Step 1: Gather Information, Step 2: Act!

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/step-1-gather-information-step-2-act/

Oil professionals are increasingly stumped by the official headline price of oil as compared to the much higher price for refined products.

Paul Kiker and I discussed the ‘crack-spreads’ for oil, which is the difference between the price of crude oil itself and the refined products from that oil. The higher the spread, the higher the disconnect between the price of oil and gasoline and diesel.

On that basis, the ‘fair price’ for oil right now is $100/bbl, yet it is now below $70/bbl.

#Oil inventories and crack spreads suggest ~$110 WTI is fair value based on historic relationship. Drop in oil price didn’t help lower end product prices as much. Inventories are still being drawn. Oil always overshoots to the downside so then it will likely overshoot to the… https://t.co/C7GLpNmiNU pic.twitter.com/TkW52MQyPs

— Namzes Cycles (@Namzes_G) July 1, 2026

One reason for the higher price for gasoline and diesel in the U.S. is that the inventories for these products are extremely low (red circles) while refineries are operating at max capacity (green circle):

Meanwhile, the Strait of Hormuz situation remains fraught with risk, with openings and closures and reopenings sometimes all being announced on the same day.

One thing we can say with certainty, the price of oil has been far too low to crimp demand as indicated by global Jet traffic near all-time highs, while US April oil demand showed robust 2.9% yr/yr growth:

Artificially low oil prices are driving record US oil demand growth.April demand: +2.9% YoY, the strongest April on record.We're depleting inventories at a record pace to keep consumers happy, even as the world continues to lose millions of barrels per day in production.… pic.twitter.com/0frZAKLboh

— Lukas Ekwueme (@ekwufinance) July 1, 2026

How much does the U.S. defense of the petrodollar have to do with all of these price shenanigans? Paul and I have a go at that topic.

Meanwhile, over in the world of equity markets, there has been a rash of warnings, one coming from Bank of America itself, which is now warning clients of the possibility of a major retraction in equity prices.

We also discussed:

  • Record equity valuations exceeding 1929/2000 peaks even when viewed by a broad pool of valuation metrics.
  • Another massive surge in margin debt for May; a stunning $111 billion one-month increase to $1.42 trillion.
  • Credit card delinquencies nearing 2009 highs (13.1% 90+ days).
  • The yen is rapidly weakening, exposing carry trade fragility and Japan’s demographic/debt pressures.
  • AI bubble concerns: Chinese hedge funds warn of an AI ‘super bubble’, the BIS warned on financial stability risks from hyperscaler capex/debt; lack of moats, high costs, and over-hype.
  • Buffett indicator now at 240% (equity/GDP), signaling a powerful gambling sentiment.

Add it all up, and it remains a time to be cautious and to employ tactical risk-managed strategies for preserving wealth. Remember, when bubbles burst, it’s mathematically impossible for a majority of people to dodge the losses.

The only way to join the successful minority is to see things coming in advance and then take the emotionally difficult stance of ducking out of the party while everyone else is in full party mode.

To begin that process with Paul and his team, click the image below.

Timestamps

00:00 Introduction and Welcome
01:22 Understanding Oil Price Confusion
02:56 The Dynamics of Oil Supply and Demand
04:31 Market Manipulation and Future Demand
08:53 The Strategic Petroleum Reserve and Its Implications
11:27 The Role of Paper Trading in Oil Markets
13:47 Geopolitical Tensions and Oil Supply
18:13 The Petrodollar and Global Currency Dynamics
23:14 Energy Infrastructure and Future Investments
24:21 Navigating Market Risks and Opportunities
30:57 Consumer Behavior and Economic Implications
32:46 Market Warnings and Future Predictions
34:49 Market Valuations and Downside Risks
36:05 Consumer Debt and Economic Health
36:49 Global Financial Dynamics: Japan’s Yen Crisis
41:21 The Impact of Debt on Society
42:08 Market Psychology and Investor Behavior
45:42 Margin Debt and Market Vulnerability
48:39 Energy Shocks and Economic Stability
50:16 Bitcoin’s Market Dynamics and Risks
57:41 The AI Super Bubble and Its Implications
01:01:46 Warnings from Financial Experts
01:06:45 Investment Strategies in a Bubble Market

