Crocks for Stocks
There is a powerful deflationary undercurrent that is working its way to the surface, pulling prices down like a Nile crocodile with a French tourist in its jaws.
Thursday, July 9th, 2026
Bill Bonner, from Youghal, Ireland
Isn’t it wonderful how the real world works? Full of contradictions and contrariness...nuance, irony, and cussedness. And just when you think you have your eye on the pitch...along comes a curve ball.
Yesterday, we looked at how Donald Trump brought ‘communism’ out of the crypt so he could make an enemy of it. This was despite the fact the man has leaned further into the socialist wind than any president since Franklin Roosevelt.
And here’s the latest. Raw Story:
President Donald Trump’s White House unveiled a new promotional gimmick this week: “Freedom Fuel,” or a network of 25 gas stations offering what is being billed as cut-rate gasoline to deliver savings to American voters.
“FREEDOM FUEL HAS ARRIVED,” said the White House official account on X. “The FIRST Freedom Fuel Network gas station has LANDED in Philadelphia, lowering the price at the pump to $3.47 for our 47th President. President Trump is leading the charge to lower gas prices this summer — putting more money in your pocket.”
“The average price of gas when Biden left office was $3.12,” wrote liberal journalist Aaron Rupar. “Trump wants to throw a parade for himself over one station where it’s $3.47.”
Well, it’s one for the record books. But we’re just reading the headlines this week; we’re not trying to make sense of them.
And gas stations are not the only ones lowering prices. CBS News:
Walmart is lowering prices on thousands of products, including beef, Coca-Cola and laundry detergent, saying the cuts are aimed at reducing the costs of seasonal summer items.
The largest U.S. retailer on Monday said the price cuts will be available in its stores and in Sam’s Club locations, on Walmart.com, SamsClub.com, and through the Walmart and Sam’s Club apps. The reductions apply to groceries and other household items, such as grills, sunscreen and lawn mowers.
Shouldn’t all prices be going up? Isn’t the money supply rising – especially in China? Doesn’t everybody know the feds will have to ‘print’ money to keep up with their deficits? What gives? Antiwar.com:
US Begins Bombing Iran After Multiple Tankers Struck in Strait of Hormuz
CENTCOM described the new strikes as “powerful,” and Iranian media have reported blasts in several coastal areas, including Qeshm Island and the port cities of Bandar Abbas and Sirik.
Earlier, the US Treasury Department revoked Iran’s oil sanctions waivers granted under the US-Iran Memorandum of Understanding (MoU), which appears to be collapsing.
In this morning’s news, the war drums continued. Antiwar.co:
US Begins Bombing Iran for the Second Night
And Donald Trump, speaking of his Iranian counterparts:
‘They’re scum. You know what scum is? They’re scum. They’re sick people. They’re led by sick people. And they’re vicious, violent people.’
Until yesterday, investors seemed sure that the war was winding down. They thought oil would tumble. Fortune:
OPEC+ to pump more oil as market fears shift from shortage to glut
As they say on Wall Street, ‘markets make opinions,’ not the other way around. It was only a few weeks ago when everyone was sure that oil could only go up. Gulf News in April:
Experts warn oil could climb to $150 within weeks as Hormuz disruption drags on
The disruption of Hormuz traffic has certainly dragged on. But the price of oil went down 25% since the ‘experts’ weighed in. Around $100 at the end of April, it’s was down to under $75 on Tuesday. And then…whoa…Reuters:
Oil surged by more than 5% on Wednesday and global stocks and bond prices tumbled, as investors fled risk assets after U.S. President Donald Trump said the memorandum of understanding signed with Iran to end the Gulf conflict was “over”..
That, of course, just illustrates the risk of short-term guessing. The markets make fools of us all. And we include, prominently, ourselves. We were surprised that the oil price had fallen back to pre-war levels.
Now, we are not surprised that it is going the other way. But as to where it will be tomorrow, we don’t get tomorrow’s news before anyone else. But we suspect that there is a powerful deflationary undercurrent that is working its way to the surface, pulling prices down like a Nile crocodile with a French tourist in its jaws.
Earlier this year, it looked like gold had gone up too far, too fast. And yet, the argument for buying gold was persuasive. Stocks, bonds and the dollar were doomed; what else would you do with your money?
But by mid-summer...and the dollar was up 7%. Gold had lost 26% of its value. And silver had been cut in half.
Has the Primary Trend shifted? Has inflation given way to deflation? Is the crocodile now headed for the US stock market?
Time to ‘buy the dip’ in gold? Or load up on more AI stocks?
Tune in tomorrow...
Regards,
Bill Bonner
