Dear Reader,

Before I get into today’s issue…

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In my last letter, I told you that the real hidden risk in a war shock is not just oil – it’s liquidity.

Because if this thing drags on…

If energy prices stay high…

If cross-border cash flows get squeezed…

Then the risk of a liquidity crunch goes up fast.

But even if we avoid a true liquidity crisis…

That does not mean the danger goes away.

Because here is another thing investors miss during oil shocks.

And in some ways, it’s even more dangerous because it’s easier to ignore.

The first shock hits the headlines.

The second shock hits the economy.

And by the time that second shock becomes obvious…

The market may already be caught flat-footed.

That’s because:

Oil Shocks Take Far Longer Than Most Think to Spread Through the Economy

Sure, the prices you’re paying at the pump go up quickly.

But that’s just Stage 1 – The Headline Shock.

That’s the part everyone is seeing right now.

Oil spikes, gas prices shoot up.

The media starts shouting about gas prices, inflation, and supply disruptions.

It’s loud and emotional.

And because it’s so visible, many people assume it’s the whole story.

It isn’t.

Because oil is not just something you burn in your car.

It sits underneath transportation, logistics, aviation, manufacturing, chemicals, agriculture, mining, construction.

In other words, huge parts of the real economy.

Which brings us to Stage 2 – The Cost Shock.

Once oil stays high for long enough…

The shock starts moving outward.

A trucking company pays more for diesel.

An airline pays more for jet fuel.

A manufacturer pays more for transport, plastics, packaging, and petroleum-based inputs.

A farmer pays more to run equipment, move crops, and buy fertilizer.

A retailer pays more to get inventory where it needs to go.

None of that necessarily looks catastrophic in isolation.

But that’s exactly why oil shocks are so deceptive.

They don’t usually break the economy in a single dramatic moment.

They squeeze it – slowly and relentlessly.

Which takes us to Stage 3 – The Economic Squeeze.

At this stage, the economy starts feeling the higher costs.

Households spend more on necessities and have less left over for everything else.

Businesses try to pass costs through.

Some can. Some can’t.

The ones that can’t take the hit in margins.

The ones that can pass it on to consumers.

Either way, the pressure builds.

Maybe hiring plans get delayed.

Maybe capex gets pushed back.

Maybe inventory decisions get more cautious.

Consumers become less forgiving…

And growth starts to soften.

This is where a lot of investors get caught off guard.

Because the original shock may already feel “old” by then.

The war may no longer dominate the headlines – or it may even be long over.

Oil may have come back down to pre-war prices.

But beneath the surface, the damage from that initial oil spike is still spreading through the economy.

Which brings us to Stage 4 – The Policy Trap.

Now the oil shock starts creating a second problem.

If higher energy prices push inflation expectations back up…

Then the Fed may have less room to respond to weaker growth.

That’s what makes these shocks so dangerous in a late-cycle, debt-heavy economy.

Normally, if growth weakens, markets start hoping for relief.

Rate cuts…easier financial conditions…a policy cushion.

But if oil has made inflation sticky again…

That cushion may not come as quickly as people expect.

So now you have an already-strained system taking a hit from both sides.

Growth is weakening…

But the path to relief is getting narrower.

This is Why Brief Oil Shocks Can Trigger Much Bigger Economic Damage

It’s why Moody’s Chief Economist has already warned that a recession would be “hard to avoid” if oil prices stay high for even a few weeks.

And why oil shocks have a long history of triggering severe economic downturns.

In the 1970s and early 1980s, energy shocks were central to the pain.

In 1990, the Gulf War spike hit an economy that was already weakening.

In 2001, the Dot-Com bust was already doing damage, but higher energy costs hardly helped.

In 2008, housing and credit were the main fault lines, but the oil spike squeezed households and deepened the stress in a system that was already unstable.

Oil spikes may not always be the central cause…

But they’re an accelerant.

And that’s exactly why I think so many investors are still looking at this the wrong way.

They’re watching the first move.

The headlines. The spike in crude.

But what they’re not watching closely enough…

Is what that shock may already be setting in motion underneath the surface.

And while it is too early to tell for certain what comes next…

This is a risk we need to look out for.

Remember if you are interested in protecting your portfolio from risks like this…

While setting yourself up for big returns…

Don’t forget to register for my Black Swan Trade event happening tonight at 7:00 PM ET.

I’ll be showing a unique strategy for protecting yourself – and potentially even profiting big – when markets get blindsided by the second-order effects most people never see coming.

I’ll cover:

• Why I believe the rest of 2026 will be full of Black Swan events (and how I'm preparing for one right now).
• How you can use this strategy to protect your portfolio against market crashes and geopolitical shocks (I'll even show you how I took home a rare and exceptional 1,793% return in just 11 days using this strategy).
• The difference between a Black Swan and a Grey Swan (and how you can potentially take home BIG profits on either one).
• Details on THREE potential Grey Swans I see brewing in the markets right now.

This event is completely free to attend, but you do need to register.

Plus, you’ll even stand a chance to win a signed copy of the book The Black Swan by Nassim Taleb just for showing up.

So if you haven’t signed up for this event yet…

You can click here to do that now…​

And I look forward to seeing you tonight at 7:00 PM ET.