see more employment damage, regardless of which chair is leading.
“as long as unemployment levels are still on on the lower side, uh even when they have softening in total payroll numbers and and some of that's, you know, net migration, some of that's demographics, they're not they're really looking at the unemployment rate more so and those numbers are still fine. Jobless claims are still fine. And so if they do have this kind of inflationary pressure from energy, I I think it puts them in somewhat of a holding pattern uh almost regardless of who of who's in charge”
The Iran situation will create volatility and dramatic headlines throughout 2026, with the conflict resolution and its aftermath likely to drive more financial market turbulence and geopolitical uncertainty than markets have experienced.
“if you think all the volatility and all the craziness and the wild headlines are only focused on this 2026 has got a lot more to offer you yet in terms of what you see dayto-day. The volatility that we've seen so far is pretty damn clear that making that call would be silly.”
The Iran conflict is expected by Michael Every to be resolved within a couple of weeks, though this prediction is subject to hourly changes and depends on the outcomes of escalation that might look better than expected but with significant intermediate pain.
“Couple of weeks. Let me be blunt...I always find that's the most healthy way to approach the world to, you know, take take the long-term view that actually life finds a way, but to recognize that in the meantime, in the meantime, things can get pretty ugly”
Uranium price (U308) has been quiet and inactive relative to volatility in other commodities, with limited technical evidence of new bull move underway, suggesting uranium is waiting for catalyst to drive next phase higher.
“uranium is just quietly waiting for its next catalyst. At this moment, I don't see any reason not to be bullish, the uh the U308, but it really is inactive at the moment and is not getting any attention on the short term. So, we're going to have to see when we have some sort of technical flows start to show some sort of uh new bull move underway”
The euro short trade can be structured with defined risk by buying a May 117 call and selling a 120 call in a call spread, creating a hedged position that maintains core directional exposure while capping upside risk during periods of geopolitical headline volatility.
“One way to structure that is by overlaying a call spread. For example, by buying the May 8th expiration 117 call, which is trading around 75 pips, and selling the 120 call, roughly 15 pips, creating a 300 basis point wide spread for a net cost of about 60 pips with approximately 43 days till expiration.”
Dollar index shows bull flag formation from recent price action and is approaching the 100 level which represents previous highs from 2025, with potential for dollar breakout if that level is cleared with momentum.
“The last two weeks on the Dixie chart are looking more and more like a bull flag pattern... When I look at this dollar index, I see the six-month trade range and this 100 level on the Dixie as being the key overhead level of this trade range with a bull flagging formation forming and us working our way back up to those highs.”
Jay Powell's term as Fed chairman expires on May 15th, 2026, and there is a criminal investigation underway into Powell that has complicated the confirmation process for his replacement, Kevin Worsh, though Worsh is generally considered a credible candidate likely to be confirmed.
“Powell's term as as chairman expires. he still has the option to remain on the board, which ironically he might increases the odds that he might stay on it based on recent comments he's made uh because of some of these investigations.”
Lynn Alden published a science fiction thriller called 'The Stogard Incident' that projects technological trends and explores far-fetched scenarios as a creative outlet, made possible by her engineering background and personal interest in fiction.
“that's my new sci-fi book that's out...my initial background was engineering and you know like many people I'm a big fan of fiction and so you know I I've had the story in my head for a while and I decided to write a kind of a sci-fi thriller the Stogard Incident.”
Lynn Alden provides free public articles and newsletters from her firm (lynalden.com), a low-cost research service for individual investors and institutions that publishes every two weeks, and co-authored the book Broken Money on the intersection of money and technology.
“that's at lynalden.com. uh I provide public articles and newsletters so people can sign up to the free newsletter where I I provide uh you know research every every 6 to 8 weeks uh on the broad macro picture. Uh and then I have a lowcost research service for um individual investors as well as institutions uh that comes out every two weeks”