Geopolitical Backdrop: Panel analyzes the escalating US–Iran conflict, China’s backing of Iran, and the strategic importance of the Strait of Hormuz, arguing markets have not priced a prolonged ground campaign.
Energy Markets: Oil and LNG supply risks highlighted after infrastructure strikes, with Brent and WTI rising; the energy complex remains a core beneficiary amid heightened energy security concerns.
Defense Spending: Expectation of materially higher US defense budgets supports the aerospace & defense sector, though it may worsen deficits, indirectly reinforcing the bullish gold case.
Gold Thesis: Despite short-term volatility, long-term support stems from anti-dollar sentiment, structural US deficits, and fading Fed credibility, with pullbacks viewed as potential accumulation opportunities.
Market Mechanics: Debate over gold’s correlation with equities and retail flows; references to ETFs like GDX and QQQ illustrate positioning dynamics and prior drawdown behavior.
Central Bank Policy: Fed’s reserve management purchases (T-bill buying) suggest tightening is unlikely despite oil-driven inflation fears, a setup seen as constructive for hard assets.
Risks and Scenarios: A beachhead operation or extended conflict could hit equities sharply; inflation vs. growth risks may worsen as private credit stress and a potential AI bubble intersect with war shocks.
Regional Alignments: GCC coordination strengthens, and control of Hormuz is pivotal; any de facto Iranian control could reshape global trade routes and long-term energy pricing power.
Transcript
You think Trump, Donald J. Trump, the taco king, is going to want to go into the history book as the US president that lost the first proxy war between the United States and China? No way, Jose. >> What concerns me is that we cannot leave that strategic strength with Iran as we look for a way out. Hello and welcome to Wealthon and this special report on Iran. I'm Maggie Lake. We have a panel of experts joining us today to discuss the fallout from this military conflict. As always, we are going to try to pull the lens out and focus on the medium to long-term factors that are likely to drive investment decisions. If you are worried about how events may impact your portfolio, you can get a free review with an adviser in our network. Just go to wealthon.comfree. If you want to learn more about the role hard assets can play in making your portfolio more resilient, join our real asset community at wealthon.com/get ready. I hope you find the conversation valuable. Thanks everyone for joining us for our special coverage of the Ian Iran war. I'm pleased to welcome Joe Zach, member of geopolitical intelligence group at Academy Securities, David Woo, CEO of David Woo Unbound. A bit later, we'll be joined by Chris Casey, founder and managing director of Windrock Wealth Management, and Wealthy Trey Rick. Uh Joe and David, thanks so much for the two of you for being here. Joe, let's start with you. I I know it's very hard to know for certain what's going on in terms of talks between the US and Iran. We're all living in this sort of headline driven environment, but what options do you think the Trump administration is weighing right now? >> Well, thank you very much and it's really a pleasure to join you and this distinguished team today. Um, so the options uh first of all I think uh there are negotiations uh of sorts going on. Um it it is uh pretty clear that uh Pakistan, Turkey, