Summary
Phil Anderson draws a parallel between the current Middle East conflict (U.S./Israel strikes on Iran, death of Supreme Leader Khamenei) and the Iraq War escalation in the prior real estate cycle, arguing that geopolitical tension in the second half of the cycle is historically normal — and especially pronounced this cycle given the coinciding K-Wave peak. He warns that surging oil and commodity prices risk triggering a new inflation wave that could force the Fed into a hawkish turn, tightening financial conditions and potentially bringing forward the peak in real estate and the stock market.
Key Claims
- Middle East conflict in the second half of the real estate cycle is historically consistent with prior cycles — confidence: high
- This cycle’s geopolitical risk is amplified because it coincides with the K-Wave (Kondratieff Wave) peak — confidence: high
- Financial conditions (Chicago Fed measure) have remained looser than average entering 2026, unlike the pre-peak tightening seen in 1990 and 2008 — confidence: high
- The Strait of Hormuz carries ~20% of global petro-liquids and ~20% of global LNG shipments; disruption is materially impacting energy markets — confidence: high
- The iShares GSG commodity ETF has broken above a Mexican Pete pattern at $24 and is now surpassing the mid-2022 peak — confidence: high
- The mid-2022 commodity peak coincided with ~9% consumer inflation before the disinflation trend began — confidence: high
- Several Fed voting members have discussed the possibility of rate hikes if inflation does not moderate — confidence: high
- Rising commodity inflation could force financial conditions to tighten, potentially catalysing the end of the current real estate and stock market cycle — confidence: medium
- Political pressure from Trump on a new Fed chair to cut rates is unlikely to override the committee voting structure — confidence: medium
Mex Pete References
- GSG (iShares S&P GSCI Commodity-Indexed Trust ETF): Broke above a Mexican Pete pattern at the $24 level on a weekly chart; subsequently surpassing the mid-2022 peak. Cited as a warning signal for a renewed inflation wave.
- CNX Resources Corp (CNX): Added to the model portfolio following a breakout from a Mexican Pete pattern (chart timeframe not specified). CNX is a large U.S. natural gas producer.
Stock Picks / Signals
| Ticker | Action | Detail |
|---|---|---|
| CNX (CNX Resources Corp) | BUY / Add to model portfolio | Breakout from Mexican Pete pattern; large U.S. natural gas producer; positioned in right sector for current cycle stage. No stop loss or price target specified. |
| Crexendo (ticker unspecified) | REMOVE from U.S. watchlist | Pullback invalidates chart pattern; lower low in primary trend indicates accumulation is insufficient. |
Predictions / Forecasts
- A new wave of consumer inflation is foreshadowed by breakouts in copper, oil, and broad commodity indexes (GSG).
- The Fed may be forced into rate hikes or a sustained hawkish stance if commodity-driven inflation persists.
- Tightening financial conditions — if they materialise — could precipitate the peak of the current real estate cycle and stock market top (no specific date or price level given).
Notable Quotes
“The events unfolding in the Middle East could also play a pivotal role in bringing about the end of this real estate cycle and the peak in the stock market.”
“Remember, knowing how to read a chart can hand you valuable insights about what could be in store for the economy. And right now, a variety of inflation-sensitive sectors and commodities are jumping higher and warning of another inflation wave ahead.”