The oil market is not pricing in war escalation, with oil trading at $73 despite tanker collisions and US military asset movements, indicating markets don’t believe war is imminent.
Iran’s war is being stress-tested by the world to see if the regime can stand on its own before resuming business, with China likely helping Iran substantially to weaken the West and postpone direct conflict over Taiwan.
The US is short on military supplies for Ukraine, with Russia reportedly building more munitions in 3 months than all of NATO combined in a year, potentially weakening Ukraine in a war of attrition.
Iran’s hypersonic missiles are unpredictable and can penetrate Israel’s air defense systems, potentially leading to a war of attrition that Israel may not be able to win.
The US military budget is huge, but the US currently lacks hypersonic missiles, which are possessed by Iran, Russia, and China.
The strait of Hormuz is a critical energy pinch point where 20% of the world’s oil and all of Qatar’s natural gas exports flow through, with potential closure leading to significant oil price spikes.
OPEC production increases may have been a planned move to mitigate war risk and reduce oil price volatility, with Saudi Arabia preemptively increasing production.
Arab countries including Saudi Arabia, Qatar, UAE, and Egypt are currently neutral in the Iran-Israel conflict but may be drawn in if the war escalates.
The US no longer has the pull to change the fate of conflicts like the Iran-Israel war, with its grip on global events slowly fading away.
The destruction of energy infrastructure is a war crime, and Iran’s potential exploitation of vulnerabilities in Israel’s energy systems could lead to significant civilian casualties and damage.
The US economy is likely to stall due to tariff consequences, leading to a debt trap and bond yields spiraling higher, weakening the dollar and impacting financial instruments.
With 80% of salaried workers living paycheck to paycheck and official statistics being false, the US economy is heading “down the tubes” due to tariffs and consumer sentiment uncertainties.
The dollar index has topped and is in a bad position, with a break below 98 indicating the end of a multi-decade uptrend, leading to increased volatility and a weak dollar.
Gold prices are expected to rise significantly as the dollar falls and bond yields rise, driven by foreign interest in gold as a safe-haven asset in a weak dollar environment.
Silver prices are projected to surge above $50 in the next 3-5 months, breaking out of a year-long channel due to liberation from China’s suppression and the falling gold/silver ratio.
The gold/silver ratio is expected to fall significantly from its current high level of 93, as investors who missed the gold opportunity turn to silver due to its lower price.
The Bloomberg commodity index is depressed at 100 for two years, but upturn metrics indicate a potential surge, with a close above 10650 needed to “blow its lid” again.
Oil is breaking through a two-year floor at $65, with momentum indicating it will explode if it closes above $69 in the next quarter.
The stock market is faking out investors with a delayed correction, making new price highs but not progressing, with leadership fading according to Michael Oliver.
The current credit bubble is a lethal combination with the larger credit bubble and Smooth Holy M2 courtesy of President Trump, leading to severe consequences.
Sudden jolts are expected when the dollar index closes below 9835, the bond market rally fades, and the commodity 3% rally blows out, according to Michael Oliver.
Gold’s 1972 breakout was the greatest of all time, breaking above the Civil War peak after a 110-year base, leading to spectacular new all-time highs with only one crash in the middle.
Silver broke out above $3 in 1973, surging to $50 in 7 years, and is projected to break above $50 again within 1-2 years from a 46-47 year base, potentially becoming the second biggest breakout in history.
Current gold and silver markets mirror the early 1970s in terms of breakouts, central bank buying, and a secular bear market in bonds, suggesting massive price increases with significant corrections.
Silver’s only breakout to a new all-time high occurred in 1973, surpassing the Civil War peak of $3, while gold’s breakouts in 1972 and 2005 were extremely significant milestones.
The 1967-68 silver breakout sparked a mania in junior silver stocks, but was overshadowed by the more significant 1973 breakout above $3.
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