Thoughts on Coming Apart and the Coming Great Reset

Turning and turning in the widening gyre

The falcon cannot hear the falconer

Kit Webster

Themes and Theses

Why I'm Contemplating Out Loud

(Initially formulated in the early 90s, following decades of reading history, philosophy, religion, psychology and a lot of contemplation, particularly on the subject of cycles. In the end, this is a relatively straightforward story about human nature and of history rhyming.)

The US will enter a period of crisis in the early 2000s. In the late 90s, I incorporated Strauss' and Howe's terminology of the Fourth Turning (without incorporating their generations paradigm) and agreed with Howe that the end stage of the crisis began with the Great Financial Crisis and would last into the early 2030s. We are now at the beginning of the end stage of the crisis.

The crisis will be serious and could be existential.

Internal strife will increase, up to and including secession and civil war.

International conflicts will increase as the vacuum created by the weakening of the US is filled by other players.

There will be many threads to the crisis, but the primary thread will be debt, deficits and entitlements. Other factors include, eg, demographics, a loss of meaning and myth and a loss of self-discipline.

Politics will move leftward as citizens look for some refuge from the chaos. The US will become increasingly susceptible to a (man) on a white horse, who can come from either the left or the right.

Inflation, as the most likely way to address debt since austerity is not politically acceptable, will significantly lower standards of living, exacerbating the civil crises.

Eventually, the dollar will be inflated away and lose its reserve status.

Once the old rot is cleared out, and assuming continuity, there will be the basis for the establishment of a new order.

There will be what Strauss and Howe calls a First Turning . It will be constructed out of the physical infrastructure, wealth, energy sources, thoughts and values in the culture at the time. At this point in time, those components are unknowable. We can anticipate that the next future will be increasingly chaotic. We can anticipate that there will be destruction, and then reconstruction from some level. We cannot yet anticipate the form of the reconstruction or the level from which it will begin.

(Added in the early 00s) While humans are contributing to global warming, policies implemented to address manmade global warming will create a significant energy crisis, probably toward the end of the Fourth Turning.

(Added around 2020) The loss of faith by our youth in our founding principles means that the new order will at least partially be based on new principles. As yet, I have no visibility as to what those principles might be.

(Added in 2023) The lowering / elimination of standards in education, the judiciary, law enforcement, the military and other segments of our society will create a population unable to adequately comprehend, do or respond to the challenges of democracy and culture.

(Added in 2025) China has won - at least for the next 5-10 years. The US is dependent on China for the materials it uses to create defense items. We literally cannot fight China without China's help. China's industrial base is impressive; the US has to rebuild. China is out-innovating the US. China is turning out more engineers and scientists than the US by far. This does not mean that China does not face challenges - demographics perhaps being its primary challenge. The US military remains stronger than China's, but in an age of drone warfare, that statement means less than it has historically. The US still has bargaining chips and will need to use them to maintain any kind of status quo.

(Added in 2025) AI has the potential to profoundly affect human culture. However, AI faces several significant hurdles, including the demand for massive amounts of electricity, which may not be available, and a cultural revolt against its existence. Since it could be existential, and since China is pursuing it, the US has no alternative, at least in the short term.

(Added in 2026) Maneuvering for control of critical materials will be a primary driver of geopolitics for at least the next decade.

THE Primary Problem

June 26, 2026

Quotes to Contemplate

Nothing is going to change without a crisis in any significant way. There is just too damn much inertia and you’ve got two disparate sides that are becoming increasingly hostile. - John Mauldin

When I heard the terms (of the Iran deal) I thought it was an Onion article. ... This would be a complete capitulation of everything the US has cared about for the last 45 years. - Peter Zeihan

Summary of Primary Thoughts To Contemplate In This Issue

Debt, deficits and entitlements are bringing us down.

AI is either existential or it is not (I think it is). If it is then quit bitching and get on with it. Data centers, water, electricity - all of it. This is like global warming, only much sooner and more tangible.

Once you know what you want to achieve and what the associated trade-offs are, you are ready to get under way.

The Musk Conundrum

Ed Markey - Senator from Massachusetts - "Elon Musk just became the world's first trillionaire. While working people struggle to get by, the billionaire class is becoming the TRILLIONAIRE class. It's disgusting. I'm fighting to tax the rich so we stop rewarding trading stocks over punching clocks."

