The IRGC Is Damned Either Way — Here’s Why

Transcript

So, the CENTCOM is is was very clever here and then they stuck to the ceasefire when the destroyer was harassed by the patrol boat. They did not escalate. And last Thursday, HCSC in his morning remarks gave what was a very clear and decisive final "Hey, look, we're done. We're done. We are wrapped up here." Trump and JD Vance was also consistent with that messaging. And then they followed up with action in not escalating at that very critical moment. So, if you take a step back, Iran was able to close the Strait of Hormuz through what I call the Keyser Söze maneuver. If you guys have seen Usual Suspects, the guy is like everywhere and nowhere. Like, is he real? Is he not real? Like, Keyser Söze had closed the Strait of Hormuz. Are

there mines there? Are there not mines? Are there rockets? Are there guys in the trees? Or we don't know. It's Keyser Söze controls the strait. What CENTCOM just did, to introduce another meme, was the I am the captain me now. Like, this is my strait now. So, they're creating clarity and they're doing that control. And they said, "Look, we're not challenging you. This is a blockade. And now they put the IRGC in a vice. It's a damned if you do, damned if you don't vice. They have two choices. They can escalate. Right now, they've enjoyed calm and peace for the last 2 weeks.

Their cortisol levels have dropped. They've seen their families. They're starting to formulate a picture of the future might look like. They're glad that they don't have bombs raining down their head. They appreciate that. Okay? They see that. They say, "Okay, look, we can preserve this and build off of this and go back to issuing menacing threats. Or we can contest and strike back and escalate." And this is the best move CENTCOM could have done. You can't control the response of the IRGC, but you can shape the incentives. And they also said they would interdict tankers going to China.

Cuz if you're China, as I said last week, I think you're loving this. You're Putin. Like, China's trying to broker peace deals now. Putin's brokering peace deals. It's nonsense. It's chaos. They're they're soaking it up. But now, if you interdict those tankers, China has an incentive to get this resolved in a constructive way. So, I thought the move by CENTCOM this weekend was extraordinarily clever. The ball's now in the IRGC court. The IRGC chose not to escalate at the timetable when CENTCOM said they would enforce a blockade, too.

So, things were looking pretty constructive. I think the bottom's in for markets overall. That doesn't mean you don't get a pullback, especially going to OPEX later this week, but I think overall, I think you've you've got a bottom. There's so much hedging, so much shorting taking place. There's not many people left to sell, and I think there there are great opportunities out there. So, I agree with Raam on the market action here. The fact that this occurred, it seems to have been Raam, we'll call it relatively well received by the market. Right? That is to say, this blockade didn't happen, the negotiations didn't fall apart, and we didn't immediately go straight back to hell in the market. We've kind of been like, "All right, let's see what happens." as

a reaction. And I agree that what you just said seems to be the key, which is we're out of the escalating spiral of call it kinetic intensification here with this move. We've instead now gotten into call it like long-term economic negotiation. Because if the Iranians can close the Strait of Hormuz, that's a threat. But if the United States can close the Strait of Hormuz, that is also a threat. And that means now the Iranians have to think about their own economics and ecosystem here. If we just maintain a blockade for a year and don't do anything else, they have a huge problem. Iran has significant inflation at home, too. They

have to address that. If they If you don't have a functioning economy, how do you How do you contest a military? Yeah, this this Chris was talking about this on a previous episode, but this moves the war for both sides to a different layer of the strategic level of war, right? Because now the Iranians have existential economic risk for an indeterminate amount of time into the future. And Raam, as you noted, either they end up having to attack the force to try to break the blockade, which looks even worse if they fail, or you've got to find a negotiated solution to get out of this.

It's also interesting to me to see the pressure around this vis-à-vis their regional like neighbors. Because after they launched rockets at everybody, you know what we're not seeing for the Strait of Hormuz blockade by the US is criticism from the other regional powers. Like, the Saudis are fine, the Turks are fine. Like, everybody's just kind of like, "I mean, yeah, guys." >> The Saudis want more conflict, actually. Yeah, if anything, they want escalation. >> Legitimately, they want to continue. And one would reason that Israel's incentives are also in that direction, too. Although both seem to be following US direction.

Yeah, we can go home. They can't go home. This is their neighborhood. They got to live there. And so, they're the the sta- the status quo was just untenable. 50 years of aggression Iranian aggression has to stop. So, this this is an opportunity. Um one thing I do want to talk about is China. Um as you see, I think this is really stepping up the pressure on China. Not only on the economic side. If we are now controlling effectively controlling the strait, um but there were reports that the Chinese were assisting the Iranians potentially with intelligence or even some MANPADS weapons. Uh Trump's response to that was pretty profound.

He's just like, "I catch you doing it, 50% tariffs. See how that goes." And so, I think that China is going to be on it it is going to play a crucial role to kind of navigate out of this thing. Because they're going to want this to stop. They need those They need the natural resources. They need the oil. Um so, Trump was supposed to have a uh meeting with Xi Jinping. Uh that was canceled. That that made them furious. I think it's going to be rescheduled for May. All eyes are on that meeting if it happens. And it's going to be interesting to see the role China plays going forward. That They're a reluctant player on the international stage. That That's That's not in their nature. They focus generally internally,

domestically. But this is really forcing them to uh be be on the main stage. It's going to be interesting to see how they respond. Not in an easy place, but they can come out of this in a in a very good way, um if they play their cards right. So, I'm watching I'm watching China. I think not just China. This kind of creates What's the right way to say this? A pro-peace contingent in a lot of Asia. Because Pakistan has every incentive to get this thing to end. India, quite frankly, has many incentives for it to end. Japan, Korea, everybody wants things to calm back down. And Chris, as you were noting, uh Singapore, who I think keenly

understands these geopolitical dynamics because they are caught between many large like powers globally, is making the point that what we need to get back to is free transit of goods, free trade without call it undue tariffs or piracy or attacks on people. And they were not saying that I like reading their comments. I think in a biased way. They were simply saying like, "Hey, everybody ultimately is going to need to find a way to live together here if this is going to work properly." Bitcoin changed how money works. Cetera changes how Bitcoin scales. With a trust-minimized BTC and a native stablecoin CTUSD, >> [music] >> Cetera enables Bitcoin capital markets with lending, privacy, Bitcoin yield,

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