Loading ...Martin Armstrong is reporting that a lot of the buying came from the Middle East and that now that we’re above $1375 hedges are lifting and short-covering is what took gold to $1415.
But it also means that something bigger is brewing in the capital markets that both Iran and Trump understand. And maybe that muted response from oil has more to do with that.
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As Pepe Escobar lays out convincingly in his latest article, Iran’s threats against global oil shipping aren’t aimed at disrupting the global economy per se. There’s plenty of oil stored in Strategic Reserves around the world to keep things operating during any U.S. military operation to destroy Iran’s navy (which wouldn’t take very long) and open the strait to oil traffic.
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It is that a disruption in the price of oil will force the unwinding of trillions in interest rate swap derivatives already at risk because of the tenuous hold on reality Deutsche Bank has, since DB clears a super-majority of all such derivative contracts for the whole of Europe.
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No one wants to see $300 per barrel oil. That Goldman Sachs is posting potential targets of $1000 per barrel tells you where they are positioning themselves, as if they know something? Goldman? Have insider knowledge?
Please! It is to laugh.
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What we are looking at here is the ultimate game of brinkmanship. Trump is saying his maximum pressure campaign will break Iran in the end and if they go one step further (which they won’t directly) he will eliminate them.
Iran, on the other hand, is stating categorically that if Trump doesn’t allow Iran to trade than no one will. And that threat is a real one, given their regional influence. Incalculable financial and political damage can be done by Iran and its proxies around the region through attacks on oil and gas infrastructure.
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What’s important is to know that the rules of the game have changed. Iran has taken all the punches to the nose it will take from Trump without retaliating. When you corner someone and give them no way out you invite the worst kind of counter-attack.
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Governments will fall, markets will collapse. And no one gets out without scars.