Source: Miles Franklin | Date: March 08, 2026

Investment Research Summary: Miles Franklin Video Analysis

Video Title: Are We Already in a Wartime Economy? What It Means for Inflation, Gold & Dollar

Investment Thesis

The U.S. has entered a wartime economy due to Operation Epic Fury against Iran, which will inevitably drive inflation higher through increased defense spending, supply chain disruptions (especially Strait of Hormuz closure affecting 20% of global oil), and deficit expansion—creating a "deficit-debt-inflation doom loop" that will degrade purchasing power and extend dollar dominance in the short term while accelerating long-term currency debasement.

Sentiment

BULLISH (on commodities: gold, silver, oil; bearish on bonds and consumer discretionary)

Time Horizon

LONG-TERM (1+ years for commodity thesis, though near-term consolidation expected)

Key Takeaways

War is always inflationary with no exceptions - defense spending surge, supply chain disruptions, and debt monetization will drive prices higher regardless of Fed policy
Strait of Hormuz closure is the critical wildcard - 20% of global oil and significant LNG flow through this chokepoint; insurance market collapse forcing rerouting; U.S. offering government-backed insurance and naval escorts
Petrodollar reassertion strategy - cutting off China's cheap oil access (Venezuela + Iran) while positioning U.S. as alternative supplier to force dollar settlements and extend reserve currency status
Fed becomes "impotent" in wartime economy - external forces (oil, geopolitical risk) overwhelm monetary policy tools; government will choose to "let inflation run" rather than issue debt at 5%+
Wars last far longer than initial estimates - historical pattern shows conflicts extend well beyond "home by Christmas" promises; Iran's theocratic/apocalyptic ideology suggests prolonged insurgency risk even after military degradation

Market Views

Oil:

Currently elevated due to Strait closure; could persist if conflict extends beyond 4-5 weeks
U.S. energy independence provides cushion (net exporter status vs. 1970s vulnerability)
Russia benefits fiscally at $85/barrel (eliminates deficits, funds Ukraine war)

Gold:

Long-term target: $10,000 (no specific timeline given, but implied multi-year horizon)
Near-term: expects sideways consolidation after rapid run-up as market "bought the rumor, holding on news"
Breakout occurs when inflation pressure gets priced into dollar debasement

Silver:

Structural supply deficit continues; essential for modern warfare (500 oz per Tomahawk missile)
U.S. fired ~10% of Tomahawk stockpile in first 5 days; replenishment rate only 200/year vs. thousands needed
Near-term consolidation expected despite bullish fundamentals
Spot/physical premium disconnect has normalized (Shanghai arbitrage no longer viable)

Dollar:

Strengthening near-term due to: safe haven flows, liquidity demand, petrodollar reassertion, military dominance demonstration
Long-term challenges persist but timeline extended by conflict success
"Dollar milkshake theory" in effect during crisis

Bonds:

"Not a great long-term option" in inflationary wartime environment
Treasury yields surprisingly muted (haven't dropped as typical in crisis nor spiked dramatically)
Bond markets "supposed to be more sober" - current complacency may be mispricing risk

Assets Discussed

Commodities (BULLISH):

Gold - long-term safe haven as dollar purchasing power erodes; $10,000 target
Silver - wartime consumption (vaporized in missiles), structural deficit, irreplaceable in many applications
Oil - supply disruption, U.S. net exporter advantage, geopolitical premium

Defense & Defense Tech (BULLISH):

Palantir (PLTR) - mentioned as "new kids on the block" providing essential defense tech resources
Maritime/naval plays - currently "neglected stepchild relative to space"; ship building, autonomous undersea drones (mostly private/early-stage, limited public opportunities)
Space sector - acknowledged as "overheated" but critical (Space Force role in conflict)
Traditional defense contractors - beneficiaries of multi-year replenishment cycle

Sector Views:

Consumer discretionary (BEARISH) - resource reallocation toward strategic interests, potential rationing
U.S. Treasuries (BEARISH) - inflationary environment unfavorable for bonds
Bitcoin (BULLISH) - briefly mentioned as portfolio holding (but not elaborated)

Geographic/Strategic:

China impact - 35-50% of seaborne oil from Middle East via Strait; 20% of imported oil from Venezuela/Iran/Russia now curtailed
Russia - fiscally strengthened by higher oil prices but geopolitically weakened by U.S. resolve demonstration

Risk Factors

Conflict duration uncertainty - if war extends beyond 4-5 weeks, markets will reprice risk significantly; historical precedent shows wars last far longer than initial estimates (Iraq 8 years, Afghanistan 20 years)
Iranian insurgency/terrorist capacity - despite military degradation, theocratic/apocalyptic ideology and "death to America/Israel" stance suggests prolonged asymmetric warfare capability even without conventional forces
China provocation risk - severe energy supply disruption could force China into desperate actions; though Wilkerson believes "China doesn't want war with U.S.," cutting off 35-50% of oil imports creates unpredictable pressure
Deficit-debt spiral acceleration - extended conflict triggers "doom loop" of bigger deficits → more debt → monetary expansion → inflation → dollar debasement happening faster than expected
Market complacency - muted equity/bond reaction suggests investors haven't priced in prolonged war scenario; "nervous" about telegraphed actions already being priced in, leaving risk of sharp repricing

Notable Quotes

"War is always inflationary. There are no exceptions to this rule."
"The government will choose to let inflation run... if you're faced with the choice of we have to find buyers for this debt and we don't want to monetize it all ourselves... we have to get the cost of issuing paper down."
"In this kind of environment when these external forces are driving it so hard, the Fed becomes—I hate to say it—but to some degree impotent in terms of its ability to actually make a difference."
"One of the things I see is that the market had time to anticipate the moves... what President Trump and the administration was doing was essentially telegraphed to the market and telegraphed to Iran leadership for a long time."

Bottom Line: Wartime economy thesis supports long-term commodity positioning (gold, silver, oil) and defense sector exposure while avoiding bonds and rate-sensitive consumer plays. Near-term consolidation in precious metals expected before next leg up. Key variable is conflict duration—extension beyond several weeks triggers significant market repricing and accelerates inflationary pressures.

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