Last week, on the sidelines of the U.N. General Assembly in New York, Iran's Foreign Minister Abbas Araghchi put a seven-day plan on the table. Iran would reopen the Strait of Hormuz within a week and restart nuclear talks — and in exchange, Washington would lift its naval blockade, waive sanctions on Iranian oil sales, release frozen Iranian assets, and sign on to a regional ceasefire that includes Lebanon.

On Saturday, President Trump said no.

"They want to make a deal where they open the strait immediately because they are losing so badly," he said — and he told Axios the terms looked like "what we would have maybe agreed to a year ago."

In other words, the price went up.

Most people will read that as a negotiating posture and move on. After all, Trump also said he expects talks to resume this week, Iranian technical experts have already joined the discussions, and Tehran's own president has said Iran wants a deal before the U.S. midterms on November 3. So the headlines tell you a deal is close. But Trump has also refused to rule out new strikes before those same midterms — and the oil market is not waiting around to find out who blinks first.

Here's what the market did this morning. Brent crude jumped to $106.67, up 2.25% on the day. West Texas Intermediate rose $1.92 to $94.33 — up nearly 10% in a month and almost 49% in a year. Saudi-led forces were busy intercepting Houthi drones aimed at Riyadh over the same stretch. And at the pump, diesel now averages $6.48 a gallon nationally.

Keep in mind where we were just three months ago. On July 1, Brent traded at $71.57, and the consensus said the war premium was gone for good. Three weeks later it was back near $97. They were wrong then, and the people calling for $70 oil by Christmas are wrong now.

So why does this matter to you?

Because the strait is still, for practical purposes, shut. The U.S. military has escorted somewhere between 29 million and 40 million barrels of crude through Hormuz so far — and that sounds like a big number until you realize it's at most about two days of what the strait carried before the war. Think about that. All those armed escorts, and we have moved roughly 48 hours of normal traffic.

That's why a rejected proposal on a Saturday moves the price of diesel in Ohio on a Monday. Every trucker, every airline, every farmer running a combine through harvest season is paying for it — and those costs don't stay at the pump. They show up in groceries, in freight rates, and in the inflation reports the Federal Reserve reads before it decides what to do with your mortgage rate and your bond portfolio (more on that in In Focus below).

If you own energy producers, hold them.

If you've been waiting for oil to "normalize" before buying, understand that you're waiting on a diplomatic breakthrough that one side just called unacceptable. The midterm calendar gives both Washington and Tehran a reason to stall, and stalling keeps crude elevated.

And the man who controls the outcome has told you, in plain English, that he thinks he's winning. A president who believes his opponent is "losing so badly" doesn't rush to the table. He waits.

Plan accordingly.

So while Musk tweets and Congress holds hearings, what are you supposed to do? Wait?

I don't think so.

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Washington spent last week celebrating an extension of the rare earth truce with Beijing. Look at the length before you celebrate with them.

The suspension of China's toughest rare earth export controls was due to expire on November 10. Treasury Secretary Scott Bessent announced it would now run through January 10, 2027 — a two-month reprieve, when most observers had expected six months or longer. In other words, Beijing gave the White House just enough to call the Xi state visit a success, and not one day more.

And keep in mind what was never on the table. The licensing regime China imposed in April 2025 on seven medium and heavy rare earths — samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — was never suspended at all. Those are the metals that go into fighter-jet motors, missile guidance, and the magnets that make precision weapons work.

Here's how tight that squeeze has been. Before the restrictions, the U.S. imported 333 tons of Chinese yttrium. Over the eight months of restrictions that followed, that fell to 17 tons. Think about that — a 95% collapse in a metal the defense industry can't build without.

China's commerce ministry made its position plain in the fine print: "dual-use exports will remain subject to legal and national security reviews." Translation — Beijing keeps the tap, and it decides when to turn it.

