Full transcript
0:00Higher gasoline and diesel prices are
0:02now costing the American economy an
0:04additional half a billion dollars every
0:06single day. Not per month, not per
0:09quarter,
0:10per day. And that number is climbing.
0:13Since February 28th, when the United
0:15States and Israel launched strikes on
0:16Iran, the price of oil has surged over
0:1950%. The Strait of Hormuz, a 21-mi wide
0:22channel that carries 1/5 of the world's
0:25crude oil and natural gas, has been
0:27effectively shut down for the first time
0:29in history. Brent crude is trading above
0:32$110 a barrel. 3 weeks ago, it was $70.
0:36But the price at the pump, the number
0:38you're staring at every time you fill
0:40up,
0:41that's actually the smallest piece of
0:42what's coming.
0:43There are four more waves of price
0:45increases heading toward your wallet
0:46right now, each one bigger than the
0:48last, and most people won't see any of
0:50them coming until it's too late to
0:51prepare.
0:52What I'm about to walk you through isn't
0:54just what's happening to the economy.
0:56It's why your mind is actively working
0:58against you right now, and what that's
1:00going to cost you if you don't over ride
1:01it. Let's start with what you can
1:03already see, gas prices. The national
1:05average has jumped from under $3 a
1:07gallon to $3.70.
1:09In California, drivers are paying over
1:11$5.30.
1:13And diesel, the fuel that powers the
1:1518-wheelers that deliver literally
1:17everything you buy, has surged 36% to
1:21nearly $5.10 a gallon.
1:24Now, the average American household
1:25spends about $2,500
1:28a year on fuel, roughly $50 a week. If
1:31you're suddenly paying $10 or $15 more
1:34per week, that doesn't sound
1:36catastrophic on its own. So, your threat
1:38assessment system files it under
1:40annoying, but manageable, and moves on.
1:43That filing is wrong, and the reason
1:45it's wrong reveals something important
1:47about how we process financial danger.
1:50Psychologists use a concept called
1:52mental accounting to describe the way we
1:54unconsciously separate our money into
1:56invisible buckets. Gas, groceries,
2:00entertainment, savings.
2:02When one bucket suddenly overflows, we
2:05don't sit down and calmly redistribute.
2:08We emotionally react. We slash whatever
2:11feels optional.
2:12Dining out disappears.
2:14The gym membership gets canceled.
2:16That trip you were planning evaporates.
2:19The investment contribution you told
2:20yourself you'd increase this year
2:22quietly stays where it is.
2:24The chief economist at the National
2:26Retail Federation confirmed exactly this
2:28pattern. When gas prices spike, the
2:31first casualties are experiences. Movie
2:33theaters, theme parks, restaurants.
2:37Not because those things got more
2:38expensive, because your survival
2:40instinct reclassified them as luxuries
2:43the moment a mandatory expense jumped.
2:45And that instinct is about to get a lot
2:47louder because gas is just wave one.
2:51Nobody is framing this correctly yet.
2:53The war's economic impact isn't one
2:56price spike. It's a rolling series of
2:58shocks arriving on different timelines,
3:00each one compounding the last. By the
3:03time most people recognize the full
3:05picture, four of the five waves will
3:06have already hit. Wave one, you already
3:09know, gas. It showed up within days.
3:13Wave two is landing now, groceries.
3:15Specifically the perishables. Produce,
3:19meat, dairy. The things that can't sit
3:21in a warehouse waiting for prices to
3:23stabilize.
3:25Diesel powers the refrigerated trucks
3:26that bring those items to your store,
3:28and a 36% diesel spike means the cost of
3:31moving perishable food just went
3:33vertical.
3:35Supply chain researchers confirmed that
3:36grocery stores will be the first place
3:38consumers see higher prices outside of
3:40gas stations, and the less shelf stable
3:43the item, the more exposed it is. But
3:46retailers won't raise prices overnight.
3:48They'll absorb the costs for a while,
3:50just like many did with tariffs over the
3:52past year. The problem is they've
3:54already been absorbing tariff costs.
3:56There's almost no margin left to cushion
3:58a second shock.
4:00One economics professor at Boston
4:01College warned that if oil prices stay
4:04elevated for any meaningful period,
4:06you'll see a persistent cost shock that
4:08businesses simply can't eat anymore. And
4:10when they stop absorbing, the sticker
4:12price catches up fast.
