Iran Attack Poses First Serious Test for Trump

IMG Auteur
Published : September 16th, 2019
450 words - Reading time : 1 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...
Category : Opinions and Analysis

For a rare change, global markets seem genuinely concerned about the news. A drone attack by Iran over the weekend knocked out more than half of Saudi Arabia’s refining capacity, amounting to roughly five percent of global supply. Fox and other news outlets underplayed the story initially, putting it beneath the latest sex charges against Kavanaugh. But the Saudi story shot up to the top of the page when index futures began to trading Sunday evening and oil prices soared $8 to a high of nearly $63 per barrel. So far, though, traders have gotten it only half-right. Comex gold is up a mere $14 at the moment (see chart above), and S&PS futures are off only 18 points. This suggests that although the threat to the world’s oil supplies is perceived as real, it is not yet considered a full-blown crisis in the trading world.

Shades of Goldfinger?

They’ll wise up soon enough, though, especially if Trump chooses to confront Iran. Until now, the mullahs have confined their attacks to oil tankers bearing the flags of countries unlikely to retaliate. By launching drones (or possibly cruise missiles) on a Saudi facility, they have declared war on a key U.S. ally. Trump has responded by approving the use of America’s emergency oil reserves to dampen any price spike, but it is unclear how he will deal with Iran itself. So far, the President has been all words when handling North Korea, China and Cuba/Venezuela. But none of them has pressed him nearly as aggressively or persistently as Iran. It is one thing for Kim Jong-un to shoot missiles into the air, or even over Seoul, but quite another for Khamenei to actually bomb one of the world’s most important oil facilities.

Some are comparing this to Pearl Harbor, but that was a sneak attack. In this case, Iran’s destructiveness follows an entirely predictable pattern of increasingly menacing actions. One shudders to think of what it will mean if Trump, facing the first serious challenge of his presidency, rises to the occasion. As much could be said if he doesn’t. If all-out war results, it wouldn’t be the first time this happened when neither side wanted it. It’s also possible Iran has taken its inspiration from Auric Goldfinger, the James Bond character who nuked Ft. Knox in order to increase the value of his own bullion.  If so, and assuming the mullahs press no further, the strategy could succeed by drastically repricing oil. In the meantime, the mullahs re denying that they had anything to do with the attack — that it was Yemeni Houthis who did it. If the situation were not so grave, their denials would be laughable.

<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Rick Ackerman is the editor of Rick’s Picks, a daily trading newsletter and intraday advisory packed with detailed strategies, fresh ideas and plain old horse sense.
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Bank of England Warns of an ‘Abrupt’ Financial Collapse Due To Clim...
18 OctThemis1
A cynical attempt on Carney's part to deflect the blame for the coming financial crisis. The central banks must shoulder the majority of the culpa...
Bank of England Warns of an ‘Abrupt’ Financial Collapse Due To Clim...
16 OctS W.0
What a load of nonsense from Carney, Likely there will be a crash but to blame it on the climate is ...nonsense I am wondering if he has re...
A Hard Rain
09 Octcarlomar0
Bravo! The best analysis of what is going on! I read your column faithfully and always find new thoughts and valuable ideas in your writing!
Juniors ? The Butterflies in the Animal Farm of the investing world ?
07 Octstocking up pennies
Very well written article, Alan. It pictures the volatibility of the junior stocks, that are, indeed, mostly comparable to ''social butterflies'' a...
We Are Very Confident In $1,700 Gold Before The Muppets Awaken
08 OctThemis
You are correct regarding spelling but is it necessary to be pedantic about it? Surely the content of the article is more important?
A Hard Rain
08 OctThemis2
I agree with every word. Keep telling it as you see it. People are so close to the issues that they need a commentator like you to stand back and...
We Are Very Confident In $1,700 Gold Before The Muppets Awaken
02 OctLouis Solomons
There is no such word as commentairies.
We Are Very Confident In $1,700 Gold Before The Muppets Awaken
02 OctLouis Solomons
Uncharted and unchartered are different words.
Most commented articlesFavoritesMore...
World PM Newsflow