James E. Thorne

Churchill’s rule still governs the board: control doesn’t come from dominance, but from diversification. Iran is playing a first-order game, trying to weaponize Hormuz to create scarcity and price spikes. The United States is playing a new game. By allowing markets to reroute and absorbing demand shocks, it has positioned its barrels as the marginal, stabilizing supply, the one every buyer turns to when volatility rises. The result is counterintuitive. Disruption in the Gulf doesn’t increase Iran’s leverage; it accelerates its erosion. Each attempted squeeze forces buyers to diversify, and every round of diversification pulls more U.S. crude and LNG into the system’s core. This is the real shift. The United States is no longer just a producer, it is the system’s balancing mechanism, not by decree, but by default. Iran no longer controls the board.

Old rule. Narrative follows Price.

Memorial Day weekend: remember the fallen.

Ignore the noise. Simple rule, listen to the President and ignore the noise. 👇

AI isn’t a gadget bubble; that thesis has already been debunked by the economics of hardware, power and capex. The cycle will also last longer than consensus assumes because physical bottlenecks in power, silicon and deployment stretch the build‑out rather than end it. This is a long, physical platform build‑out into GPUs, HBM, cooling, grids and eventually orbital compute. As in every super‑cycle, weak names will rip. Durable value will settle in AI factories and infrastructure. Consensus just needs to wake up.

Let’s be honest. Expect the global political class and its commentators to dismiss the deal President Trump just negotiated as the final proof that his Epic Fury was a foreign-policy failure. Expect columns declaring it a climbdown, a muddle, a sideshow. Expect the same people who misread his strategy from the start to congratulate themselves for their consistency. Expect it. It’s wrong. Thesis, antithesis, synthesis: what they will miss, as usual, is the higher-order story taking shape beneath their own talking points. Iran’s leverage is dying; a world in which it never gets a usable nuclear weapon is coming into view; and the old, sentimental Pax Americana is giving way to a colder, more durable American-anchored order. The thesis of the post-Cold War era was simple and unspoken: you could tolerate fragile choke points and rising Iranian capabilities so long as flows stayed cheap. Inspectors would count centrifuges, diplomats would draft communiqués, and tankers would keep threading a narrow strait under the guns of a revolutionary regime. American power, as benevolent global referee, was the background assumption that made this fantasy bearable. Trump supplied the antithesis by refusing to treat Iranian geography and nuclear ambition as separate dossiers. Sanctions, targeted strikes, and a visible naval vise around Hormuz forced the world to confront a fact it had politely ignored: you cannot base global prosperity on routes and regimes that can be shut at will. In pushing the confrontation to the point where shipping hesitated and war felt plausible, he burned away the illusion that Tehran’s leverage was tolerable. The synthesis now taking shape is less theatrical and more consequential. Step by step, capital and strategy are moving toward a world in which Iran’s hypothetical bomb buys it little. As pipelines and LNG routes bend away from contested waters, as supply chains re-anchor in the Americas and other safe basins, the value of nuclear blackmail shrinks. At the same time, the universalist Pax Americana of think-tank nostalgia is dying. In its place is a harsher, more honest reality: the Americas as an resources, energy and industrial super-region, secured by American hard power; Europe free to look down its nose and build industrial policy on climate pageantry; and the real work of prosperity done where fuel is abundant and sea-lanes are actually defended. As the nuclear threat slowly declines and the knee-jerk criticism of Trump’s strategy is seen for what it is, biased political commentary, the pedantic analysis from the elites will wither away. The neo-cons will be upset as well; a world that no longer needs their dreams of democracy at gunpoint, but does need hard borders, secure energy, and unapologetic American leverage, leaves them without a crusade. The Neo Cons will keep arguing about atmospherics and adjectives, but the system will already have moved on to more basic questions: which geography is safe, which supply is reliable, which political order keeps the lights on. On that map, Iran is not a pivot and Brussels is not a conscience. The United States is once again recognized, not as global schoolmaster, but as the indispensable guarantor. Just as the same class confidently dismissed Trump’s first run for president the day he came down the escalator, they will be wrong again about how Operation Epic Fury has changed the world, for the good. nytimes.com/live/2026/05/2…

Must read 👇 Expect the Neo-Cons to be upset.

At 250, the US faces a decision that cannot be deferred. It can continue managing decline while the underlying structure erodes. Or it can reassert the principles that made it a republic: sovereignty, production, fiscal discipline, and strategic clarity. realclearpolitics.com/articles/2026/…

Let’s be honest. Micron just brought the most advanced DRAM manufacturing to U.S. soil and is massively expanding its U.S. footprint with CHIPS Act support. Its CEO says AI’s growth is now limited by memory, not chips alone: every AI token needs lots of fast DRAM and HBM, and that demand is exploding. HBM is sold out, AI could be over half of total memory demand this year, and Micron has dropped consumer/retail to focus on Nvidia and hyperscalers. Consensus is treating this like another typical memory cycle, but it’s not, AI has structurally changed the business, and Micron still trades at a significant discount to the broader market despite its new growth profile; if it simply rerated to a roughly market‑level multiple on its expected earnings power, the stock would be substantially higher than today’s price. It’s amazing how Wall Street still models this AI build‑out as if it were just another product cycle, a one‑off launch that spikes memory demand and then fades, when in reality they are still assuming the old boom‑bust pattern driven by device launches, not a structural, open‑ended surge in AI‑driven memory demand.

