Is This the Covid-Like Calm Before the Storm?

Finance U Public Finance U
, ,
1

Originally published at: https://peakprosperity.com/is-this-the-covid-like-calm-before-the-storm/

In this week’s podcast Paul Kiker and I discussed how import inflation was already running extremely hot in February (17% annualized!) before the Iran War-of-(ill-advised)-choice kicked off.

Now we’re all going to have to adjust and brace, at a minimum, for much higher inflation over the next few years. At worst, we’ll be battling shortages and supply shocks at the same time.

Paul’s approach to portfolio management strictly adheres to a disciplined risk-management approach. Coming into this crisis, Paul’s base portfolio was already conservative, and his team is ready to sell any positions that breach pre-determined technical support levels.

Both of us observed how the US financial markets leading up to this recording (on March 26th, 2026) had a pre-Covid feel to them. Too calm given what was obviously approaching. Markets seem to be repeating the 2020 pattern of ignoring clear warning signs until the shocks hit suddenly.

However, today’s energy-supply destruction (oil fields, natural-gas facilities, Russian export capacity down 40%) is not reversible overnight like COVID lockdowns. The coming shocks are not like those of either the GFC in 2008 or Covid where human ignorance and decisions could be ‘papered over’ by the Fed.

Energy shortfalls directly translate into economic decline. Months-to-years of energy production shortfalls are expected. This shock is therefore completely unlike either the GFC or Covid.

For those nearing or already in retirement, Paul’s advice is:

  • Stress-test all plans at 5.5% compounded inflation (most plans use 2–3%).
  • Passive buy-and-hold is dangerously exposed; 50% drawdowns require 100% gains just to get back to even.
  • Build a 24-month cash/liquidity buffer.
  • Build 1–3 months of food & supply resilience
  • Obey the first rule of “Do no harm,” which translates into “Minimize losses.”
  • Prioritize active defensive positioning and adhere to strict risk rules

Click below to secure your meeting with Paul Kiker and/or one of his team.

Timestamps

00:00 Market Uncertainty Amid Global Conflict
03:03 Inflationary Pressures and Fed Challenges
05:55 Risk Management Strategies in Volatile Markets
09:11 Political Dynamics and Market Reactions
11:51 Comparing Current Events to COVID-19
15:08 Energy Crisis and Economic Implications
18:02 Market Manipulation and Investor Psychology
21:07 The Role of Supply Chains in Inflation
23:52 Global Economic Interdependencies
27:12 Historical Market Lessons and Future Outlook
36:48 The Pitfalls of Passive Investing
40:45 The Energy Crisis: Oil and Gas Insights
52:20 Inflation and Economic Strategies
01:04:09 Preparing for Market Volatility

FINANCIAL DISCLAIMER:

The information contained in this video and the resources available for download through our affiliated website are not intended as and shall not be understood or construed as financial advice, nor should be interpreted as a solicitation to sell or offer to sell investment advisory services. No person who currently works for or contracts with Peak Prosperity or Peak Financial Investing is an attorney or accountant, nor are we holding ourselves out to be, and the information contained in the video and on the website is not a substitute for legal or tax advice from a professional who is aware of the facts and circumstances of your individual situation. While Peak Financial Investing is a registered investment advisor, please note that this podcast is not intended to be investment advice.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. We have done our best to ensure that the information provided is accurate and provides what we feel is valuable information. The views expressed are subject to change based on market and other conditions.<

No guests or clients appearing on the podcast receive any form of compensation for their appearance and obtained no other benefit from either Peak Prosperity or Peak Financial Investing.

All investing involves risks including the possible loss of capital. Asset allocation and diversification does not ensure a profit or protect against loss. Please note that out- performance does not necessarily represent positive total returns for a period. There is no assurance that any investment strategy will be successful. All investments carry a certain degree of risk. Dividends are not guaranteed, and a company’s future ability to pay dividends may be limited.

Additional important disclosures for Peak Financial Investing may be found in our Form ADV Part 2A, which can be found at https://adviserinfo.sec.gov/firm/summary/319672.

4 Likes
2
5 Likes
3

Regardless of what happens in the Middle East, the wrong block has already been pulled out of the jenga tower.

Have thought about one source of cheap amusement though. Now that the age to volunteer for military service in the US has been raised to 42, I think it would be great fun to troll the chicken-hawks. Certainly Baron Trump is the correct age to enlist. But Eric Trump and Ben Shapiro are both still within the correct age range. And for those over 42 there’s the possibility of getting an exception. I think Dan Bongino would be a good choice.

In the last 100 years, NONE of the Trump lineage have served the country. Time to badger the Donald to send his kids into harm’s way since others kids are already dying. It’s the only patriotic thing to do!

19 Likes
4

I think it might be an appropriate rule that no war or conflict can be participated in by our federal government if not enough of their children are on the front lines with the bombs/bullets.

