Deja Vu, It's 1973 All Over Again

 9/4/2026

Déjà vu, It’s 1973 All Over Again

Several U.S. military leaders have advised Defense Secretary Pete Hegseth that prolonging large-scale operations against Iran is unsustainable and risks weakening their ability to confront threats elsewhere

Hegseth Extends Mideast Deployments Into 2027, Escalating Strain on Troops.

Richard Nixon had been re-elected in 1972 to the chagrin of the press. Nixon and the press despised one another. Ditto for Trump today.

Then Nixon had promised to solve/end the Viet Nam war. Trump made the same promise for Ukraine. Now we have Ukraine and Iran.

Oil prices soared with the first Arab embargo in October 1973. Fifty-three years later, oil prices are again rising, now at $90 here, $Brent is $96.

Interest rates were rising then. Nixon took the US off the gold standard in August, 1971. Federal expenditures would soon explode, backed by fiat money. Today we have a $40 trillion national debt.

Stories of bond vigilantes are all over the news. A bond vigilante is one raising interest rates on existing bonds. The message is that the market will demand higher interest rates as expenditures balloon world-wide.

The stock market had notched another high over Dow 1,000 by 1973. This tied the high of 1966. Today the DOW has made new highs around 54,000. Again, a tech boom, this time in semi-conductor chips and the Magnificent Seven tech stocks, has accounted for the rise. That segment of the market however represents only a handful of stocks.

Despite all the talk of Nvidia, the SOX index of semi-conductors topped at 14,000 in June. It now trades around 11,000.

The Transportation Index topped in April at 24,500. It now trades under its 50-day moving average at 20,861. Higher oil prices knocked every Transportation issue lower this week. Transports are not confirming the highs in the Industrial index.

The price of West Texas Intermediate crude oil is trading above its 50 and 200 cay moving average.  The previous high was March 11 around $120. Price has now broken above the downtrend line from that high. This suggests the oil market will make another run at that previous high. In fact, I expect it to do so. With an expected Democrat takeover of the House, things will only more difficult for Team Trump.

Mark Twain observed that history does not always repeat but it sure does rhyme. The parallels of now and 53 years ago are too strong to ignore. Markets now enter the seasonally weak fall period.

Be careful out there.  From January 1973 to December 1974 the DOW lost about half its value. The low of December 1974 was 577.

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