AOC - Musk is "unintelligent."

Jared Dillon - I have many more issues with Ilhan Omar being worth $30 million than Elon being worth a trillion.

We now have a trillionaire - the perfect symbol of our age of over-the-top excess.

Musk is both brilliant and a modern day PT Barnum or maybe a little Harold Hill.

He has personal inclinations and habits I do not care for.

A South African immigrant - topic for another day, but the immigrant bit is worth noting.

His accomplishments have been staggering - simply staggering.

You have heard me say that before you begin implementing anything, including a government, you have to decide what your objectives are.

Also that everything is good and bad and you have to weigh the trade-offs.

Socialism is fine so long as you do not care about economic growth.

The cultural bits of socialism are incompatible with freedom because people are unequal and therefore equality of outcome has to be enforced.

Humans seem to be incapable of creating an equal society.

If that's ok with you and equality of outcome is what you want, then go for it.

There is no right way to do things - only objectives and trade-offs.

I want to make a different point.

Taxation and redistribution of wealth are in vogue and are crucial parts of the mechanism of enforcing equality.

Let's do a very simplistic thought experiment.

Musk gets PayPal up and running. The government taxes his profits and wealth so that he cannot invest them in Tesla or SpaceX or the Boring Company or X or Starlink.

Something like 155,000 jobs would not have been created.

Technology would lag behind.

And 4,400 people, including welders, would not be millionaires today as a result of the stock offering.

And nobody would know because no one was expecting it and it didn't happen. Kinda like if we never had slavery, we would never have known Ellla Fitzgerald or Michael Jordan. Some white guy - Larry Bird? - would be the GOAT of basketball, we would be very happy with him and not know what we missed out on. Barbra Streisand and Celine Dion would remain unrivaled.

This kind of analysis is easy to overstate. Someone else would be successful with rockets, but so far, no one is. Someone else would have come up with Starlink sooner or later. BYD is crushing electric cars, but Tesla paved the way.

But, if we were a socialist country, it is not clear that PayPal would have gotten off the ground (if there is no consumer society, what's the point?) or that there would be capital available for Bezos to do his rocket thing.

For those of you who say that China is a Communist country - first, no it's not. But much more importantly, tell me about the equality there. China's gini coefficient is equal to or higher than that of the US.

It's complicated, because the United States, as part of the British Empire, could probably never have been socialist. Too many educated people, too much natural resources, too much Enlightenment. But if you squint really hard and ask what the US would have been if it had started out socialist, my wild guess would be Argentina or Venezuela. Doing reasonably well, dictators coming and going, and having no idea about what could have been - say Argentina before Peron (Peron's socialist revolution was literally a tragedy for the country, but he is still lionized in the memories of the poor). Maybe half the standard of living. North Korea is neither Communist nor socialist, but North Koreans can look across the border and actually see what might have been.

Most of the West is prosperous today because it is mostly capitalist and is freeloading off of US innovation and military. Norway and Finland are wonderful places to live for a number of reasons, including the protection and innovation of the US. (I am not using "freeloading" in the Trumpian sense. The US set up the post-WWII system specifically to be reliant on its military and dollar. It wanted the West to be dependent on the US. The US's innovation came as a bonus for the West. That system allowed other countries to not have to spend on innovation and military, enabling them to increase their standards of living. Finland is excellent for many reasons, including its culture. However, all of that was partially enabled by the US.)

Capitalism, as I noted in my book, is past its sell-by date. We are heading toward a radical reorganization of our economy and potentially our ideology.

I believe that reorganization is way overdue.

Be careful what you ask for during that process.

Objectives and trade-offs, people. Objectives and trade-offs.

For more nuance, see Claude's comments at the bottom of this newsletter.

In another article, we will examine the dirty little secret that we are in so much trouble that taxing the rich 100% will barely make a dent. But it does make for good sloganeering, assuming you don't think about it or understand the situation.

(Actually, we already tax the hell out of the rich. The top 1% of earners pay 40% of income taxes. If California did not have the rich of Silicon Valley and Hollywood, the state would be a shadow of its current self. The discussion today is more around a wealth tax, which is generally a bad idea, but, for reasons I will get into another time, I think some wealth redistribution is important, but not for deficit reduction reasons. A wealth tax is probably an idea whose time has come. People are angry about inequality, and governments need money.)

So, You Say You Want A Revolution?