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.<

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I haven’t listened yet but I’m trying to understand the extent of the AI bubble. Micron is making tons of money. Is it that the software side is overvalued, which then translates to hardware? So basically, when the AI software bubble pops, so will demand for the hardware? Or is the demand for chips so high regardless so there will still be ample room for profits in chip manufacturers?

They are putting in tons of datacenters so this must equate to legitimate demand for something. If the AI bubble pops then does the datacenter proliferation also stop? If there isn’t enough energy to run them presumably this could also slow down the train?

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July 3rd….

If the U.S. invades Iran, it may be Pickett’s Charge 2.0?

“Pickett’s Charge was an infantry assault on July 3, 1863, during the Battle of Gettysburg. It was ordered by Confederate General Robert E. Lee as part of his plan to break through Union lines and achieve a decisive victory in the North.”

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The great Shaman, Michael Yon, at least once used the term “Imperial Panic” to describe the U.S. now. So, Michael Yon is basically auguring a tragic U.S. military defeat? But, for some strange reason, Michael Yon still queries: “Will They succeed? I don’t know.”

But, isn’t a tragic impending US/ Zi…nstd imperial defeat in Iran as plain as the nose on one’s face?

“Reality Is Approaching Quickly”

I hear the train a-comin’, it’s rolling ‘round the bend
And I ain’t seen the sunshine since I don’t know when
I’m stuck in Folsom prison, and time keeps draggin’ on
But that train keeps a-rollin’ on down to San Antone

When I was just a baby, my mama told me, “Son
Always be a good boy, don’t ever play with guns”
But I shot a man in Reno just to watch him die
When I hear that whistle blowin’, I hang my head and cry

Folsom Prison Blues

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What is the equivalent of Folsom Prison in Canada?

Do they now Euthanize prisoners in Canada? Are Canadian prisons now “Death Camps”?

When I was a kid, parents would often send you to “Summer Camp” to get you out of their hair for 3 months.

One time, there was a plague that swept through the “Camp”, and the Camp infirmary had to bring in extra beds to cope with the dysentery that probably was caused by one of disgruntled black ladies or black gentleman who took a dump in the oatmeal to get back at the White Ruling Power Structure in “The Camp”.

There was typically a belligerent Camp bully who you’d have to get even with either directly or indirectly….

“Reality Is Approaching Quickly”

I hear the train a-comin’, it’s rolling ‘round the bend
And I ain’t seen the sunshine since I don’t know when
I’m stuck in Folsom prison, and time keeps draggin’ on
But that train keeps a-rollin’ on down to San Antone

When I was just a baby, my mama told me, “Son
Always be a good boy, don’t ever play with guns”
But I shot a man in Reno just to watch him die
When I hear that whistle blowin’, I hang my head and cry

Folsom Prison Blues

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“Go Where You’re Treated Best”

Odell: “I can’t Go Where You’re Treated Best…you idiot…It’s a Prison!”

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At the “Retail-Level”, I think that it’s more like a Prison?

Question for Grok:

Why is the metaphor of an “Ant Hill” suitable for describing the global U.S.-dominated financial system? Is there a better analogy or metaphor to describe the global financial system?

Grok:

The ant hill metaphor fits because it captures a system that’s decentralized yet highly organized — thousands of independent agents following simple rules create an intricate, resilient structure with no single boss in charge, much like how traders, banks, and markets interact to form global finance. The US sits at the center, like the queen or main chamber, controlling key flows (dollar clearing, SWIFT) that everyone depends on, even though the activity looks chaotic from the outside.

It’s also fragile in a specific way: kick the anthill and the whole thing panics and scatters, just like how disrupting US-dominated infrastructure can freeze global payments.

