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Perpetual war spending traps US in stagflationary debt spiral

Tuesday, April 7, 2026 · from 4 podcasts, 5 episodes
The Peter McCormack ShowWhat Bitcoin DidBTC SessionsWhat Bitcoin DidTFTC: A Bitcoin Podcast
  • The US funds military escalation via debt monetization, directly linking inflation to war.
  • A closed Strait of Hormuz would trigger $200 oil and a Treasury market collapse.
  • The system's response will be massive money printing, forcing a pivot to Bitcoin and gold.

The US is funding a new Middle East war with printed money, creating a direct pipeline from the Treasury to inflation. Analysts across multiple podcasts argue the current conflict has no viable military solution, but it has a certain economic outcome: stagflation.

Lyn Alden and Luke Gromen explain the fiscal trap. Interest and entitlement spending already exceed 100% of tax receipts. A prolonged conflict that spikes oil prices would gut revenue further, forcing the Federal Reserve to monetize the debt. The Fed cannot print oil, but it can print dollars to cover a deficit approaching $3 trillion.

Mel Mattison, TFTC:

- When the dust settles, the only way out is going to be massive coordinated global central bank intervention.

- This is going to be the golden opportunity for gold and Bitcoin.

Energy is the master variable. Alden notes that closing the Strait of Hormuz would remove 20% of global energy supply, causing non-linear supply chain collapses far beyond gas prices. Gromen warns this could push oil to $200, forcing energy-importing nations like Japan to liquidate US Treasuries to survive, accelerating a market crash.

Scott Horton describes the self-perpetuating 'Iron Triangle' of arms manufacturers, Congress, and media that profits from perpetual conflict. The interest on the $40 trillion national debt now consumes a larger budget share than the military itself, transferring wealth from taxpayers to bondholders. The system uses war to destroy capital, keeping the population financially desperate and controllable.

The consensus is a binary endgame. As Jeff Booth argues, the old debt-based system cannot function alongside the abundance created by AI and technology. The state will attempt total control through money printing. The only exit ramps are hard assets. The Fed will become the sole financier of a wartime state, and Bitcoin provides the first global settlement alternative it cannot control.

WarFedMarkets

By the Numbers

  • $40 trillionUS national debtmetric
  • <$1,000Most people's savingsmetric
  • 2006-2007Iraq War II fever peakmetric
  • 2011US support for rebels beganmetric
  • Summer 2013ISIS state announcedmetric
  • 10%Egyptian currency devaluationmetric

Entities Mentioned

BitcoinProtocol
FBIConcept
Federal Reserveinstitution
HamasCompany
HezbollahCompany
Irancountry
ISISConcept
Israelcountry
Japancountry
Strait of Hormuzlocation