> Very big - China is preparing to spend around 2 trillion yuan ($295 billion) over the next five years on building data centers across the country, fueling Beijing’s ambition to propel the domestic AI sector and surpass the US in a potentially game-changing technology.

People - AI is either existential or it is not (I think it is). If it is then quit bitching and get on with it. Data centers, water, electricity - all of it. This is like global warming, only much sooner and more tangible.

> Ebola is still out there.

> You just can't be weird enough to predict human behavior - “Pro-algae” protesters gather at the Lincoln Memorial Reflecting Pool, advocating for it to be restored to its former green state.

> Los Angeles voters will decide whether noncitizens can vote in city elections after the City Council advanced the measure to the November ballot.

> Tulsi Gabbert, on her way out, dumped reports on Covid and Fauci. There is a lot there that you should review, including the number of bio labs funded by the US. However, at bottom and in summary, she confirmed our discussions in this space that the bat research in Wuhan was at least partially funded by the US, through Fauci. It is highly likely that Covid resulted from a lab leak from a lab experimenting on bat viruses, partially funded by the US.

> You may recall that Trump had the Reflecting Pool in DC repainted. In a great metaphor, that paint is already peeling.

A Simplistic Mental Model

In thinking about the way the world works, here is my much-too-simplistic mental model.

Five human groups participate in all decisions to a greater or lesser degree:

1. Those who want to maximize outcomes, usually material well-being.

2. Those who want to help people and minimize harm - there are downsides to every decision.

3. Those who want to advance an ideology or idea - religion or ideology or single issues - think abortion or gender or global warming.

4. The clueless. They throw random, generally uninformed/stupid ideas into the mix.

5. Those who want to game whatever the resulting decision is, including extracting rents. This includes criminals and politicians.

THE Primary Problem

It's not in the news or papers.

We're simply having too much fun and no one likes a wet blanket.

It is my CENTRAL thesis.

In an podcast with Grant Williams, Rick Rule restated my premise better than I could.

Here is the transcript -

"I think it’s important because I think it’s important that people understand the trade so they have the guts to stay the trade. True volatility. So let’s begin. I have a talk that I do called the Math of America and I’ll save your audience the whole talk, but it goes like this. The on balance sheet liabilities of the US government, excluding state and local governments is approaching very quickly $40 trillion. Now to put that in context, that’s about 115% of GDP. And strangely, that’s not the scary number, as scary as it may be. The scarier number is the net present value, the discounted value of our country’s entitlement promises. Your viewers can look at me to see the embodiment of that. Old people, Medicare, Medicaid, Social Security, the military pension, government pensions. That number, according to the Congressional Budget Office, exceeds $120 trillion. That’s not private pensions, state pensions, local pensions. This is federal stuff. So you add those two together, 40 to make the math easy. 120, that’s $160 trillion. Big number, but let’s put the number in context.

The internal revenue service whose job it is to know suggests that the aggregate private net worth of all Americans is $172 trillion. So the top number is 172 and you subtract 160 from it. That means the delta is $12 trillion. Now the detractors will say, but that leaves out the federal assets, battleships and stuff. A bond holder can go up to the government and say, “You owe me Yosemite.” It doesn’t work like that. When the debtor’s nuclear armed, your opportunity as a creditor to collect, very low. That isn’t bad enough that $12 trillion delta isn’t bad enough because the on balance sheet liabilities grow by two trillion a year and by horrid coincidence, the off balance sheet liabilities grow by about two trillion a year, two, which suggests that we use up that delta in three or four years, which is to say in three or four years from a credit perspective, our calls exceed our means.

If you read the popular press or the popular pundits in the US, they say, “Well, the billionaires need to pay their fair share. The aggregate net worth of America’s billionaires, according to the congressional budget office, is about $7.2 trillion. So if rather than increasing their taxes, you just stole all their money you solve those deficit problems for two years without addressing the principles and you remove the biggest taxpayers in the United States from the roles of the taxpayers because they can’t earn or pay capital gains on capital that they no longer have. I believe this is an insolvable problem myself. Grant, you’ve been around a long time. We could be honest about it. We could be like the Argentines and default. We could say to the bond holders, too bad, so sad. No money, strong letter to follow. And we could say to the old guys, which we probably should, guys like me at least. “Yeah, you paid in for 60 years, but there’s no dough. You’re not getting anything out. “ That’s not the American way.