4:14Wave three won't arrive for months, but
4:16it's already baked in. Fertilizer. This
4:19is the wave that should genuinely
4:21concern you because it operates on a
4:22delay that makes it almost invisible
4:25until the damage is done.
4:27Fossil fuels account for up to 80% of
4:30fertilizer production costs. The
4:32countries directly impacted by the
4:34conflict, Iran, Qatar,
4:37Saudi Arabia,
4:39Bahrain, and the UAE
4:42are among the world's top fertilizer
4:44producers.
4:45And 1/3 of the global fertilizer supply
4:47passes through the Strait of Hormuz. The
4:49same waterway that's currently shut
4:51down. So, the food you eat in September
4:53and October is getting more expensive
4:55right now because of inputs that farmers
4:58are paying a premium for this month.
5:00You won't feel this one until fall.
5:02By then, it'll be too late to prepare
5:04for it. And by then, most people will
5:06have forgotten that the seeds of that
5:07price shock were planted in March.
5:10Wave four is airfare. Jet fuel has
5:12surged roughly 85% since the war began.
5:15Airlines from Qantas to SAS to India's
5:18biggest carriers have already announced
5:20fare hikes. And unlike gas, which
5:22fluctuates daily, airlines bake fuel
5:25costs into their pricing models months
5:27in advance. Those higher fares aren't
5:30coming down fast even if oil drops
5:31tomorrow. If you're planning a summer
5:33vacation, your ticket prices are about
5:35to hurt. Wave five is the one almost
5:38nobody has connected yet.
5:40Interest rates. The Federal Reserve was
5:42expected to start cutting rates this
5:44year, which would have lowered borrowing
5:46costs on mortgages, car loans, and
5:48credit cards. That expectation is dead.
5:51Some economists now project the first
5:53rate cut won't happen until the third
5:55quarter at the earliest. If inflation
5:57accelerates further, rates could go up.
5:59If you were planning to buy a home or
6:01refinance, the math just changed
6:04underneath you.
6:05One leading economist warned that when
6:07inflation shocks collide with
6:08geopolitical uncertainty, consumers
6:10don't just cut spending. They freeze.
6:14People delay cars, homes, renovations,
6:18not because they can't afford them
6:20today, but because they've lost
6:21confidence in what they can afford
6:23tomorrow. And when millions of
6:25households freeze simultaneously, that
6:27collective pause can drag the whole
6:29economy down with it. So, let me ask you
6:31this. When you first heard that oil
6:33prices spiked because of the Iran
6:35conflict, how many of these downstream
6:37effects did your mind immediately
6:39connect? One? Maybe two?
6:42You're completely normal, and that
6:44normal fee is exactly the problem.
6:46There's a well-documented phenomenon in
6:48behavioral psychology called anchoring
6:50bias. When you encounter a complex,
6:52multi-layered problem, your mind doesn't
6:55process every layer simultaneously.
6:58It grabs the most visible data point and
7:00uses that as a stand-in for the entire
7:02situation. Right now, for most
7:05Americans, that anchor is the number on
7:07the gas station sign. $3.70.
7:11$4.20.
7:13$5.30.
7:15Whatever it is in your area, that number
7:17has become the proxy for the entire
7:19economic impact of this war. And because
7:21gas prices feel annoying but survivable,
7:24your internal threat assessment files
7:26the whole crisis under temporary
7:28inconvenience. Meanwhile, one leading
7:30economist estimated that the gas price
7:32spike alone could push monthly inflation
7:34to 1% in March, the highest monthly
7:37increase in 4 years. Annual inflation
7:40would approach 3%. And that's before the
7:42grocery shock, the fertilizer shock, the
7:45airfare shock, and the ripple effects
7:47through every consumer good that needs
7:49to be transported anywhere. The
7:51International Energy Agency called this
7:53the greatest global energy security
7:55challenge in history, not a moderate
7:57disruption, the greatest in history. And
8:00your anchoring bias is comparing the
8:02number at the pump to last month and
8:04whispering, "We'll manage." This is
8:06precisely what happened in 2022 after
8:09Russia invaded Ukraine. Gas prices
8:11spiked, people grumbled, then the shock
8:13bled into groceries, rent, services,
8:16everything. Inflation hit 9%. By the
8:19time most people grasped the full scope,
8:21the damage to their purchasing power was
8:23already done. You're not irrational for
8:25missing this, you're running the same
8:27mental software as everyone else, but
8:29recognizing that software is the first
8:31step toward overriding it. Now, let's
8:33talk about what's keeping people up at
8:35night.