Most investors believe Washington has already solved this problem with money. The Pentagon took a 15% stake in MP Materials with $400 million in preferred shares and set a $110-per-kilogram price floor for neodymium-praseodymium. USA Rare Earth landed up to $277 million in direct funding plus a $1.3 billion loan. That's real capital — and it's the right idea.

But capital isn't capacity. Mountain Pass, America's flagship mine, produced 8,900 tons in 2025 — about one-third of what the country consumes. Back in 2010, the Government Accountability Office estimated it could take 15 years to rebuild a full domestic supply chain. We started late, and the clock on this truce runs out in about 15 weeks.

If you own the domestic rare earth producers, the government has effectively put a floor under your downside. That's the rarest thing in commodity investing — and it's worth holding through every headline between now and January 10.

Here's a fact that should end every argument about whether America can afford a long war: this country now pays more in interest on its debt than it spends on its entire military.

The Congressional Budget Office estimates the federal government ran a $2.0 trillion deficit in the first 11 months of fiscal 2026 — $168 billion in August alone. Gross national debt has crossed $40 trillion. Debt held by the public now exceeds the size of the whole economy. And the Social Security and Medicare trust funds face insolvency within a decade.

Maya MacGuineas of the Committee for a Responsible Federal Budget put it bluntly: "Such extraordinarily high deficits are just one piece of our fiscal situation that is falling apart."

Now layer the Gulf on top of it. Every carrier group escorting tankers through Hormuz, every interceptor fired at an Iranian drone, every barrel released from a strategic reserve — all of it is being paid for with borrowed money. And that money is being borrowed at the highest long-term rates in two decades, because the bond market has noticed the same thing you just read.

Let me put this in plain English. When a household spends more on credit-card interest than on its mortgage, you don't call that a budget. You call it a warning. The United States crossed that line with the Pentagon — the one line item Washington has always protected.

Most people think the danger is a default. It isn't. The United States borrows in the currency it prints, so it will always pay. The danger is how it pays — with dollars that buy less every year. That's the quiet tax that falls on anyone holding cash, long-dated bonds, or a fixed pension.

In short, these debts will never be repaid in dollars worth what they were when they were borrowed.

If you hold a large share of your savings in long-term Treasurys, I urge you to shorten them. You're lending money for 30 years to a borrower who spends more on interest than on defense and is financing a war on credit. As Buffett says, "Only when the tide goes out do you discover who's been swimming naked." The tide is going out.

During the Cold War, Washington and Moscow installed a hotline so a misread radar screen wouldn't end the world. On Saturday, Washington and Beijing agreed to build the 21st-century version — for artificial intelligence.

Coming out of the Trump–Xi summit, the two countries set up what they're calling the U.S.-China Super Intelligence Dialogue — "SI," in Trump's preferred terminology — along with a bilateral channel for "SI incidents." Bessent pushed for the channel in the pre-summit talks. The first formal dialogue meeting is due by November.

Here's what matters, and what nobody can tell you yet: what counts as an "incident." Neither side has said what kind of event would trigger a call, or what either government would be obligated to disclose. Xi said AI "must develop under human control." Trump has brushed off the existential worries. So both leaders agreed to a phone line without agreeing on why they'd ever pick it up.

And one more thing... the military crisis pact both sides were supposed to sign got pushed back. Two nuclear powers agreed to talk about machines before they agreed on how to keep their navies from colliding.

Now look at the trade side of the same summit. The two countries released lists covering $30 billion in goods each way for tariff cuts — 77 Chinese products including microwave ovens, fish hooks and artificial flowers, and more than 1,600 American products including poultry, dairy, peanuts and canned tomatoes. U.S. Trade Representative Jamieson Greer says the deal improves market access for about 30% of U.S. exports to China. China also committed to buy at least 10 million metric tons of U.S. coal in 2027 and 2028.

Notice what's missing from both lists — semiconductors, AI hardware, anything that matters in the compute race. Trade expert Deborah Elms said the listed goods "may reduce some prices," but "none is going to make a dramatic difference in inflation figures."