Source Intelligence

What each podcast actually said

The Peter McCormack Show
The Peter McCormack Show

Peter McCormack

#163 - Scott Horton - How Debt, Inflation and War Are All Connected • Apr 7

  • Scott Horton argues that perpetual war, as described in Orwell's 1984, serves to transfer public wealth into military assets, keeping the population desperate and easier to control.
  • Horton points out that the official US national debt is $40 trillion, with interest payments now a larger percentage of the annual national budget than military spending, according to Senator Rand Paul.
  • McCormack quotes macro analyst Mike Green, who claimed the current war consumed all excess capital, noting that most people had less than $1,000 in savings.
  • Horton asserts that US foreign policy, including decisions like the Iraq War, is heavily influenced by Zionism and the Israel lobby, with figures like David Wurmser and Paul Wolfowitz pushing Israeli interests while assuring W. Bush of American strategic benefits.
  • Horton highlights political ignorance among US officials, citing instances from 2006-2007 where the head of FBI counterterrorism and the House Intelligence Committee chair could not differentiate between Al-Qaeda and Hezbollah.
  • Horton clarifies that Iran's support for Hamas and Hezbollah does not equate to backing Al-Qaeda, as Hamas has historically murdered Al-Qaeda members in Gaza and Al-Qaeda was responsible for 9/11.
  • Horton explains that the US, under W. Bush and Obama, supported Al-Qaeda-linked groups in Syria, including the rebranded ISIS (Islamic State of Iraq and Syria) by 2013, to counter Iranian influence after the Iraq War inadvertently empowered Shiites.
  • Horton describes the 'iron triangle' - arms manufacturers, Congress, and the media - as driving war by hyping conflicts and producing studies justifying military spending, with many think tanks financed by defense firms.
  • Horton claims that the Ukraine war serves as a 'garage sale' for old military hardware, which then necessitates new inventory replenishment for arms manufacturers.
  • Horton states that media companies financially benefit from violent conflict, as controversy boosts viewership and ad rates, creating an incentive for them to promote and ensure ongoing conflicts.
  • Horton discusses how political figures often misunderstand or misrepresent events, such as Mike Huckabee believing Iraq was behind 9/11 or false claims blaming Iran for the USS Cole attack (which was Al-Qaeda).
  • Horton criticizes the common tactic of dismissing criticism of Israel as 'anti-Semitic,' explaining that many people are genuinely inculcated to believe this, making reasoned discussion difficult.
  • Horton expresses hope in the growing anti-war movement, noting that many new voices and organizations are effectively challenging established narratives, making his own contributions feel 'superfluous.'
  • Horton warns that the US military empire's 'bluff has been called' in the Middle East, with bases and economic targets being hit without effective counter-response, leading to an 'escalation trap' where increased force yields diminishing results.
  • Horton references Gareth Porter's 'The Perils of Dominance,' which argues that US overconfidence in its military might in the 1960s led to disastrous interventions like Vietnam, a pattern he sees recurring today.
  • Horton notes that presidents, including Donald Trump, redefine 'war' as 'conflict' to avoid congressional authorization, a precedent set by Obama's actions in Libya.

Also from this episode:

Inflation (1)
  • Horton contends that the rising cost of living due to monetary and price inflation disproportionately affects lower-wage earners, as their wages are the last to adjust, while the CPI downplays real cost increases.
MacroInflationWarBanking
What Bitcoin Did
What Bitcoin Did

Peter McCormack

Jeff Booth: Everything They Told You About Money Is Wrong • Apr 7

  • Booth forecasts a chaotic period of supply chain shortages and rampant inflation, followed by massive monetary printing to prevent a deflationary collapse that would destroy the current money system.
  • He differentiates between viewing Bitcoin as a static asset for digital credit and as an emergent monetary protocol, arguing the latter is necessary for it to succeed as a free market tool.
  • He argues that in a true Bitcoin standard, credit would diminish as a percentage of the economy, replaced by equity investment, as lending 'out of thin air' would fail.

Also from this episode:

Adoption (5)
  • Jeff Booth argues every individual constructs a personal reality that reinforces their own belief system, making an objective measure like Bitcoin essential for grounding.
  • Booth posits the natural state of a free market is deflation, driven by entrepreneurs competing to create more value for consumers.
  • Booth contends that digital credit built on top of Bitcoin centralizes control and is binary: it will either be wiped out by the deflationary free market or destroy Bitcoin's potential.
  • He states that agency in the modern system is lost by using fiat money, which can be printed unilaterally, and is regained by participating in the Bitcoin ecosystem.
  • Booth observes a high concentration of INTJ/ENTJ personality types among Bitcoiners, attributing it to their ability to grasp and build upon its abstract, emergent protocol nature.
AI & Tech (2)
  • He asserts exponential technology growth, specifically in AI, should lead to exponential deflation and abundance, a trend incompatible with inflationary debt-based money systems.
  • Booth uses the analogy of folding a piece of paper 50 times to reach the sun to illustrate humanity's inability to intuitively grasp exponential growth, a core tenet of his technological deflation thesis.
MacroBTC MarketsAdoptionAI Infrastructure

The Debt Crisis Is Already Here | Lyn Alden • Apr 1

  • Lyn Alden argues the long-term sovereign debt cycle has been mattering since 2018 or 2019, shifting the US into a fiscally dominant environment.
  • Alden says the 2019 repo crisis was tied to excessive Treasury debt issuance, forcing the Fed to increase its balance sheet despite no recession.
  • Lyn Alden states US banks have $1.9 trillion in loans outstanding to non-deposit financial institutions like shadow banks and private credit funds.
  • That $1.9 trillion in shadow bank exposure represents about 7-8% of total US bank assets, which Alden argues is not large enough to tank the banking system on its own.
  • Alden views a closure of the Strait of Hormuz as a DEFCON 5 catastrophe, as 15-20% of global energy production flows through it.
  • She links sovereign debt crises to increased geopolitical volatility, as indebted hegemons like the US tend to lash out to externalize problems.
  • Lyn Alden says countries that print their own currency, like the US, almost never nominally default; they debase their way out of debt through inflation.
  • She argues the current era of fiscal dominance means recessions will feel different, becoming less disinflationary or even inflationary due to pre-stimulus.