A stronger analogy is the “plumbing” or “underground empire” — the hidden pipes, chokepoints, and hubs (dollar system, SWIFT, clearinghouses) that everyone routes through. The US didn’t fully plan to dominate it, but ended up controlling the critical junctions, turning neutral infrastructure into a tool of power. It’s less about busy insects and more about who owns the pipes.

Another good one is the sandpile — grains of risk or debt keep piling up until a tiny addition triggers a massive slide or avalanche, mirroring how small shocks can cascade into systemic crises in interconnected finance. Which one resonates more with you?

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I highly recommend that you go fishing.

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I have no idea why you are having any trouble understanding this. It’s all spelled out right here:

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Just kidding of course. It’s an impenetrable mess and the goofy graphic above doesn’t even begin to do it justice with the SPACs and vendor-financing deals and an entire galaxy of clever off-balance sheet activities.

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My current joy is feeding the fish we stocked… I should do it 2x per week they tell me.

I feed them 2x per day.

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Regarding the question about yuan and petro dollar. I thought the system was a done deal. I dont think they would risk exchanging in dollars at this point. Notes below.

It feels like Trumps day job is trading and his weekend side hustle is arms dealing.

Deepseek:

China purchases roughly 80-90% of Iran’s crude oil exports, with around 1 to 1.5 million barrels per day continuing to flow during the recent conflict .
· Yuan Settlement: Most of these purchases are now settled in Chinese yuan (RMB) rather than U.S. dollars . This volume has been estimated to have exceeded $550 billion by early 2026 .
· Example: Even India used yuan to pay for limited Iranian oil cargoes during a brief sanctions waiver, routing payments through ICICI Bank’s Shanghai branch—proving yuan is the go-to currency for this trade .

The trade bypasses the U.S. dollar through several coordinated mechanisms:

· Alternatives to SWIFT: Transactions are routed through China’s Cross-Border Interbank Payment System (CIPS) and specialized financial institutions like Bank of Kunlun, which are designed as alternatives to the U.S.-dominated financial network .
· The “Toll Booth” Strategy: During the Hormuz conflict, Iran reportedly offered safe passage for tankers specifically in exchange for yuan settlements . This directly links military geography with monetary strategy .

This system allows Iran to earn substantial revenue despite sanctions—by some estimates, up to $43 billion from oil exports last year—while China secures cheap energy and advances the yuan’s international role . Although Beijing officially claims ignorance of this trade, the infrastructure and scale of the transactions clearly indicate official tolerance and support .

This directly supports your “done deal” intuition

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Hey, I just SHORTED oil! I bought about $10,000 of airplane flights (I couldn’t resist, the prices were approximately the same as I paid last year) for use throughout July – mostly beginning July 17-24. And I paid for it – get this stroke of genius – with CREDIT CARDS (so I can count on the banks behind the cards to step up for me if the airlines pull any funny stuff…like cancelling a flight on account of jet fuel shortage).

See? Anyone can play the game! :wink:

Now for the hard question: I want to buy an oil company which has plenty of oil already on hand, or in the ground (in the US or Venezuala, but not the middle east.

Or I want to buy a company which already has loaded up on the oil companies which have massive secure supply reserves at low current prices.

Can anyone suggest some good companies – and why? It seems like a likely huge win on a one year timeline or so. Can anyone make some suggestions? I wonder where Berkshire might be on this trade? The new CEO, Greg Abel, supposedly has some experience…

There MUST be some big money companies which are primed and waiting for the markets to hit a wall?

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Thank you for posting! I’ve heard Michael Yon referenced, and sometimes interviewed, on various podcasts but never seen him before. It is nice to put a face with the voice.

Yeah, it is nuts what is going on in the world – no doubt about that. It is nice we can now start to talk openly about Zionists with a distinctive label, separate from genetics and religion.

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Now we know what the heavy equipment is for, and why the Bulls are nervous

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