So I think what we’re going to do is what we did in the 1970s. We’re going to inflate away the net present value of the obligation without defaulting on the nominal obligation, specifically in the decade of the ‘70s according to the then congressional budget office, the US dollar lost 75% of its purchasing power over 10 years. And I believe that we’re in the midst of the same sort of decade. I believe specifically that the US dollar over the next 10 years loses 75% of its purchasing power, which is to say that $120 trillion in off balance sheet liability becomes a nominal 120, but a real 40. That has real consequences for people living on fixed incomes and for people who think that their savings will sustain their lifestyle in 2036 the same way it will in 2026."

The Market

We still need a retracement in the stock markets, but I continue to be bullish in the medium term. Bitcoin, gold and oil are probably in for a bad few months.

The Iran War

> The US and Iran have entered into a Memorandum of Understanding regarding their war. In essence, this is a stop-gap measure and the basis for coming to a permanent agreement. The permanent agreement will come within 60 days, unless the deadline is extended (it will be extended, several times). In the meantime, it seems that the MOU will be tenuous and brittle, particularly as Israel continues its operations in Lebanon.

The treaty was signed by Trump in Versailles. We could have picked a better place.

There are 14 points; here are the most important:

Iran agrees never to create a nuclear weapon. The current stock of enriched uranium is subject to further negotiation. Iran will maintain the status quo regarding enriched uranium during the negotiations.
The Strait of Hormuz opens within 30 days. There is no language regarding fees or tolling. And that assumes the mines can be swept.
All sanctions lifted from Iran.
$300 billion will be given to Iran for reconstruction.
Iran's frozen funds will be unfrozen.

There is a long, long way to go to final agreement, but a framework is in place to go forward.

Here are my primary takeaways:

Iran agreed not to develop nuclear weapons.
This is the beginning of the end of the erosion of the world economy from the war. The Strait will not fully open for a while, it will take maybe 60-90 days to get tankers repositioned and normal flow under way, and there is much damage to wells and infrastructure that needs to be repaired throughout the Middle East, including damage to US bases. We will learn about the impact on food supplies in perhaps six months.
Israel was thrown under the bus. It will take time, but there is nothing preventing Iran from basically reimplementing its prewar intimidation of Israel through Hamas and Hezbollah.
So far, it appears that the US received nothing that was not contained in Obama's agreement with Iran that Trump terminated. Iran gets sanctions lifted. We lost a lot of weapons, 14 lives and significant amounts of credibility. Someone is going to pay $300 billion. Iran lost perhaps 3,500 lives and a large number of buildings and a large amount of infrastructure, including military infrastructure.
The world has been permanently changed. Everyone will work on oil routes around Iran; green energy is now top of mind for strategic reasons, not necessarily environmental reasons; the US has further damaged its reputation and credibility.
Iran won the negotiations by a bunch.
Major, very serious error on Trump's part.

Predictions - very tenuously held. -

Negotiations will take longer than 60 days - potentially much longer.
Iran will toll the Strait.
Iran will keep its enriched uranium.

> It's always complicated, but I think Trump indicated why he decided to reach agreement - "The alternative to this deal was a global recession. There are stupid people who want to see a global recession. They are just stupid people. The Strait of Hormuz would never have been opened." "Also, we would run out of oil reserves at about 4 weeks, you know, there are reserves all over the world, and we would really run out, and there'll be a time when you wouldn't be able to get it." Of course, Trump says a lot of things, but this one actually rings true. If he had added something about being unable to attain his military goals, I think he would have touched all the bases as to why this is coming to an end. As we have discussed here, once Iran decided to stand and fight, Trump lost.

> It looks like Vance has been assigned the job of riding point to justify and support the MOU.

> The Telegraph is the British Conservative paper, but not necessarily a Trump fan. At the bottom of this newsletter is their review of the Iran agreement.

> From X - If the US only targeted military targets, what will Iran “reconstruct” with $300 billion?

Short Takes

> You have been warned - A psychic warns that on the upcoming June 24, while the match between Brazil and Scotland is being played, there will be an extraterrestrial invasion, and millions of people will be abducted.

> Australian chant at Turkey (it's now Türkiye) during World Cup - "You're shit, but your kebabs are good."

> I had it once in Scotland - why would anyone want to do that? - Massachusetts becomes the first U.S. state to legalize haggis.

