I’ll keep this pretty short.
We can expand later if it becomes a real problem in the markets.
Nobody Really Knows
For reference, we’re talking about the current conflict between Israel and Iran.
I really have not been paying close attention to this, and I will talk about why shortly, so take my information with a large grain of salt.
Just over a week ago, Iran sent over 300 suicide drones to Israel in an attempt to attack them.
Israel’s missile defense system prevented all but one or two of them. But now Iran knows where those missile defense systems are.
Interesting, but significant? Hard to say yet.
US President Biden said publicly the US will not step into an offensive war from Israel.
Q: But what was the US’s role in any or all of this?
A: I could care less, because we’ll never really know.
I’m not being insensitive, but from where I sit as an investor and financial podcaster, it is in my best interest (and yours) to keep this whole conflict at arms-length.
I even had to unfollow some really good accounts on Twitter/X because they were nauseating with the Israel stuff.
You don’t need to convince me who the “right side” is.
I’m old enough to know there’s never a “right” answer with these. Both sides feel like they’re right, and both sides often have a good point, or at least somewhat of a point.
So let’s move on, shall we?
Is This “It”?
The attack happened on a weekend of course, as they always do.
All markets fell, gold dropped for a day, then popped back up to where it was, but all related stocks got hit as investors panicked and moved to, guess where….
Hint: It’s where they always go…..
Fiat. And more specifically the US dollar.
Now I’m old enough to remember the Israel/Palestine attack from ye ‘olde 2023. It also happened on a weekend, October 7th.
Barchart shows the dates nice and clean, so let’s go there and see what happened from the market open on Monday October 9th onward.
Here’s the S&P 500
Small pop, flatlined, dropped, then after October 27th (2 weeks later) it was up only.
What about Bitcoin?
Pretty much up only.
So even though there were talks of “World War 3” back then too, the market didn’t care.
But this time around it did.
Personally, I don’t think it’s going to lead to anything resembling WWIII, at least not for awhile. NFA
But here’s what we know:
- US says at least they won’t get involved, even though they likely are already from afar
- China and Russia don’t seem to be getting involved. Russia pretty much can’t right now.
- War in the US is as unpopular as it’s been in a long time, and Biden has to do everything he possibly can to win this upcoming election. On top of that, Israel does not have a lot of support/sympathy with American citizens, nor does Iran for that matter.
Full-scale war involving US troops, or even a significant amount of tax dollars going towards something already unpopular could very well be the nail in his coffin.
My view has not changed. The US will do everything it can to get Biden reelected, including keeping the markets propped up, and dropping the price of oil.
So any dip should be looked at as opportunity IMO.
I took this opportunity to add onto a couple of crypto positions, as I felt the significance of the drop was highly irrational. See my Twitter profile for more details.
Bear in mind, with crypto especially, it’s not people panic dumping, it’s a lot of algos getting triggered on the way down, which accelerates things more than usual.
This explains why a lot of tokens drop in unison. It’s not like the $MANA token holder community got together and collectively said “This could be WWIII. We need to get ahead of this NOW.”
If I’m wrong, that’s fine, I’m already positioned for something like this.
Stay tuned for this Saturday’s episode of the 10-Minute Contrarian podcast to see exactly how.
— VP