Also from this episode:

Banking (1)
  • US deficit spending became larger than total private bank lending in a non-recession year for the first time around 2018-2019.
Energy (4)
  • She argues energy and fertilizer shortages from a strait closure would hit developing countries hardest, as wealthy nations can outbid them for remaining supplies.
  • Alden states Egypt is already implementing energy rationing measures like early cafe closures due to a tripled monthly natural gas import bill.
  • Luke Groman's benchmark is that oil above $130 per barrel is catastrophic for the global economy, but Alden says it could go far north of that if the strait stays closed.
  • Alden argues high energy prices act as a raw input cost shock that squeezes business margins and household budgets, potentially triggering social unrest.
Immigration (1)
  • Alden connects immigration policy debates in developed nations to debt and demographic issues, as governments try to fix top-heavy entitlement systems.
Society (1)
  • She states the US social security system has dropped from over 10 workers per retiree at inception to roughly three workers per retiree now.
AI & Tech (4)
  • Alden identifies AI as the primary potential source of productivity growth to offset money printing, focusing on automating white-collar services.
  • The speed of AI job displacement is critical; if slow over generations, it's manageable, but rapid displacement over a decade could be devastating.
  • Alden believes AI will likely exacerbate the two-speed economy, benefiting adopters and asset owners while leaving others behind, increasing wealth inequality.
  • She sees a high likelihood of Universal Basic Income proposals gaining traction if AI displacement accelerates, to stem potential social unrest.
MacroBankingEnergyFed
BTC Sessions
BTC Sessions

The Real War Isn’t in Iran — It’s in the US Treasury Market | Luke Gromen & Lyn Alden • Apr 7

  • Luke Gromen argues the US Treasury market, not the military, is Iran's primary target. He states a prolonged Strait of Hormuz closure risks systemic collapse by disrupting the global energy and financial system.
  • Gromen and Lyn Alden agree a swift resolution to the Strait crisis is unlikely. They state even a best-case reopening would cause supply chain disruptions and inflation for three to five months.
  • Alden cites Egypt as a leading indicator of crisis impacts, where a tripled natural gas bill forced 9 PM curfews on businesses, devalued the currency by roughly 10%, and curtailed economic activity.
  • Gromen states military action risks starvation for hundreds of millions by Christmas. He and Alden warn the crisis will cause severe food shortfalls in the global south, as fertilizer prices rise and wealthier nations outbid others.
  • Gromen argues the US faces a fiscal death spiral. With interest and entitlements consuming over 100% of receipts, a recession-induced drop in tax revenue will force a choice between default and monetizing debt.
  • Gromen points to a record $15 billion Treasury buyback and Fed reserve management as evidence of soft yield curve control, aimed at preventing the 10-year yield from breaking above 4.4%.
  • Alden outlines the monetization sequence: breaking funding markets lead to Fed liquidity facilities, then balance sheet expansion, and finally Treasury buybacks. She notes the Fed will act to prevent a failed Treasury auction.
  • Gromen highlights Japan's emerging market behavior, where rising JGB yields relative to Treasuries weaken the yen instead of strengthening it. He monitors the dollar-yen times oil metric as pressure on US yields.
  • Alden explains the global piggy bank mechanism. Energy-importing nations like Japan must sell dollar assets, primarily Treasuries, to pay for oil when the dollar and oil price both rise, transmitting stress to US markets.
  • Gromen's base case for the conflict is administrative hubris, comparing it to kicking a beehive. He cites a credible source suggesting a US strategy to let Iran and Israel mutually degrade, as both threaten dollar hegemony.
  • Alden sides with Occam's razor, stating the administration underestimated Iran after the Venezuela operation. She criticizes a lack of strategic thinking, citing failed Dogecoin policies and tariff overreach.
  • Alden argues the dollar system has entrenched longevity due to tens of trillions in dollar-denominated debt. She sees a gradual shift to a multi-polar reserve system, accelerated but not caused by this crisis.
  • Gromen sees gold as the escape hatch from dollar debt. A revaluation of global gold collateral via an oil-linked price surge could allow the world to redenominate claims without a catastrophic financial crisis.
  • Both analysts are cautious on Bitcoin in the near term, correlating it with software stocks. They expect risk asset declines if the crisis prolongs, but see sharp sell-offs from liquidity events as buying opportunities.