Gallery

Miscellaneous

Claude - Socialism and Prospertity

The social-democratic / welfare-capitalist cases (Nordics)

If your bar is "lowest inequality combined with high prosperity, sustained over decades," the Nordic countries — Sweden, Norway, Denmark, Finland — are the strongest real-world performers. They run consistently among the lowest Gini coefficients in the developed world alongside high HDI, high social trust, and strong mobility. The crucial caveat, which gets blurred constantly in popular debate: these are market capitalist economies. They have private ownership, stock markets, billionaires, and (Sweden especially) fairly business-friendly product markets. What makes them egalitarian is high taxation, universal services, strong unions, and centralized wage bargaining — not public ownership of production. So they're the best case for attained equality + prosperity, but a weak case for socialism in the Marxist sense. Sweden's own brief experiment with the Meidner wage-earner funds in the 1980s, which would have gradually socialized firm ownership, was politically defeated and rolled back — which is itself instructive about how far even these societies chose to go.

The Marxist-Leninist states (USSR, Maoist China, Cuba, Eastern Bloc, Yugoslavia)

If your bar is "actually socialized the means of production," these qualify, and they did compress some inequalities sharply — flattened wage distributions, mass literacy campaigns, expanded healthcare access, and in several cases major gains in women's formal labor participation. Cuba's health and literacy indicators relative to its income are the most commonly cited success on this axis. But the record is genuinely mixed-to-grim on the broader claim of "success" and "equality": political repression and the absence of civil liberties, catastrophic famines (the Great Chinese Famine of 1959–61 with death-toll estimates that range widely — commonly cited in the tens of millions; the Soviet famine of 1932–33 in the millions — both figures are estimates and politically contested), and the emergence of a nomenklatura — a party-elite class with privileged access that constituted a new hierarchy. So equality was real along some dimensions and illusory along others, and it came bundled with costs that most people weighing "success" treat as decisive. Yugoslavia's worker self-management model is the most interesting variant — genuinely distinct, with worker councils and "market socialism" — but it ran into chronic economic problems and ultimately dissolved.

The worker-ownership and sub-national cases

These are, to me, the most underrated part of the conversation because they sidestep the state-vs-market framing:

Mondragón in the Basque region of Spain is a large federation of worker cooperatives — tens of thousands of worker-owners, one of Spain's bigger industrial employers — operating profitably inside a capitalist economy for decades, with bounded pay ratios between top and bottom. It's the strongest existence-proof that worker ownership scales beyond a commune. It's not without strain (it uses non-member contract labor, and a major member co-op, Fagor, failed in the 2010s), but it's real and durable.

Kerala (India) — governed for long stretches by communist parties within a capitalist national economy — posts human-development outcomes (literacy, life expectancy, health) far above what its per-capita income would predict. Often cited as redistribution-and-public-services done well at the regional level.

The Israeli kibbutzim were genuinely, voluntarily egalitarian internally — but small-scale, self-selected, and most have substantially privatized or marketized since the 1980s–90s, which is a data point about the durability of pure intentional equality at the community level.

My honest synthesis

There's no clean case that satisfies a strict reading of both "socialism" and "successfully attained equality with prosperity and freedom" simultaneously. The societies that best attained durable equality with high living standards (Nordics) did so through redistributive capitalism, not socialism. The societies that most fully socialized production (ML states) achieved partial equalization at costs — repression, famine, new elites — that most assessments treat as disqualifying for "success." The hybrid and sub-national cases (Mondragón, Kerala, Yugoslav self-management, kibbutzim) are the most genuinely interesting because they show specific egalitarian mechanisms working in bounded contexts, but none scaled into a full national socialist order that endured.

Which of these reads as "the best example" depends on which tradeoff you're willing to accept — and that's a values question as much as an empirical one, which is why the debate doesn't resolve.

The Telegraph on the Iran Agreement

How Trump’s ‘Operation Epic Disaster’ turned the world against America

Donald Trump wanted to bring the Islamic Republic to its knees. He failed on all counts

Iona Cleave in New York. Joe Barnes Diplomatic Editor. Connor Stringer Chief Washington Correspondent, at the G7 summit in Evian

Published 18 June 2026 6:31am BST

The US’s war in Iran has left many questions unanswered and many stated objectives unaccomplished

One month into Operation Epic Fury, Donald Trump insisted that one of the most intense military campaigns in recent history would soon be over.