8:36Your investments.
8:37The S&P 500 has dropped nearly 7% from
8:40its January peak.
8:42That alone is unsettling, but zoom out
8:45and the damage runs wider than any
8:47single index. The Dow just posted four
8:50consecutive losing weeks, its longest
8:52streak in 3 years.
8:54If you own index funds or target date
8:56retirement funds, you felt this.
8:59The Nasdaq briefly dipped into
9:01correction territory, falling nearly 10%
9:04from its high, dragged down by tech
9:06stocks that were supposed to be the
9:07growth engine of 2026.
9:10And the Russell 2000, which tracks
9:12smaller companies more sensitive to
9:14interest rates, officially crossed into
9:15correction last Friday, down more than
9:1710% from its January high. The so what?
9:20Energy markets tell their own story.
9:23Brent crude surged to nearly $120 a
9:26barrel before pulling back to settle at
9:28$112 on Friday, its highest close since
9:312022.
9:33Gold, which everyone assumed was the
9:35safe haven, spiked above $5,400
9:38per ounce, and then crashed more than
9:4010% in a single week. It's worst
9:42performance since 1983.
9:45Even the safe plays aren't behaving the
9:47way people expected. Wall Street's fear
9:50gauge, the VIX, surged from the
9:52mid-teens to nearly 32.
9:55When you absorb all of that at once,
9:57something happens in your nervous
9:58system.
9:59Your amygdala, the part of your mind
10:01responsible for threat detection, starts
10:04screaming one word, "Sell. Get out.
10:07Protect what's left." This is loss
10:09aversion at work. Research from
10:11Princeton demonstrated that the
10:12psychological pain of losing money is
10:14roughly twice as intense as the pleasure
10:16of gaining the same amount. A $5,000
10:19portfolio loss doesn't feel like a
10:21$5,000 problem. It feels like a $10,000
10:24emergency. Not because you're bad at
10:26math, because your nervous system
10:27evolved in an environment where losses
10:29could be fatal. That wiring hasn't
10:32updated for 401(k)s.
10:34But, what actually happens when people
10:36act on that impulse during geopolitical
10:38crises? According to an analysis by RBC
10:41Wealth Management, across 20 major
10:43post-World War II military
10:45interventions, the S&P 500 fell an
10:48average of 6% during the conflict.
10:50Another study spanning 40 geopolitical
10:52events over 85 years found the average
10:55first month loss was just 0.9%
10:58followed by a 3.4% gain over the next 6
11:01months.
11:02The pattern is remarkably consistent.
11:04The people who sold in panic locked in
11:06their losses.
11:08The people who held through the
11:09turbulence captured the recovery. During
11:12the market crashed in March 2020. 57
11:16days later, it was back to where it
11:18started. Then, it kept climbing. Many of
11:21the people who panic sold at the bottom
11:23never got back in. They sat on the
11:25sidelines waiting for certainty that
11:26never came, while the recovery happened
11:29without them.
11:30And this is where it gets genuinely
11:32cruel. The market's best days and worst
11:35days cluster right next to each other on
11:37the calendar. Miss just 10 of the best
11:40trading days over a 20-year period and
11:42your returns get cut roughly in half.
11:45Miss 20 and you barely beat inflation.
11:49You cannot capture the upside if you
11:51fled during the downside. Behavioral
11:53economists call this the behavior gap.
11:56The difference between what the market
11:58actually returns and what the average
12:00investor earns. That gap exists almost
12:03entirely because people buy when they
12:05feel optimistic and sell when they feel
12:07afraid. The exact opposite of what
12:10works. Not because they lack
12:12intelligence, because they're running
12:14ancient software in a modern financial
12:16system. I'm not going to sugarcoat this
12:19though, because there's a scenario that
12:21keeps serious economists genuinely
12:23worried. Stagflation. Rising inflation
12:26and slowing economic growth happening at
12:28the same time. It's the worst case
12:30scenario for your money because the
12:31tools that fix inflation, raising
12:33interest rates, also crush growth. And
12:36the tools that stimulate growth,
12:38lowering rates, make inflation worse.
12:41There's no clean exit. The Fed is
12:43already stuck. They left rates unchanged
12:45at their most recent meeting because the
12:47war has made the path forward impossibly
12:49complicated. Cut and you pour fuel on
12:52accelerating inflation. Raise and you
12:55risk tipping an economy already buckling
12:57under energy costs into a full
12:59recession.
