Tom welcomes back Luke Gromen of Forest for the Trees back to the show. Luke discusses how Russia has proven to be far more resilient than the West expected. They are massively miscalculating Russia’s true GDP, which can be calculated based on the value of a barrel of oil. We’re now seeing the consequences as Europe and the U.K. both have an energy crisis. The U.S. has tried to mitigate the impact by dipping into the Strategic Reserve. He says, “If you want to understand the true value of oil, fill up your car, go for a long drive until you run out, and then push it back to where you started.” We’ve had the worst year in treasury markets since 1798. Russia was successful in defending their currency since they required ‘less friendly’ buyers to pay with Rubles. The West wants to cap Russia’s energy prices, but that seems quite unrealistic. The U.S. is seeing shortages of distillates and high diesel prices, while inflation remains persistent. There is a feedback mechanism between energy, inflation, and sovereign debt markets. Energy is required for everything, and cheap energy is necessary to maintain the system at current sovereign debt levels. We are starting to see debt sustainability issues. Energy eventually connects back in a feedback loop, as everything is inter-related. At some point, things break, as we’ve seen with the U.K. pensions. Rising dollars create a bad situation for everyone. It weakens domestic corporations and ultimately turns everything into a balance sheet contest. There is an argument that running the dollar up will hurt the U.S. last, but what if the U.S. is wrong this time, and it doesn’t hurt Russia, China, and India that much. Countries seem to be accumulating gold instead of dollars, and a recent buyer of 300 billion worth did not their identity. This is starting to look like a transition away from the dollar and into gold. OPEC may have been making a strategic move with Saudi Arabia. They realize that if the West can choke out Russia, then they’re likely next. Also concerning is that the U.S. has demonstrated its willingness to steal FX reserves of other nations. Gold is likely to be a politically managed metal until the day it is not. The Treasury recently stated on Monday that the U.S. Federal deficit is expected to double next year. This throws pressure back on the Fed and certainly means that rates and the dollar will continue rising. It looks like the Fed and Treasury are fighting. Once the U.S. fiscal situation gets acute enough, you’re going to see gold take off. When the Fed finally pivots, it should be good for both energy and metals markets. Currently, energy is looking excellent compared with treasuries. A Fed pivot is likely to happen sooner rather than later, but they have not budged so far. Larry Summers has stated that we are nearing a “doom loop”.