“We are on the cusp of ending Iran’s sinister threat to America and the world,” the US president said in a primetime address.

Almost two months later he signed a deal to end the conflict that many argue favours Iran and fails to meet his primary objectives.

The Iran war has revealed the limits of US military power to achieve political objectives. But it has also left allies and partners questioning their relations with Washington.

“We deployed American power recklessly and incomprehensibly,” said Aaron David Miller, a former US state department negotiator and adviser during multiple Republican and Democratic administrations.

“The moral and strategic argument is that Operation Epic Fury has been an epic disaster,” he said, adding: “What significance did this war have to advancing the national interests of the US?”

Mr Trump spent his last day at the G7 summit in Geneva this week trying to quell concerns about the peace treaty.

The page-and-a-half-long deal, signed on Wednesday night, consists of a broad and apparently flimsy set of principles to keep peace and kick contentious issues into the long grass.

Trump has promised that the crucial Strait of Hormuz – through which a fifth of the world’s oil passes – will remain open, but that remains to be seen Credit: Anadolu

Among US allies, concerns are being raised privately that the rushed framework is light on nuclear concessions and heavy on financial incentives.

A senior European diplomat said: “The deal will turn out to be a win for Iran. I don’t think Iran will give much in the coming 60 days of negotiations.

“Obviously, Iran has been degraded somewhat by the military campaign, but psychologically and politically I think Iran is the winner, at least for now.”

The conflict put unprecedented strain on the transatlantic alliance. Some European countries denied American warplanes use of their airspace, while the refusal of Nato countries to send warships to help reopen the Strait of Hormuz infuriated Mr Trump.

It culminated in Mr Trump threatening to abandon the alliance altogether.

The diplomat added: “The frustration with the current erratic foreign policy swings is growing and increasingly visible. We have always answered the phone, when the US has called. For the time being, those phone calls will be picked up less frequently.”

Donald Trump and Sir Keir Starmer talking during the G7 summit. Mr Trump was frustrated by Sir Keir’s refusal to come to his aid against Iran Credit: Pool/Getty Images

Militarily, the US has depleted its critical missile and munitions stockpiles and overstretched its artillery, forcing the relocation of assets from the Pacific.

The Gulf states have suffered severe damage to energy facilities and incurred heavy economic losses. Their long-held image as safe and luxurious tax havens has been shattered.

Israel, still at war with Iran-backed Hezbollah, has been sidelined in negotiations and forcibly brought to heel by Mr Trump, while its support in America is being drained.

The Iranian regime is emboldened, hardliners are empowered, and the civilian population is suffering from intensified repression.

Tehran will commit to fully reopening the Strait of Hormuz within 30 days and reiterate its pledge to never produce a nuclear weapon – positions it held before the war began.

The White House has insisted “no dust, no dollars”, meaning Iran has to surrender its 430kg of highly enriched uranium before it gets sanctions relief. But such nuclear concessions were already on the table in February, days before the war began.

The terms have led allies to privately ask: What exactly did Mr Trump go to war with Iran for?

Even Mr Trump’s inner circle is expressing doubts. Marco Rubio, the US secretary of state, Pete Hegseth, the defence secretary and John Ratcliffe, the CIA director, have reportedly questioned Iran’s good faith.

“It is emblematic of everything that is wrong with the Trump administration,” Mr Miller said, citing the lack of reliance on expertise and intelligence, the politicisation of American foreign policy and “Trump’s own predilections that US power is unlimited”.

More broadly speaking, Mr Miller added: “America’s capacity to deter has been undermined.

“The Islamic regime has now survived the largest deployment of US air, naval and missile assets since the Iraq War and survived a military campaign against Israel, the region’s most important military power.”

However, American credibility will recover, he said. “After Vietnam, the Iraq war, the disastrous withdrawal from Afghanistan, people believed the US would never lead again. I didn’t believe them then, and I don’t believe it now,” he said.

Mr Trump’s credibility, on the other hand, may not. His shifting war objectives, constantly misleading public messaging and inability to secure what he promised have eroded public trust, polls repeatedly show.

“Trump overestimated the ability of the military to accomplish political objectives and learned the limitations of force,” said David Schenker, the assistant US secretary of state for Near Eastern Affairs under the first Trump administration.

