Episode 39: Calm Before The Storm? With Vincent Deluard

The market's calm amid escalating Middle East tensions may be a dangerous illusion, warns Vincent Deluard, Director of Global Macro at StoneX. He argues that the current bull market is not pricing in the long-term structural damage from geopolitical conflict—especially the permanent erosion of U.S. dominance, a weakened dollar, and a new, more aggressive Iran. Deluard contends that U.S. treasuries, once the ultimate safe haven, have lost their protective function, now acting as a geopolitical weapon used by adversaries to pressure U.S. policy through yield spikes. With no clear replacement for treasuries as a risk-off asset, he suggests the yen could emerge as a new, underappreciated safe haven—backed by Japan’s massive reserves, historical ties to Iran, and a strong defensive floor at 160. The episode ends on a sobering note: the market is pricing in zero risk of escalation, despite troop movements and historical precedents suggesting war often spirals beyond intent. Deluard’s broader thesis—what he calls the 'end of the 500-year human intelligence bubble'—hints at a secular bear market ahead, driven by the collapse of Western exceptionalism and democratic stability. Deluard’s analysis challenges the notion that markets are rational or forward-looking. Instead, he sees a dangerous disconnect: investors are chasing momentum while ignoring deep structural risks.