13:00If the conflict drags on and the Strait
13:02of Hormuz stays disrupted, some analysts
13:05project Brent crude could approach $130
13:09a barrel. At that level, we're past
13:12inconvenience. We're into structural
13:14damage to household budgets, consumer
13:16spending, and corporate earnings. The
13:191973 OPEC oil embargo is the comparison
13:22analysts keep reaching for. Every major
13:25oil price shock in the last half century
13:27has been followed by some form of
13:28recession.
13:29The 1973 embargo led to a 2-year
13:33economic contraction. The 1979 Iranian
13:36revolution doubled oil prices and
13:38triggered another recession. The 2008
13:41oil spike preceded the financial crisis.
13:43The pattern is so reliable that some
13:45economists consider oil shocks one of
13:47the few dependable triggers for
13:49stagflationary conditions.
13:51And the current disruption with oil
13:53production across Kuwait, Iraq, Saudi
13:56Arabia, and the UAE collectively
13:58dropping by at least 10 million barrels
14:00per day is being described as the
14:02largest supply disruption in the history
14:04of the global oil market. That's not a
14:06sentence that gets used lightly. And it
14:08should change how seriously you take
14:10what's happening regardless of what the
14:12number at your local gas station says.
14:15And even when this eventually resolves,
14:17relief won't be instant. Economists
14:19describe what's called the rockets and
14:21feathers effect. Prices shoot up like a
14:23rocket when costs rise but drift down
14:26like a feather when they fall.
14:28After Russia invaded Ukraine, gas spiked
14:31within days. It took months to come back
14:33down. After hurricanes wrecked Gulf
14:35Coast refining in 2005,
14:38same pattern. Spike was immediate.
14:40Recovery was glacial. So even in the
14:43best scenario where the strait reopens
14:45and oil flows resume, you're looking at
14:47weeks of ramp up for production
14:49facilities, months for prices to drift
14:52back to normal, and a long tail of
14:54elevated costs rippling through the
14:56supply chain. The strategic petroleum
14:58reserve release, 172 million barrels
15:01from the US alone, and the largest in
15:04IEA history, buys time. It doesn't fix
15:07the rupture. All right. Deep breath,
15:10people. Let's talk about what you can
15:12control because the difference between
15:14people who come out of economic shocks
15:16stronger and people who come out weaker
15:18has almost nothing to do with what
15:20happened. It has everything to do with
15:21what they did while it was happening.
15:23The most important thing right now is to
15:25not panic sell your investments. I know
15:27every instinct is telling you to move to
15:28cash, but research from multiple
15:31financial institutions consistently
15:32shows that this is the single most
15:34expensive mistake investors make during
15:36geopolitical crises. One certified
15:39financial planner put it this way, "Wars
15:41can last several years, but most
15:43people's investing time horizon is
15:44decades."
15:46Moving 100% to cash doesn't eliminate
15:49risk.
15:50It replaces market risk with inflation
15:52risk and opportunity cost. There is no
15:54risk-free option. Even being too
15:56conservative is a risk because you can
15:58outlive your money.
16:00Next, pressure test your emergency fund.
16:02Financial advisors typically recommend 6
16:05to 12 months of expenses in something
16:07accessible like a high-yield savings
16:09account.
16:10The top high-yield accounts are paying
16:12over 4% right now.
16:14If your cushion is thin, this is the
16:16moment to build it. Not because the
16:18worst case is guaranteed, but because
16:20the psychological security of knowing
16:22you can absorb a shock is the most
16:23underrated financial tool there is.
16:26When you know you have runway, you don't
16:28make panicked decisions. That calm is
16:31worth more than the interest. Think of
16:34your emergency fund less as a savings
16:35account and more as an insurance policy
16:38against your own fear response. The cost
16:41of not having it isn't just financial.
16:44It's psychological. It's the difference
16:46between watching the news and feeling
16:48concerned versus watching the news and
16:51feeling desperate.
16:53Desperate people make expensive
16:54mistakes. Then, audit your spending
16:57before the next waves arrive. Gas is
16:59already here, groceries are coming,
17:01airfare is coming, the interest rate
17:04repricing is coming.
17:05If you wait until all five waves have
17:07landed to adjust your budget, you'll be
17:09scrambling reactively instead of moving
17:11proactively. Cut the discretionary
17:13spending now before you have to and
17:15redirect those dollars toward financial
17:17cushion. If you're investing on a
17:19regular schedule, keep doing it.