Shattering the illusion of security

Among the most urgent questions about US power and trustworthiness come from those in the Gulf who must confront the new reality that the US cannot ensure their security.

During the war, the presence of American forces in the region attracted, rather than deterred, attacks by Iran – helping to shatter the illusion of the US security umbrella.

Mehran Kamrava, a professor of Middle Eastern politics at Georgetown University in Qatar, said: “The US will continue to remain the dominant power globally, but what it has shown in the Gulf is they cannot rely on the US solely for their security.

“It will accelerate their push to diversify their security partners and strategic reliances.”

The rifts are already evident. The United Arab Emirates is deepening its ties with Israel and India, while Saudi Arabia is forging a new security axis with Pakistan, Turkey and Egypt.

Israel’s uncertain path forward

The news of the agreement to end the fighting “on all fronts” was greeted with anger and dismay in Israel. With Israeli forces still deployed in Lebanon, Gaza, the West Bank and Syria, it has left America’s key ally uncertain of the path forward.

In the eyes of many Americans who disapprove of the conflict, Benjamin Netanyahu pushed their president into a misguided war, accelerating the fraying support for Israel inside the US, a process that began with Gaza.

For some in the administration, the Israeli prime minister is the scapegoat for unfulfilled war objectives.

Mr Trump’s relationship with Benjamin Netanyahu has become strained

JD Vance, the US vice-president and a staunch sceptic on foreign intervention, publicly acknowledged the strain on relations, accusing Mr Netanyahu of “getting some things wrong”.

In April, Joe Kent resigned as director of the US national counter-terrorism centre in protest against the war, accusing Israel of dragging the US into a “war of choice” and manipulating Mr Trump into joining in the first place.

Prof Kamrava said the damage to US-Israeli relations is not irreparable, but in the short term hinges on the personal relationship between Mr Trump and Mr Netanyahu.

“Trump feels in many ways misled by faulty or false intelligence of Israel. For Netanyahu, who has legal and political problems, this war with Iran was a lifeline, but he has emerged in a much weaker position as he enters his own electoral campaign.”

Mr Netanyahu, the longest-serving prime minister in Israel’s history, is seeking another term in the elections scheduled for later this year, with his political rivals using the MoU as a stick to beat him with before October’s vote.

An unpopular war

At home, a war with Iran was never popular.

Polls conducted in the first week of February showed that nearly half of Americans opposed an attack on Iran. By May, after two months of war, disapproval had risen sharply to 58 per cent.

During the most active stages of the conflict, it was estimated to be costing taxpayers an average of $2bn (£1.5bn) a day.

Announcing the “historic peace agreement” on Sunday, a White House spokesman said it would end “decades of hostility” and bring “stability to one of the world’s most volatile regions”.

But Americans won’t feel the relief of this “historic” moment for months to come. Oil prices have begun to fall, but fuel and food prices are expected to remain high for some time – long enough for a disgruntled electorate to damage the Republican Party in the midterms and perhaps see Mr Trump lose control of Congress.

He will have a hard time persuading voters the war was worth ongoing pain and is not another American military misadventure.

Mr Trump continues to insist that his deal is better than the one Barack Obama signed with Iran to limit its nuclear programme and missile capacity. Experts disagree.

“The US lost on virtually every point,” he tweeted in 2015. “We just don’t win anymore!”

A member of the Iranian security forces stands in front of a banner honouring Iran’s slain supreme leader Ayatollah Ali Khamenei Credit: Atta Kenare/AFP

The words are now coming back to haunt him, and are likely to be played again and again by Democrat campaigners ahead of the midterms.

Iranian citizens, too, have lost trust in Mr Trump. He told some 93 million of them that “help is on its way” as they took to the streets last winter to protest against the regime and were killed in their thousands.

The Iranian diaspora were purportedly dancing in the streets following the killing of Ali Khamenei. But now the mood has shifted.

Mr Trump’s attempt to foment a rebellion failed. So did his military action. His credibility has been eroded not only on the geopolitical stage, but among ordinary people worldwide, some of whom had been desperately hoping for a way out of living in an oppressive regime.

“If you look at the many examples of history, the US has only tried to answer its national security interests through military force,” Sanam Vakil, director of the Middle East and North Africa Programme at Chatham House, said.

“Time and time again, the US has not thought about the people on the ground of its conflicts,” said Dr Vakil, “and this has come at a catastrophic cost for the Iranian people.”