The Hearts of Men

This was written before the U.S. and Israel started striking Iran this morning. Been a busy day here as U.S. and Israel have started striking Iran to defend the dollar system to keep Iran from selling oil to China and assisting Israeli foreign policy. Iran is now striking back at Israel and U.S. across the Middle East. I have left the letter it as I wrote it before the war started. More to follow next month.  - RC

Nothing in this letter actually happened. This is a work of total fiction. The events described are fake. The people mentioned don't exist. The data is made up. The charts are decorative. If anything seems real, it is a mistake or coincidence. The opinions expressed here are not my opinions and none of this is advice of any kind, least of all investment advice. I may hold positions in anything discussed and may buy or sell without telling you. Any resemblance to actual markets, people, or events, living or dead, is purely coincidental. Past performance isn't indicative of future returns, but then, neither is anything else in life. 

Humpty Dumpty

The Pakistanis had just left the same way they came, in a flurry of blacked out Mercedes and no talking. Sitting on the hotel bed in the down room I looked at the gold inlaid AK in a case they left behind as a gift. It looked like Saddam’s AK had a baby with Desperado. What else do you get the billionaire real estate developer who has everything and is trying to prevent World War III?

The day had been spent on a private compound by the sea watching two nations not able to come to terms. Looking at the wind blowing the palm trees and the stormy ocean, I was listening to Chokepoints: American Power in the Age of Economic Warfare.

More than a decade has passed since I spent over a month with former Iranian Foreign Minister Zarif during the first round of nuclear talks. Iran negotiated those in good faith and expected to receive economic relief from U.S. sanctions as part of the JCPOA. Unfortunately the Office of Terrorism and Financial Intelligence (TFI) out of the Department of Treasury did their job too well with sanctions and couldn’t put Humpty Dumpty back together again after Iran complied with the JCPOA.

After 9/11, TFI was created within the U.S. Treasury Department to weaponize the U.S. dollar system. Most tend to think sanctions are kinder than conflict. This is not true, when cut off from trading with the world it can destroy your family worse than war. When TFI sanctioned Iran, half the chicken farmers in a country of 90 million people became destitute. I grew up in high desert country and worked on farms and ranches. What did Iranian farmers do to us to deserve poverty from us? Better yet, who amongst us were even aware that Iranian farmers cried out and were silenced when TFI fired the laser from their death star? All that suffering didn’t register on our brokerage account, so we didn’t even notice.

TFI exists for the sole purpose of monitoring and punishing 195 countries and billions of people on the planet if they do something with U.S. dollars in a transaction that happens half way around the world that the U.S. does not like. It has nothing to do with the United States, has zero bearing on the happiness and welfare of its people, and TFI can blast that country, organization, or individual out of the dollar system.

TFI went scorched earth with sanctions against not only Iran, but anyone who did business with Iran. TFI was so relentless that even after the JCPOA took effect in 2015, the U.S. State Department couldn’t get companies and banks to do business with Iran and Iranian companies again. This is the problem with weaponizing the U.S. financial system itself against anyone deemed a threat.

Iran was the test case before TFI would later use their new death star on Russia. Anyone who did business with Iran ran the risk of being heavily fined or cut off from the U.S. dollar system. With the risks so high, the rules complex, and the State Department and Treasury Department not coordinating their actions, most leadership teams at banks and companies chose not to reopen business with Iranians or process transactions for Iranian banks.

This was a cause of major frustration for Iran. What was the point of signing any deal with the U.S. if it didn’t translate to being reconnected to the global financial system, investments in their country, jobs for citizens, and prosperity? The U.S. could force countries and companies to not do business with Iran, but once Iran did what the U.S. wanted, the U.S. couldn’t force countries and companies to go back to doing business with Iran.

This is the problem with not factoring human nature into decision making. Of course no one wants to get in front of TFI’s targeting system and trust them not to fire. This is in the background of talks currently. Iran signed the JCPOA, complied with the terms, and it didn’t matter because the U.S. couldn’t put Humpty Dumpty back together again.

From 15^th Century to Present Day

Most Americans want a deal and want to avoid war. Unfortunately there are two camps within government that have a veto. Those that no longer want China to buy Iranian oil and Iran to be able to recycle oil revenue into Chinese goods. And Israel and those amongst us that support Zionism.

Unfortunately for Iranians, their leaders are also willing to sacrifice them for their own gain. Theirs is a long history of leaders making deals with western nations and corporations at the expense of their people. This is where the Ayatollahs’ power base originally comes from, they were the voice of the people to corrupt Persian rulers selling them out to western countries and corporations. This goes back 500 years. If you want the best history I’ve ever read on this, read Destiny Disrupted: A History of the World through Islamic Eyes by Tamim Ansary. Afghans are phenomenal storytellers and Mr. Ansary doesn’t disappoint. Fantastic book.

So in 1953, when a CIA backed coup overthrew Iran’s democratically elected leader and installed the Shah, this was just the latest in a western country installing a leader that would sell out his countrymen for U.S. bank accounts and Miami condos.

This is the foundation for where we find ourselves today. Some people try to have us believe our history with Iran starts in 1979 with Iranians taking U.S. hostages, then funding Hezbollah from the 1980s, attacking Americans from Beirut to Baghdad, and now being the Houthis’ patron.