14 Likes
5

And in another piece of bad timing, Cyclone Narelle disrupts production at Australia’s NW Shelf LNG facilities. Presumably not for long, but add it to the list of shocks…

Picture1
Picture1390×302 99.8 KB

6 Likes
6

A truly representative democracy would calculate the number of local elected and appointed officials and determine the percentage they represent.

Just like with gender and racial non-discrimination programs, there must be a statistically equal proportion of politicians and their kids in the military. Their presence determines the overall size of the military and the concentration of “top brass” (which I’m told has gotten saturated at the top).

For instance, if the population of the US includes 10% elected and appointed officials (including state and regional or local officials, down to the school board and dog catcher), then the military must include 10% former and current politicians and/or immediate family members. Similarly, of this military, no more than 10% can be above a certain rank.

Want to start a war and need a draft? You’ll need your family’s buy-in first. Military getting bloated at the top? Someone’s gonna have to either retire or take a demotion.

Military getting out of hand? Reduce the number of politicians- let them age out or eliminate their position and don’t replace them.

8 Likes
7

We can all fantasise about the world that we’d like to exist, but it doesn’t make it so. And it never ever will. We have to live in the “what is”. Not in the “what we’d like”.

3 Likes
8

Its also helpful to imagine what you want and some of the means by which it could happen.

Do this so you can recognize it and move towards it when the opportunity arrives.

3 Likes
9

I don’t think Dan Bongina would be able to serve in any case, as I believe male soldiers need at least one testicle for eligibility.

13 Likes
10
6 Likes
11

Let me guess:

Screenshot_20260327-202203-507~2
Screenshot_20260327-202203-507~21080×1440 106 KB

A= forced conversion to Win11

B= about the third in that series of updates that killed some critical functionality

To its credit (and my relief) consumer grade Linux has come a long way in the last 30years.

7 Likes
12

Cash is king right now.

6 Likes
13

I just shared Paul’s recommendations with my own advisor, for his opinion. Thanks, guys!

…We got into more commodities just as the war was starting, including oil. Happy we did that.

3 Likes
14

Great analogy!
And, all I can say is, NOT MY SON. Borderline genius with a chemical engineering degree, he wouldn’t fight, he would just be recruited to design new exotic killing instruments, probably AI related. I think he would be a conscientious objector, we have had this conversation.

5 Likes
15

I can envision a law which would stop the American war machine tomorrow.

All military spending is paid for on an as-you-go basis. No borrowing of any type.

Instead, every dollar spent is paid for by the immediate imposition of a combination payroll tax/capital gains tax.

With that funding mechanism in place Joe Sixpack unites with the Epstein class to throw the war machine into the dustbin of history. And Lindsay Graham will have to find a way to actually work for a living.

4 Likes
16

I decided that W11 was my line in the sand. I’m not doing it. My W10 laptop works fine, so I’ll use that for work until I can’t. In the meantime, I’ve bought a second hand laptop and I’ll put Linux on it and start playing about. Then, when my W10 machine dies, I’ll know whether I can use Linux for work or not because I’ll have been using it for a bit.

It was a few hundred years ago when it became a thing that the winner of wars was who could raise the most finance. A lot raised through Amsterdam initially.

3 Likes
17

Arrived back in Australia yesterday from Thailand via China. A few observations below:

  1. No observable impacts in Thailand business as usual in Pattaya, fuel steady at 32-35 baht or AUD $1.50/L.
  2. Airports in Bangkok and Guanzou in full swing very busy.
  3. Australia alarmingly quiet on the roads, diesel $3.14-$3.60/L Unleaded $2.65-$3/L. For Americans I travelled 900km from airport to home total cost AUD + $300.
  4. Interesting observation in our country town local restaurant packed. People are enjoying their 15 minute city dutifully.
  5. WE ARE IN TROUBLE!
    Wishing all my Peak Prosperity Family well.
21 Likes
18

Just discovered I can no longer get into PP using WIN7.

3 Likes
19

Ok, that gave me a warm and fuzzy feeling. I must go look at my old computer and see what version of windows is on it. Good on you! Loud applause for holding out so long!

1 Like
20

Has anybody considered that there will be no “markets” open by the end of this year? Everybody already knows the unsustainability of the US debt based monetary system. Why assume that banks will be available to extend more credit, when like the Tower of Babel, all quests for endless growth, either building to heaven or technological nirvana, end in chaos? Religious doctrine aside, the fable of the tower of Babel has been around for thousands of years for good reason, and it isn’t because the great big Suger-Daddy in the sky is looking out for the righteous. No energy = no work, less energy = less work. We all know that it is a prerequisite for the economy that supports our existence, that economic growth is the economic imperative by which we all survive. At what point does stocks, and especially bonds, become irrelevant? When the ship of State is sinking, deeds, titles, paper promises, and all long distance commerce becomes unreliable.

4 Likes