"Most people are trapped in their normalcy bias, minimizing the threats steamrolling directly towards them, while delaying the necessary logical steps they should be taking to prepare. I’m reminded of the outbreak of World War II when Germany invaded Poland on September 1, 1939, with Great Britain and France declaring war on Germany two days later. Then virtually nothing happened for the next nine months. The people in London, Paris and Berlin acted as if life would go on normally, with no consequences from the declarations of war." - Jim Quinn
"For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there."
In just the last few months we have seen two of the largest choke-points for energy and critical materials shut down and a complete desertion of 20 major US Military bases in the Middle East. Our SPR is at tank bottom, the 10-year Treasury is over 4.7% and inflation is raging higher at least for anyone not working for the government agencies tasked with reporting the inflation rate.
"Every recovery eventually reaches a point where the official statistics no longer resemble reality. Politicians point to stock market records, economists celebrate another quarter of GDP growth, and central bankers congratulate themselves because inflation has moderated. Then you look at Main Street, where the people actually creating jobs are quietly closing their doors.
Small business bankruptcies continue climbing at an alarming pace. Total U.S. bankruptcy filings reached more than 310,000 during the first six months of 2026, a 12% increase from the same period last year. Commercial bankruptcies continue rising alongside consumer filings, reflecting financial pressure spreading across the entire economy rather than remaining isolated to one sector.
"Small businesses employ nearly half of the American workforce and account for roughly 44% of U.S. economic activity. They do not have the luxury of issuing corporate bonds, raising billions through Wall Street, or borrowing indefinitely from investors willing to overlook losses. They survive on cash flow. When customers stop spending, interest rates rise, insurance premiums double, payroll costs increase, and suppliers demand higher prices, there is nowhere left to hide."
Anyone running a business knows things are bad. I speak to business owners every single day and the evidence is overwhelming that they are struggling along with the customers they serve. Interest rates are creeping higher but the real story is about availability of capital more than cost. That is to say, it's still possible to get affordable interest rates on loans however far fewer candidates are being approved and those who are can't get the amount they ask for. In just the last week I have seen several approved loans get cut back significantly even though the credit quality of the borrowers was excellent. In one case a $325,000 approval was reduced to $200,000 with no reason given by the underwriter. If you have a budget for specific expenses I suggest increasing your ask by 30-40% just in case.
I don't get into politics here in this blog, I save that for private discussions over beer with friends I know already agree with me. Regardless of what your own personal political preferences are however I think we can all agree that the problems we're facing in terms of oil prices, interest rates and inflation are 100% self-inflicted. That is to say, we didn't need to attack Iran. According to all US intelligence agencies, there was no imminent threat to the US from Iran at all but there sure as hell is one now!
On February 27th of this year the US had multi-trillion dollar investment packages lined up with multiple gulf state agencies, over 20 high-tech military bases projecting unrivaled US power in the region and the straights of Hormuz and Red sea were wide open for the whole world. Now that's all gone.
Why? Who benefits from this mess?
Moving into this week I see more of the same. Even if everything were to be resolved tomorrow which is highly unlikely we would still need an extended period of time to work through the bottlenecks and disruptions of the last few months.
Diesel fuel is going to be an issue because of massive shortages and higher cost. Those problems will affect the entire supply daisy chain downstream. Stock up if you can and keep some powder dry.
"Back to normal", whatever that means, isn't in the cards my dear friends. Either embrace the change and learn to adapt or join the scramble when the s**t finally hits the fan. It could be this week or not but soon, very soon.
BTW, if you want to know the actual price of a barrel of oil use this link: https://finance.yahoo.com/quote/USO/
Here are few interesting articles I saw this week:
* "For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there."
* "I believed -- and you probably did too -- that the Strait of Hormuz would eventually reopen and be restored to full operation. I believed that the fighting would stop, the tankers would flow again, and the world would return to some semblance of normalcy. But I was wrong, and so was everyone who held onto that hope."
* "Small businesses employ nearly half of the American workforce and account for roughly 44% of U.S. economic activity. They do not have the luxury of issuing corporate bonds, raising billions through Wall Street, or borrowing indefinitely from investors willing to overlook losses. They survive on cash flow. When customers stop spending, interest rates rise, insurance premiums double, payroll costs increase, and suppliers demand higher prices, there is nowhere left to hide."
* "The Houthis proved to be durable under the weight of both U.S. & Israeli bombardment, at that was when they were the U.S.’s only target."
* "With outflows accelerating, near-term funding from Private credit for AI data center buildouts looks less likely. NVIDIA and others keep popping up in private credit loan books. What happens to repossessed GPUs in a stressed environment?"