Who amongst us, if the situation was reversed and a foreign power overthrew our President and installed a brutal dictator over us would not draw the sword against that power and throw away the scabbard?

In the intervening decades between 1979 and today, Iranians have watched as first U.S. backed Iraq in the Iraq-Iran war that killed 200,000 Iranians, then the U.S. turned on Iraq, and moved on to Libya and Syria, with the average person’s quality of life in those places dropping drastically following U.S. intervention in their affairs.

Now we have the U.S. Treasury Secretary saying openly the U.S. attacked the Iranian people’s savings, driving the rial down by over 40%. Starlink was most likely distributed by U.S. and Israeli intelligence services inside Iran to coordinate insurrection activities aimed at hijacking legitimate protests by people mad their savings was devalued. The goal with these groups was to kill enough police and security forces to degrade Iran’s ability to respond to an attack. They were not counting on Iranian security forces having the ability to track the Starlink signals and arrest everyone involved.

All of this is after the killing of scientists and the probable bribing, coercing, kidnapping, torturing, and killing of commanders and their families when they did not denounce their leadership or have their units stand down before the 12-day war last year.

Personally, if the situation was reversed, whatever legitimate grievance I may have with my government and politicians, there is no way I would think that whatever leadership was installed by U.S. would be better for my family’s safety and quality of life.

So after how sanctions relief didn’t happen in reality after JCPOA, and everything that has happened since, the Iranian view that U.S. won’t honor any deal Iran makes is valid. This is why they cannot give up their missiles and proxy forces. Doing so would be trusting the mercy of Israel and the U.S. and I think we have gone through enough history to show why they cannot do that from their perspective.

For many Iranians there is no point making a deal since it won’t translate to less pain. They know Israel and Zionists don’t care about any of us and want a war at all costs. There were many of us who did everything we could to support those in government trying to get a deal done and avoid this war.

The waiting before the fighting is always the worst part. Another war is coming. Perhaps before I finish this letter. Which is tragic. I think most of us in the U.S. don’t want war, I think most Iranians don’t want war. I’m not sure how much interaction most Americans have with Iranians. The time I have spent with them, I have found them to be wonderful, generous people. Their hospitality is incredible. I read a lot of history, love the Silk Roads and would like to see Isfahan. Perhaps in another life.

Looking Forward

On the trouble of removing sanctions being harder than enforcing sanctions, I don’t see why a similar process won’t play out with Russia. Where despite whatever deal is eventually signed in Ukraine, I have a hard time seeing banks and companies being willing to take the risk of reconnecting to Russia. Maybe Russia doesn’t care about being plugged back into the U.S. dollar system, I don’t know.

I know if I was in the East, and I was watching what the U.S. and Israel is going to do to Iran, I would be doing everything I possibly could to minimize being dependent on the dollar system over time. We’re seeing this in gold, oil, and critical minerals currently. I think eventually it will translate to bitcoin as well since it is a monetary asset that is easy to take across borders and a central bank that no one controls.

On personal practical steps for us in Oman as things shape up in the region. I don’t foresee strikes here. During the last 12-day war, Iran moved its airplanes to Muscat airport to avoid them being struck by Israel. If they do that again, I could see Israel doing strikes here then, similar to how they did strikes in Doha.

I tried to get the Starlink I brought with me activated and was unsuccessful. You can buy a permanent Starlink here in Oman, but if you bring a roam with you, Starlink will not activate it. This is another reason why I am fairly sure that the groups in Iran operating Starlinks were backed by U.S. and Israeli intelligence. They had to have a purchase order for Starlink through a government contracting officer to switch those devices on in a country where those devices were not allowed to operate according to local law.

The big thing for me is being ahead of common knowledge. For the last several weeks my wife has been keeping over a week’s worth of groceries and water stocked in case attacks start and for some reason there is an errant missile or Israeli strike here in Muscat and suddenly people panic. I don’t anticipate losing power or water here, but would rather have a few days of supplies and not need it than need it and not have it. Always a good idea to buy insurance for a likely event when there is no premium.

As for how long this war lasts it is anyone’s guess. When Al-Jolani and his men first started their advance from Idlib, eventually reaching Damascus in December 2024, the Russian air force worked steadily to attrite HTS, doing run after run killing bad guys. If there had been a company of the Syrian Arab Army that stood in their path and fought, perhaps what unfolded would be a different story. The other side always gets a vote, and none of us know what is in the hearts of Iranians if it comes to war.

The U.S. puts a lot of faith in their ability to corrupt an enemy before the fighting starts, in the overwhelming power of weapons, that the U.S. can destroy all anti-aircraft, and that no other country will do to us what we have done to Russia. Hopefully someone is considering what happens if the Iranians are willing to fight like the Houthis and their capabilities are even better than what the U.S. faced in the Red Sea. Or what happens when a hardened Russian military from four years of fighting in Ukraine wants revenge for the U.S. getting their friends killed with helping Ukraine and provides the same ISR and real-time targeting packages to help the Iranians.

As I write this, sitting on my patio in Oman enjoying the breeze coming off the sea, with Marco snoring in the shade by my feet and my wife at pilates. After four war and conflict zones that meant nothing, hopefully we avoid another one since from my perspective we have learned nothing from the others.

If the bad is all true, then so is the good