Food for thought. Why Mega-IPOs Signal Scarcity, Not Excess. SpaceX a core holding. Narrative doomers warn of a wall of stock supply as SpaceX, OpenAI and Anthropic prepare IPOs worth $4T combined. But this is not excess, it is rebalancing. US public listings have halved since the 1990s, from 7,000 to under 4,000. Institutions are overweight illiquid privates, underweight tradeable growth. These listings catalyse rotation, not capitulation. SpaceX becomes a core holding, marking a generational entry point rather than a cyclical top.

The US Economy is re-tooling. 👇

Like I said. 👇 The incompetence is historic.

Let’s be honest. Warsh at the Fed. Kevin Warsh’s arrival at the Federal Reserve is not a personnel change. It is a regime change attempt inside an institution built to prevent one. A supply-sider now runs a central bank hard-wired for Keynesian demand management, and the machine is already resisting the new code. The next mistake is visible in plain sight. Keynesians on Wall Street and inside the Fed are treating a supply shock as if it were a demand boom and calling for tighter money. This is dogma masquerading as seriousness. A chokepoint in the Strait of Hormuz, a jump in energy prices, and a cost shock rolling through transport, food, and manufacturing are not evidence of overheated demand. They are evidence of a damaged supply side. Monetary policy cannot reopen a shipping lane. It cannot pump more oil. It cannot repeal geopolitics. It can only crush demand somewhere else, usually with a lag, and usually in the most interest-rate-sensitive corners of the economy first, housing, commercial real estate, capital spending, and durables. Those sectors did not close the Strait. They are simply first in line to pay for the Fed’s intellectual mistakes. That is the Keynesian reflex in its purest form. Every price spike becomes “inflation.” Every inflation scare requires a rate move. Every rate move is advertised as proof of resolve. It is nonsense. A change in relative prices caused by a supply shock is not the same thing as an inflationary spiral. Pretending otherwise is how central banks turn an external shock into a domestic recession. Machiavelli explained why change is so hard. The innovator makes enemies of everyone who did well under the old order and wins only lukewarm defenders among those who might benefit from the new. Christensen gave the same warning in corporate language. Incumbent institutions kill disruptive change because their processes, incentives, and prestige are built around the existing model. That is the real problem Warsh faces. The resistance is not incidental. It is structural. The test for Warsh is not whether he can sound tough on television. It is whether he can resist the Wall Street catechism that every supply shock must be met with tighter money. If he hikes rates into a supply-driven price spike to prove his anti-inflation credentials, he will not have broken with the Keynesian regime. He will have submitted to it. This is not the 1970s. Expectations are not unanchored, and the productive economy is already scarred by years of policy excess, fiscal decadence, and institutional bias. The hope is that Warsh understands the difference between inflation and a supply shock, ignores the Keynesian pundits, and refuses to compound one policy error with another.

@profplum99 Congratulations. Commissioning Week in Annapolis.

You have to admit… it beats cap and gown! Congrats ‘26!

Food for thought. Canada’s constitutional crisis did not appear overnight. It is the predictable result of decades of economic policy that penalizes productivity, suppresses resource development, and redistributes wealth away from the province that sustains the federation’s fiscal base. Alberta’s looming referendum on separation should surprise no one. IMHO the core issue is not separatism. It is asymmetry. Quebec has long exercised economic and political latitude, often backed by the credible threat of secession. Alberta, by contrast, is expected to finance the federation while accepting federal policies that undermine its primary industry. That imbalance is no longer tenable. At the center of the dispute is Canada’s equalization regime. In theory, it ensures comparable public services across provinces. In practice, it has become a structural transfer system that rewards stagnation in recipient provinces while disproportionately burdening Alberta’s economy. One province produces. Others redistribute. The incentives are backward, and the politics are corrosive. This might be manageable if federal policy were neutral toward Alberta’s economic strengths. It is not. Over the past decade, Ottawa, backed by the Trudeau Liberals and the NDP, has pursued an industrial strategy explicitly hostile to oil and gas development. Pipeline projects have been delayed or canceled outright. Regulatory hurdles have multiplied. Global capital has taken the hint and moved elsewhere. The consequences are clear: declining investment, reduced growth, and a measurable erosion in Alberta’s standard of living. Meanwhile, provinces less exposed to resource development continue to benefit from transfers financed in large part by Alberta’s shrinking surplus. This is not simply an economic grievance. It is a crisis of legitimacy. No federation can endure when a productive region believes it is being systematically disadvantaged by national policy. Whether Ottawa sees its agenda as climate leadership or not is beside the point. In Alberta, it is experienced as economic containment. A referendum is not yet secession. It is leverage, something Quebec has used effectively for decades. But it is also a warning. If Ottawa continues to dismiss Alberta’s grievances, it risks turning a bargaining tool into a break. Canada’s unity has always rested on a basic sense of fairness. That foundation is now cracking. Alberta’s referendum is not the cause of the crisis. It is the consequence.

Japan CPI below expectations, 1.4% YoY Anyone notice the dramatic fall in the price of Rice?

Simple rule. Don’t bet against Elon. 👇

On its 250th anniversary, America faces not decline but imbalance. After World War II, it chose to rebuild the world, not dominate it. Now it must adjust, realigning power through an America 1st strategy to restore growth and sustain leadership. Whether it continues on Trump’s path remains uncertain; elections have consequences. America at 250: Museum or Nation? realclearpolitics.com/articles/2026/…