I am writing this issue from Doha, the capital of Qatar. A big piece of news has just broken: President Trump's comment that he has brought the curtain down on the Iran conflict is the talk of the hour. The details of the terms are yet to emerge, but given that this armistice arrives as a "big gift" on his own 80th birthday, a day he is celebrating at the White House with a circus and pro-wrestling troupes, it is not hard to imagine that, behind the scenes, commensurate concessions have been made to Iran.
Congratulations are due first. Yet even in the best case, with the region in the recovery phase from war-driven supply constraints, the Saudi government and others estimate it will take a year to return to pre-conflict levels. Indeed, in Dubai and Doha, at a glance the cafés and supermarkets are entirely as usual and cause no inconvenience; but look closely and the marks of war show, the surge in prices for one. Statistically, Dubai's April CPI was +4.8% year on year; through February it had been in the +2% range, so it has begun to climb sharply. Most conspicuous, month on month, is food: +0.8% in February just before the war, +6.6% in March as the war began, and a further +7.7% in April, matching the felt experience. Transport rose +9% month on month in April, mainly because gasoline is up about 60% versus pre-war; and with port facilities congested owing to the Hormuz blockade, the rise in transport costs tied to reliance on land haulage is beginning to have a non-trivial effect on the overall price level. Taxi fares feel about 10% higher, and restaurant prices likewise; amid fierce competition for customers, the groans of Dubai's business sector come into relief.
I read the outlook for Dubai's property market along three lines. Early calm (alpha) brings a rebound in volumes in the second half; prolongation (beta, my base case) brings a staged correction toward a cumulative minus 15% zone, with softening offices spilling over to the banks; a worsening of Hormuz (gamma) raises the risk of a 2009-style stress redux.
With the world shifting abruptly toward multipolarity, and my base case being that conflict in the Middle East, the world's powder keg, is bound to be protracted, we have no choice but to run the portfolio defensively. Yet the UAE authorities' response to the emergency has been swift and dependable. The damage control by the pairing of the rulers and the foreign technocrats to whom they have delegated authority has been especially quick: at the end of May 2026 a railway opened between Abu Dhabi, Dubai, and Fujairah, allowing offloaded cargo to be moved by train while bypassing Hormuz, a powerful message about the city-state's sustainability. Even under wartime conditions they have fired off finely targeted measures in quick succession, publishing a blacklist of non-paying tenants, subsidizing tenants' rents, and easing the property-purchase threshold to lower the bar for Golden Visa issuance, and this rapid mix of carrot and stick is, I hear, beginning to spark a return of demand to the property market.
In the end, the GCC, which looks dangerous at first glance, is, seen on the ground, moving unexpectedly toward "after the rain, the ground hardens". The UAE, having left OPEC and lifted its production constraints, is putting in place the capacity to supply ample oil to the African nations said to be the frontier of the 21st century. If anything, it is on the side of the sanguine international financial markets and world economy that the red light of complacency is blinking, a gloomy vista I sense from being here on the ground.
Is the Relief That "the Crisis Has Passed" Correct?
On June 14 (early morning of the 15th, Japan time), the US and Iran announced they had "reached agreement" on extending the ceasefire and reopening the Strait of Hormuz. The details are unpublished, and the signing ceremony is planned for June 19 in Geneva. Oil fell: WTI near $81 a barrel, Brent around $83, down about 4% from the prior week's close, a sharp retreat from $125 at the end of April. The backdrop to the market's relief appears to be more than geopolitics: last weekend SpaceX listed, and even as it became the largest IPO in history, a $2.1 trillion market cap at the first day's close, its share price did not break; coinciding with the conflict's resolution, an air of "having overcome two anxieties" has spread. But here, I see a pitfall. Even if the Strait of Hormuz opens under this agreement, the refineries damaged in the war will not be repaired at once. The insurance issues around maritime transport also take time. Ship operators will not normalize Hormuz voyages immediately either. In the end, since supply is seen taking time, including equipment repair, to return to pre-conflict levels, there is a gap measured in years between the "agreement" and "oil actually flowing". This episode is not proof that risk has departed, but a live example of how "heteronomous" Japan's position is. Let me unravel its meaning in turn.
Multipolarity = a Rise in the "Number of Cases" of Possible Futures
The world's turn to multipolarity looks like a matter of the balance of power, but its essence lies elsewhere. In the former US-unipolar world, everyone could simply bet on one premise, "US-led stability", and past data could be used directly to forecast the future. Multipolarity means that premise splits among several poles, and the number of possible-future cases suddenly multiplies. And because events that cannot be undone once they occur (war, strait closures, sanctions, a rewiring of the currency order) increase, optimizing for a single forecast of "on average it will go this way", even if right on average, can spell ruin on one's own single path. In a world where such non-ergodicity advances, our maxim "More Scenarios, Closer to Reality" is precisely the way of thinking premised on this world.
