While the details are still very much in flux one thing is certain, President Trump's resolve in asserting America as a force against human atrocities; a resolve absent during the Obama years. As for me, I am proud that America is attacking evil wherever it rears its ugly head.
President Trump is not afraid to defend the innocent and to send a clear signal to the world that the use of WMDs will not be tolerated. This is what the world has expected from America since the end of World War II. The world needs a nation who will draw a line in the sand. We are the only nation who can keep the world safe from tyrants like Bashar al Assad. As the President said, this had to be done if peace and safety have any chance of surviving the future.
To take such actions while hosting the Head of China exhibits that President Trump will not allow pomp or pageantry to keep him from executing the actions that keep America safe. While dining with President Xi, our President was raining Tomahawk Cruise missiles on Syria. I am certain China read that message loud and clear.
I suspect we will see many of our allies – and even hostile nations – respect the actions taken by President Trump. We are already hearing reports of appreciation from other countries. The world is breathing a sigh of relief now that America will be a strong nation with strong leadership once again and not an apologetic nation lead by a weak and feckless leader. We have not seen an executive branch function this well since Reagan.
I also suspect we will see radical Islamic terrorists attacking in all areas they possess assets. They will not accept these actions without retaliation. Don't be surprised when Kim Jung nut job starts threatening to nuke the west coast of America, South Korea and Japan. Cowards hate strength and will respond accordingly.
This action, while welcomed, will be very destabilizing for the world. The financial markets are expressing concern. With Gold spiking on the news, currencies of many nations found pressures to the downside.
The financial markets detest uncertainty. Expect to see huge volatility. Markets always anticipate the future so a drop in the dollar and the DOW is not only anticipated but needed for the long-term future of both.
In times like these, a serious financial safety net of gold is an absolute necessity! It is unwise to allow a portfolio to continue without an insurance policy against the potential changes we will see as the world digests these actions. Yes, the world now understands Trump will be a man of decisive action yet markets will all take various steps in order to protect their own interests. One thing is for sure, tomorrow will never be the same going forward and the safety of personal finances should be a top priority to every American.
I implore our clients in strongest of terms to get positions secured today before the world reacts. Keep in mind, history demonstrates gold always increases in value when uncertainty is present. While many will dither, we now know for certain what America will do when evil runs unchecked.
In watching market response, I highly recommend people keep their eye on the Strait of Hormuz. I have written multiple times about the vulnerability of these narrow shipping lanes which nearly a third of the world’s oil travels. Iran clearly controls the Strait with the island of Abu Musa being equipped with high tech missiles. Abu Musa is the most strategic point in the Persian gulf.
Iran, being a state sponsor of terror and target of Trump, would be well served in shutting the Strait down for some period of time. Iran would be no match for our Navy long-term however short-term disruptions in oil will send prices much higher and take the price of gold with it. More importantly the U.S. dollar and U.S. debt markets could be severely impacted.