Also from this episode:

Energy (1)
  • Gromen warns of nonlinear supply chain breaks from the energy shock. He argues gross self-sufficiency metrics are misleading, as missing minor components from affected regions can halt entire production lines globally.
Macro (2)
  • Alden explains manufacturing's network effect, using a consumer products company example. They found US manufacturers could not replicate Chinese-made parts at any reasonable cost, requiring product simplification.
  • Gromen defines a US 'Suez moment' as the best-case outcome: walking away, allowing a yuan-for-gold-for-oil system, leading to dollar devaluation, high inflation, yield curve control, and capital controls in the US.
Inflation (1)
  • Alden distinguishes between temporary price inflation from supply shocks and permanent inflation from monetary stimulus. She notes initial demand destruction in discretionary spending can precede a debt-driven monetary response.
MacroFedEnergyBanking
TFTC: A Bitcoin Podcast
TFTC: A Bitcoin Podcast

Marty Bent

#732: The Iran War Escalation with Mel Mattison • Apr 1

  • Mattison states the U.S. invasion of Iran lacks a viable military solution, despite American power, similar to how willpower fails against addiction.
  • Mattison says he started buying puts and raising cash after realizing the Iran war was serious, about five to six days after the initial attacks.
  • According to Mattison, the market initially dismissed the Iran conflict, with the S&P trading at 6,800-6,850 days after it began.
  • Mattison argues Iran gains leverage daily and could demand the U.S. leave the Gulf, abandon bases, price oil in yuan, or tax the Strait of Hormuz.
  • Mattison contends Trump's talk of bombing Iranian energy and desalination plants is reckless and ignores Iran's ability to retaliate against Gulf states.
  • Mattison believes the conflict has a tail risk of escalating to a nuclear exchange between Israel and Iran.
  • Mattison suggests Iran may have already weaponized its 60% enriched uranium into a nuclear device since June.
  • Mattison posits a Mossad operation may have manipulated Trump with false intelligence from Netanyahu to launch the war.
  • Mattison states oil is the key driver of inflation, impacting transportation, plastics, fertilizers, and goods movement.
  • Mattison warns a protracted Iran war with oil at $90-$150 could lead to 6-7% inflation and 1970s-style stagflation.
  • Mattison's base case remains a year-end market recovery, but only if hard decisions to de-escalate are made within weeks.
  • Mattison forecasts the ultimate solution to war-induced economic damage will be massive, coordinated global central bank liquidity injection.
  • Mattison is holding cash and puts, waiting for a market capitulation event like a 3-4% down day in the S&P before deploying.
  • Mattison added gold strategically when it touched its 200-day moving average near $4,100, expecting a major rally post-crisis.
  • Mattison warns the Fed cannot Volcker-style hike rates into war-induced inflation without collapsing tax receipts and the sovereign bond market.
  • Mattison predicts the U.S. may need WWII-style tools like explicit yield curve control to manage blowout deficits and lack of foreign treasury buyers.
  • Mattison suggests private credit losses could infect banks and require a Fed bailout facility, leading to straight money printing.
  • Bent speculates the Iran war might be a U.S. proxy move to choke China's oil and gas access, slowing its AI race progress.
  • Mattison believes the AI industry's pressure, as voiced by David Sacks, could force a U.S. exit from the war to avoid disrupting the chip build-out.

Also from this episode:

Politics (2)
  • Mattison cites George Washington's farewell address, arguing an 'excess of fondness' for Israel makes the U.S. 'to some degree a slave.'
  • Mattison claims powerful U.S. officials, including Jared Kushner, may prioritize Israeli over American national interests.
BTC Markets (1)
  • Mattison argues Bitcoin must decouple from its tight software correlation with stocks and act as a store-of-value liquidity asset.
WarMacroFedBTC MarketsMarkets

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