In other words, Washington and Beijing cut tariffs on the things neither side is fighting over, and opened a hotline for the thing they're fighting over most. Two-way trade already fell 25% to $495 billion last year. The decoupling in technology isn't slowing down — it's being managed.

If you own AI and semiconductor companies, price them for a world split in two. This summit confirmed that's the world we're living in.

On September 16, the Federal Reserve voted 12-0 to raise rates, and Chairman Kevin Warsh told the country exactly what his Fed believes. "Inflation is too high and has been for too long," he said. The Fed raised rates a quarter point, to a range of 3.75% to 4.00%. Sixteen of the 19 Fed officials now expect at least one more hike before the year is out — and the Fed's own projections don't show inflation back at 2% until 2029.

The bond market heard him. On Thursday, the 30-year Treasury yield hit 5.46% — the highest since 2004.

And gold? Gold is getting crushed. December gold futures fell to $4,188.90 this morning — down 3.1% in a week and 8.2% in a month. Silver fell more than 4% today to $61.54, its lowest since August 7.

Most investors are reading this as a verdict — the Fed is back, it's serious, and the metal that hedges against a reckless Fed isn't needed anymore.

They're wrong. Here's why, in three steps.

First, look at what the Fed is actually fighting. This inflation didn't come from easy money. It came from a closed strait, $6-a-gallon diesel, and a war. Raising the price of money doesn't produce a single extra barrel of oil. The Fed can make borrowing more painful, but it can't make tankers move.

Second, every hike makes the fiscal hole deeper. You read above that Washington already pays more in interest than it spends on defense. Every quarter point the Fed adds lands directly on that interest bill — which means bigger deficits, more borrowing, and more Treasury supply hitting a market that's already choking on it. Dropping rate hikes into a government this indebted is like dropping Mentos into a can of Diet Coke. The Fed is fighting inflation with a tool that feeds the underlying disease.

Third, the gold price today reflects a bet that the Fed wins. But look at the long view — gold is still up 13.1% from a year ago, even after this selloff. The market is selling insurance at the precise moment the house has the most kindling in it — record debt, a live war, and a central bank that admits it won't hit its target for three more years.

As Buffett says, be "greedy when others are fearful." Right now, others are fearful of owning gold, because they believe rising rates make it obsolete. Let me put this in plain English: rising rates on a $40 trillion debt make gold more necessary, not less.

So here's what to do.

First, if you don't own gold, I urge you to use this selloff to start a position. Second, if you already own it, don't sell into an 8% decline driven by a central bank that's fighting the wrong fire. Third, if you're a paid-up subscriber holding silver, understand that it moves twice as hard in both directions — size your position so a 4% day doesn't force your hand.

I've given you the answer. Horse, meet water.

The Fed's preferred inflation gauge lands September 30, and the September jobs report follows October 2. If you want to know whether the Fed hikes again, these two releases are the whole game — a hot PCE print on top of $100-plus Brent makes another hike close to certain.

CME Group futures now put the odds of another rate increase in October above 70%. If you hold long-dated bonds going into that meeting, you're betting the Fed blinks. This Fed hasn't blinked once.

Copper closed Friday at $6.6955 a pound, dragged lower by rate fears — yet the Yangshan import premium in China is near a four-year high heading into the October 1 holiday. If you own copper miners, watch what Chinese buyers do when they come back from the break. Physical demand is telling you something the futures market is ignoring.

Tehran wants a deal before Americans vote, and Trump hasn't ruled out strikes before they do. If you own energy, this is the five-week window where the risk is highest in both directions — keep your position sized to survive a headline either way.

That's the new expiry date on the rare earth truce. Trump and Xi meet again at APEC in Shenzhen in November and at the G20 in Miami in December. If there's no longer extension by the Miami meeting, expect Beijing to start using the calendar as leverage.