17:21This feels counterintuitive, I know.
17:24Your gut says, "Stop throwing money into
17:26a falling market." But, this is backed
17:28by decades of evidence.
17:30When you invest a fixed amount every
17:31month, you automatically buy more shares
17:33when prices are low and fewer when
17:35prices are high. The volatility that
17:37feels terrifying right now is quietly
17:40lowering your average cost per share.
17:43This is what behavioral economists call
17:45dollar cost averaging, and it works
17:47precisely because of the chaos, not
17:50despite it.
17:51Years from now, the shares you bought
17:53during this conflict will likely be some
17:55of the best investments you ever made.
17:57The people who paused their
17:58contributions during past crises, they
18:01missed the discount and bought back in
18:03at higher prices.
18:05And finally, map your specific exposure
18:07to energy prices. This one is personal
18:10and looks different for everyone.
18:12If you're commuting long distances, the
18:14math on a more fuel-efficient vehicle
18:16just changed. If you're carrying
18:18high-interest credit card debt, attack
18:20it now.
18:21The Fed isn't cutting rates anytime
18:23soon, which means your borrowing costs
18:25stay elevated longer than anyone
18:27expected 6 months ago.
18:29Every dollar of revolving debt you carry
18:31through this period is more expensive
18:32than it was before the war started. And
18:34if you're a small business owner moving
18:36physical goods, your shipping costs just
18:39jumped. Now is the time to renegotiate
18:41contracts, consolidate shipments, or
18:44find closer suppliers before the diesel
18:46surcharge eats your margins.
18:49Here's something that separates the
18:50people who come through periods like
18:52this financially intact from the people
18:54who don't, and it's not what you'd
18:55expect. It's not about being smarter,
18:58it's not about having more money, it's
19:00about response time.
19:02Research on past economic shocks, the
19:041973 oil crisis, the 2008 financial
19:08collapse, the 2020 pandemic, the 2022
19:13inflation surge reveals a consistent
19:15pattern.
19:17The households that fared best weren't
19:19the ones with the highest incomes. They
19:21were the ones who adjusted earliest, who
19:23recognized the signals before the full
19:25impact arrived and made small,
19:27unglamorous moves, trimming
19:29discretionary spending, fortifying
19:31savings, maintaining investment
19:34contributions, reducing high-interest
19:36debt.
19:37None of those moves are dramatic.
19:40None of them make for exciting stories.
19:42Nobody posts on social media about the
19:44time they moved $200 a month from dining
19:47out into a high-yield savings account.
19:49But that's exactly the kind of invisible
19:51adjustment that creates real financial
19:54distance between people who were
19:55prepared and people who weren't.
19:58Compounded over the 6 to 12 months that
20:00an economic disruption typically takes
20:02to fully cycle through the system, those
20:05early adjustments create an enormous
20:07gap.
20:08Not because the individual moves are
20:10large, because they started before the
20:12pressure arrived. You're watching this
20:14video right now. You're thinking about
20:16your money, your budget, your portfolio,
20:18your exposure. Most people won't think
20:20about any of this until the fourth or
20:22fifth wave has already hit their bank
20:23account. By then, the window for
20:25proactive adjustment is closed. Your
20:27window is open right now. You're not
20:29irrational for feeling anxious about
20:31what's happening. That anxiety is the
20:33correct signal. It means you're paying
20:35attention. The mistake isn't feeling the
20:37fear.
20:38The mistake is letting the fear choose
20:40for you. Panic selling. Freezing.
20:44Pretending it'll blow over.
20:46Those are the responses your nervous
20:47system was built for, and they are
20:49exactly wrong for this moment. The right
20:52response is quieter. Review your budget,
20:54check your emergency fund, continue your
20:57regular investments, map your energy
20:59exposure, and then, once you've taken
21:01those steps, give yourself permission to
21:03stop doom scrolling the financial news.
21:06The headlines are designed to amplify
21:08fear, not inform action. You've already
21:11taken the action. You don't need the
21:13fear. You've navigated uncertainty
21:15before, you'll navigate this one, too.
21:18The only question is whether you'll let
21:20the disruption make your decisions for
21:22you, or whether you'll make them
21:23yourself.
21:24If this changed how you're thinking
21:26about the next few months, drop a
21:27comment and tell me what move you're
21:29making first. And if you haven't
21:31subscribed yet, now's the time. This
21:33story isn't over, and neither is your
21:35window to get ahead of it.