Down the Mountain

When the stock market closed, just four hours before this apocalypse was to begin, US capital values were about where they were when the market opened. The stock market didn’t take any of it seriously

Wednesday, April 8th, 2026

Bill Bonner, writing from Baltimore, Maryland

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‘A whole civilization will die tonight.’

—Donald Trump

It was the most amazing thing. The president of the USA, backed by his ‘Secretary of War’ threatened a cataclysmic attack. The oil infrastructure would be decimated all over the Middle East. Entire countries, their desalinization plants flattened, would be unlivable. The world economy would almost certainly go into depression...if not a world war. And upcoming elections would probably leave Congress in Democratic control…which would probably aim to have Trump arrested for War Crimes.

It appeared that POTUS had gotten himself in a corner. It was extremely unlikely that the mullahs would cry uncle now...knowing that they might be murdered while they were negotiating. But the president had made his threats so forcefully, it didn’t seem as though he could TACO this time. He’d be a laughingstock. A loser. A schmuck.

And yet...when the stock market closed...just four hours before this apocalypse was to begin...US capital values were about where they were when the market opened. Apparently, the stock market didn’t take any of it seriously.

And the market was right!

And now we wonder. Is there really a ‘ceasefire?’ What does it mean?

We don’t know either. But we hope you followed our advice to ‘lay in some supplies of necessities’ just in case. Trump and Netanyahu have dropped 32,000 bombs on Iran. That’s probably not the end of the story. And while it’s not likely to mark the end of a civilization, it could turn out to be more than a footnote in world history..

It’s the end an empire, says Tucker Carlson...the US empire. He may be getting a little ahead if himself. The US has not been overrun by enemy troops...like Rome in 472 or Germany in 1945. Nor has it suffered the kind of catastrophic defeat that walloped Bonaparte in 1812. Nor was it the kind of humiliation suffered by Britain at Suez in 1956. But there is little doubt that the Iran War will figure as a milestone on America’s long hike down the mountain.

So will these other headline stories. The Economist:

China has a better approval rating across the world than the US does, representing a shift since Trump took office. According to new Gallup polling, a median of 36% of those polled across more than 130 countries approve of China’s leadership, while 31% approve of US leadership — the largest edge Beijing has had over Washington in almost two decades. US approval across the globe slid from 39% to 31% between 2024 and 2025, during which time Trump began his second term. The poll was conducted in 2025, and does not account for recent foreign policy moves by the new administration — like the raid that captured former Venezuelan leader Nicolás Maduro or the Iran war. America’s approval has declined across many US allied nations, and sunk the most in Germany (by 39 percentage points). Israelis’ view of the US did improve from the prior year.

America’s one-time friends are distancing themselves from Trump’s ‘whole civilization will die tonight’ negotiating technique. Former allies are reconsidering their commitments. Independent nations are ‘gunning up’ to protect themselves.

Total world military spending is rising about three times faster than GDP. Wikipedia:

Global military spending reached $2.718 trillion in 2024, marking the highest figure ever recorded. This amount represents an 9.4% increase over the prior year.

One of the many reasons given for the attack on Iran was that it would stop the proliferation of nuclear weapons. It probably will have the opposite effect. CFR.org:

Why U.S. Allies in Asia Are Chasing Nuclear Energy — And Eyeing Nuclear Weapons

The Iran war’s energy fallout is speeding up a debate in Japan and South Korea about expanding nuclear power capabilities, while the Trump administration’s recent shift away from Asian allies has sparked dialogue about whether the two Northeast Asian powers should develop their own nuclear weapons.

Foreigners are moving to protect their money too. Gandalv via X:

France Has Moved All Its Gold Out of the United States

The Banque de France has completed a full withdrawal of its gold reserves from the Federal Reserve Bank of New York. Between July 2025 and January 2026, 129 tonnes of French gold stored in New York were sold and replaced with equivalent bullion purchased in Europe. All of France’s 2,437 tonnes of gold now sit in Paris. Every last bar.

And France is not alone.

Germany still holds 1,236 tonnes of gold at the Federal Reserve, roughly 37 percent of its total reserves. The pressure to bring it home is building fast. Michael Jäger, head of the Association of German Taxpayers, has been blunt: Trump is unpredictable, does everything to generate revenue, and Germany’s gold is no longer safe in the Fed’s vaults. The age of trusting Washington with Europe’s gold may be quietly coming to an end.

And here’s the Financial Times:

Foreign central banks sell US Treasuries in wake of Iran war

International official holdings at New York Federal Reserve fall to lowest level since 2012

The Iranians...and the Chinese...are leading the world away from the US empire’s dollars. Fortune:

Iran is already charging a toll, in Yuan, for oil sold through Strait of Hormuz

The US and its money are headed down. But what kind of landing can we expect? The stock market is sees no evil coming. Should we? Stay tuned...

Regards,

Bill Bonner

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Research Note, by Dan Denning

Foreigners own about $17 trillion worth of US stocks, according to old data from the US Treasury (Foreign Portfolio Holdings of US Securities, 2024). But in the US government bond market, it’s closer to 33%, or about $8.2 trillion of publicly traded US debt.

Does this give foreign bond holders the ability to drive up US interest rates by selling US government debt?

In theory, yes. The foreign ownership of US bonds, notes, and bills is split between private investors ($4.4 trillion) and central banks or governments and sovereign wealth funds ($3.8 trillion). Highly motivated foreign selling—for any reason—could push US rates up (and force the Fed to ‘monetize’ new debt by printing money to buy it, leading to higher inflation in the US).

The most current numbers show foreigners own $9.3 trillion in treasuries, with Japan at $1.1 trillion, the UK at $866 billion, China (mainland) at $683.5 billion, Belgium at $477.3 billion, Canada at $468.2 billion, and Luxembourg at $435.1 billion. China, by the way, has liquidated almost half its Treasury position over the last dozen years (from a peak of $1.3 trillion in November 2013). China’s official gold reserves have more than doubled over the same period of time.

As Investment Director Tom Dyson has pointed out, the big capital gains on offer in US tech and AI stocks have driven demand for the dollar. A major stock market correction, then, could lead to a much weaker US dollar….and higher import prices (food and fuel) for Americans. Paid subscribers should look for Tom’s weekly note later today.