Term note: Ergodicity
An "ergodic" world is one where, if you roll the dice enough times, every face eventually comes up, and one person's long experience matches the average of many: a world where you can start over any number of times. A "non-ergodic" world has one-way doors you cannot re-cross once passed (ruin, elimination), and the average of many tells you nothing of a single person's fate. Even a game of Russian roulette with a mathematically positive expected value will surely eliminate anyone who repeats it alone. What multipolarity multiplies is the number of these "one-way doors".
Seen from this angle, the danger in the "agreement" becomes clear. What Iran gives up are all things that cannot be undone: mine clearing, reopening the strait, waiving transit fees, and ultimately diluting its highly enriched uranium close to weapons-grade (the material one step short of a nuclear weapon). What it receives are things that can later be revoked depending on conditions: a 60-day ceasefire, and sanctions relief conditioned on nuclear talks "making progress". It is a losing bargain for Iran, and Iran, remembering the US withdrawal from the 2015 nuclear deal (JCPOA), does not trust promises to "hand it over later". With its supreme leader now assassinated, the 440 kg of uranium in hand is not a bargaining chip but the last trump card (nuclear deterrent) for the regime's survival. A rational Iran will not surrender its trump card in exchange for revocable rewards.
So the point to watch is not "whether they sign on the 19th" but "which promises they keep after signing". Iran will execute the cheap, revocable parts. It opens the strait in a way it clears mines itself (a form in which it could re-close it if it wished) and secures 60 days of oil-export rights. Meanwhile it defers the costly, irreversible uranium dilution. In other words, the agreement is designed from the outset to be "only half executed". The touchstone of seriousness is uranium: unless dilution begins under IAEA (International Atomic Energy Agency) supervision, the nuclear issue remains untouched even if the strait opens, and the agreement becomes a formality. As a result, even if oil falls, it will not fully return to pre-conflict levels. We organize scenarios as optimistic, worsening, and convergence (alpha, beta, gamma); this is a "convergence with a high floor (gamma)" in which oil does not fall all the way. The lifting factors, elevated oil, geopolitical risk, and de-dollarization, do not vanish with the agreement.
The Taylor Rule, Latest: the Gap from the Proper Rate = "Financial Repression"
The monetary-policy picture overlaps. US CPI for May 2026 was +4.2% year on year, the highest since April 2023 and a third straight month of acceleration. Energy rose 23.5% (gasoline 40.5%), accounting for over 60% of the monthly rise. Core CPI ex food and energy was 2.9%, and the core PCE the Fed watches around 3.3%, both above the 2% target. Applying the Taylor rule, the empirical rule that mechanically derives "the proper rate a central bank should set" from inflation and the economy, a core PCE of 3.3% implies a proper rate of about 4.5% (with the neutral rate set low at 0.5%), or near 6% if computed with the original 2%. Yet the actual fed funds rate is held at 3.50% to 3.75%, and the Trump administration and new Chair Warsh are, if anything, leaning toward cuts. The policy rate runs about 1% to 2.5% below what the rule indicates, and the gap widens the more inflation overshoots. This is "financial repression": deliberately holding rates below inflation to erode the real value of deposits and bonds and lighten the weight of government debt. The June FOMC is Warsh's first call; if he moves to cut amid 4.2% inflation, the gap widens further. The meaning for investors is plain: merely "waiting" in cash or bonds only sees purchasing power shaved away like a tax. Hence one needs to prepare from both sides: real assets with physical backing, and asymmetric hedges (convexity) that pay off precisely in rare, large dislocations.
Japan's Weakness Is That Three Factors Work in Tandem
So, in such a complex world, what does the future promise Japan? Japan's weakness lies in the combination of three mutually linked factors. First, it depends on energy from essentially one place. Its oil dependence on the Middle East exceeds 95%, and about 35% of domestic energy is oil; unlike the net-exporter US or a Europe able to switch sourcing, it has no escape route. Second, yen weakness doubles the blow. Because oil is priced in dollars, when high oil and a weak yen combine, the yen-denominated cost swells not by addition but by multiplication: oil at $90 and 160 yen costs about 70% more to import than $65 and 130 yen. The rate is now 155 to 158 yen, with 160 the "line of absolute defense", and the authorities are repeatedly forced into FX intervention. Third, super-long JGBs (30- and 40-year) and the fiscal accounts. The 30-year yield at 3.6% and the 20-year at 3.3% are too high to explain by a neutral rate of 1.5% to 2.0%, and the gap between short and long rates is abnormally wide (a steepening yield curve). Oil subsidies swell the budget, and record bond issuance presses on the long maturities, while the BoJ, wanting to counter inflation and yen weakness with hikes, cannot move for fear of breaking the JGB market, and leans instead on managing "the issuance amount" rather than the rate: a Japanese version of financial repression.
