War's Binary Outcome and Bonds

Louis-Vincent Gave, founder and CEO of Gavekal Research, joins Julia to break down the three prices that drive every investment decision — the dollar, the 10-year treasury, and oil — and why right now all three are flashing red. With the Strait of Hormuz under threat, Louis explains why he sees oil heading toward $120 and why that number breaks the global economy. He makes the case that the traditional 60/40 portfolio is dead and should be replaced with 60% equities, 20% precious metals, and 20% energy. He reveals why the Chinese renminbi is the most undervalued asset on the planet, why China already won the trade war, and why the US is in greater danger of crushing its allies than itself. One of the most thought-provoking macro conversations you'll hear this year.

Links: https://web.gavekal.com/

https://x.com/gave_vincent

Timestamps:

0:00 Intro and welcome 01:22 The 3 prices that drive everything: dollar, 10-year, oil 2:38 Oil went from $65 to $85 — but Louis fears $120-150 4:08 Why the oil futures curve isn't pricing in a prolonged crisis 5:06 Dollar bear market — why the rebound won't last 6:28 "If truth is the first casualty of war, bonds are a close second" 6:53 The binary outcome on Iran — both scenarios are bad for bonds 7:51 Regime change = Berlin Wall moment — but real rates explode 9:44 "Tails I lose, heads I don't win" — the bond market trap 11:33 $100 oil and Trump's political predicament 13:41 Trump wanted lower energy — "the road to hell is paved with good intentions" 14:06 Why $100 oil is "right pocket, left pocket" for the US 15:58 The real victims: Europe, Taiwan, Korea, Japan 17:23 90% of Hormuz oil heads east — not to the US 18:39 Missing 15 million barrels: prices skyrocket or demand collapses 20:28 Why energy is the best hedge for your portfolio right now 21:50 The new portfolio: 60% equities, 20% precious metals, 20% energy 22:07 The four quadrants framework explained 25:40 Why the 60/40 portfolio is officially dead 27:52 Gold is NOT an inflation hedge — what it actually is 28:37 Why central banks started buying gold after Russia asset seizure 30:08 Western retail has completely missed the gold bull market 31:32 The broken equation: US treasuries no longer equal commodities 32:59 The next shift — stockpiling physical commodities 33:15 "I'm bearish on the dollar and treasuries — but the US has pocket aces" 34:38 Four pillars: fundamentals, momentum, positioning, valuation 36:40 Where Louis sees opportunity: Chile, Brazil, China, South Africa 37:21 China for beginners — the biggest misconceptions 39:05 China's growth miracle — it wasn't central planning 42:06 The Hunger Games of capitalism 44:24 How China really views the Iran war — purely economic 46:46 The most underappreciated macro theme right now 48:19 "Stupidly, stupidly undervalued" — the renminbi slam dunk trade 50:41 Why China kept the RMB artificially low for 8 years 51:49 The weaponization of China's own savings52:35 "China went to the gym" — why it could stand up to Trump 54:18 Who won the trade war? 56:12 The one risk keeping Louis up at night 57:08 "$120 oil breaks stuff" — the number to watch