U.S. Middle East War… What It Means for The Markets.

From Greg M.

U.S. Middle East War… What It Means for The Markets.

By Gregory Mannarino TradersChoice.net

At 4:00PM EST, immediately after the closing bell at the NY Stock Exchange (as is standard procedure), the US began a heavy military strike against multiple Iranian targets. Large military strikes are almost NEVER done during market hours- do you really think that is just by coincidence?  

I have been warning my audience on YouTube for weeks about how the US strike on Iran would play out. I even nailed the timing of the US strike on Iran almost down to the day, saying it would likely happen this weekend. I also predicted the timing of US strikes on Yemen nearly down to the minute, putting out a video that morning which stated in the title that a US strike on Yemen was Imminent.

This war has absolutely nothing to do with “retaliatory” strikes for US service members who were killed in Jordan, nor any other attacks on US bases in the area. Nor does it have ANYTHING to do with shipping coming under fire in the Red Sea by so called Iranian supported militant groups.

On the 3^rd of January 2024, Iran, which is a founding member of OPEC, joined the BRICS alliance. Iran now aligning themselves along with Saudi Arabia with the BRICS alliance presents a direct threat to the US dollar reserve status- AND THAT IS WHAT THIS WAR IS ABOUT.

The US dollar has remained the world reserve currency only because of one thing. And that is an agreement which exists between the US and OPEC nations which guarantees that the US military will protect and defend the oil belonging to OPEC nations.

Ever wonder why there is a large US military presence in the Middle East? It has NOTHING to do with terrorism or stopping terror, it’s about protecting oil.

Within the agreement between the US and OPEC is an accord from OPEC. This accord states: that in return for US military protection of OPEC oil, they would price their oil in US dollars.

Having OPEC price their oil in US dollars was a MASSIVE win for the Federal Reserve, in that now any nation wishing to purchase oil from OPEC would first have to convert their currency into US dollars to purchase oil. This mechanism in turn creates an ever-expanding demand for more US dollars. However, over the last several years various nations have sidestepped what has become known as the Petrodollar process and have instead been purchasing OPEC oil using their own currency. This therefore has decreased demand for Federal Reserve notes.

From day one, the BRICS alliance has sought to reduce the hegemony of the US dollar on the world stage, which has not gone unnoticed by the Federal Reserve.

What this war is really all about is sending a message to the BRICS alliance, and that message is this: DO NOT THREATEN THE US DOLLAR RESERVE STATUS. A message which is being sent DIRECTLY by the Federal Reserve whose enforcement arm is the US military, including its nuclear arsenal.

The US will never directly or indirectly attack Saudi Arabia, or its interests, so Iran is the target, and the message is clear.

What we can expect from a market standpoint from this war is a drop in US bond yields. This in turn should open a doorway for cash to make its way into the stock market. The initial reaction of the stock market may be a move lower, but by watching bond yields, and I expect that they will drop, that would be a BUY SIGNAL for stocks. Commodities may also take an initial hit on a knee jerk stronger dollar/fear trade- which again may hit stocks initially.

From an economic standpoint, this war which will be protracted, will give a boost to US GDP. This jump in US GDP will be touted as a stronger economy, AND NOT because of the war.