Running through all three is "heteronomy": a position in which Japan cannot decide for itself and can only receive the decisions of others (the US, Iran, oil producers, the Fed). This relief, too, came from a distant deal in which Japan had no part, one that eased the pressure on oil, the yen, and bonds. The greatest victim, yet the smallest voice. And because that relief is a "convergence with a high floor", it is limited and could be revoked at any time.
"Thinking You Are Diversified" Is Really Concentrated Investment in a Single Point
Japan's standard allocation, yen deposits, JGBs, domestic real estate, looks like solid diversification, but from a multipolar view it is not diversification. It is concentrated investment that stakes assets and income alike on the same single weakness. These all move in the same direction as the three factors above, and one's own salary, pension, and business income are exposed to the same weakness, all in yen. The problem is not the level of returns but that the foundation of one's assets and life is linked together to a single weak point. Each time an "agreement" brings relief, this concentration looks correct; but since the relief is limited and revocable, the reassurance does not solve the problem, it merely grants a reprieve until the next irreversible event.
That is exactly why what one should acquire is "agency". Not a vague "overseas diversification" but "agency": holding, as an allocation, a position in which you grasp risk yourself rather than leaving it to others. We hold positions outside Japan's weak point along the following four axes.
First, real assets. Real estate in EMEA (Europe, Middle East, Africa) and the frontier (early-stage markets even within emerging economies) and the like: assets with physical backing that are hard to erode even under inflation or currency weakness.
Second, a high-credit reserve currency (such as the dollar) at short maturities. Long-maturity bonds fall sharply in price when rates rise (duration risk), and Japan's super-long JGBs have been impaled on this. We keep to short-dated dollars, close to movable cash.
Third, convex preparations. Asymmetric structures with limited loss that pay off greatly in rare, large dislocations. Rather than volatility-index-linked products (VIX ETPs) that erode simply by being held, we use options that profit from a widening of rate volatility (rate-vol payers) and cheap strategies that prepare for declines (put spreads).
Fourth, physical gold. A neutral store of value that squarely rides the flow of nations moving their reserves from dollars to gold (de-dollarization).
Further, the "convergence with a high floor" adds one discipline. Short-dated hedges that bet on a war-driven spike (the worsening scenario, beta) are trimmed by taking profit as the ceasefire is priced in. The long-held core (gold, real assets, short-dated dollars) is not let go, for the reasons that do not vanish with the agreement. A small insurance against the ceasefire breaking down is kept. Harvest the short term, hold the long term: that is the prescription.
Our Strength: the Fund Itself Stands on "Multipolar" Ground
In 2013, the year of the Obama administration's remark that "America is not the world's policeman", I resolved on independence in anticipation of the coming multipolarity, and have since built V++ as an investment vessel structured to benefit from it. Look at the fund's very construction and you see it stands outside Japan's weak point. It is a CySEC (Cyprus financial authority) authorized EU-domiciled Alternative Investment Fund (AIF), and the front lines of management and deal-sourcing straddle the frontier poles of Europe, the GCC, and Eastern Europe. Through a regulated vessel, it can provide the "agency" that Japanese investors, bound to their home market, cannot hold.
The investment philosophy and contents, too, are a design for this very phase, fitted to turbulent times. The optimistic/worsening/convergence (alpha, beta, gamma) scenario table embodies the "harvest the short, hold the long" above; and the asymmetric add-ons, EMEA real assets, short-dated dollar bonds, physical gold, rate options, and the like, which make up half the assets, are the four axes already built into the portfolio. Furthermore, having sites at several poles lets us unearth opportunities hard to reach from within Japan, such as EMEA physical deals gone cheap amid forced selling on the recent rise in geopolitical risk, and realize the investments within a vessel whose investor protection is strictly monitored by European authorities: one of the few routes by which Japanese institutions can gain access while satisfying compliance.
In Closing: Growing Assets Without Being Eliminated, in a World the "Agreement"
Does Not Solve
The right decision in a multipolar world is to maximize not "how much you profit on average when everyone makes the same bet", but "whether you alone can keep compounding without being eliminated". Eliminate yourself once, and whatever the average, for you it is over. This "agreement" is a miniature of that: the signing does not solve the problem but defers it; the relief is limited and the lifting factors remain; and the purchasing power that waits in cash or bonds is quietly shaved away. At our firm, we move positions outside Japan's weak point, defend short and long asymmetrically and separately, and manage with a design to grow assets without being eliminated in any scenario. What the act of investing should prize henceforth is not the promise of return, but "agency" itself: grasping risk by your own hand.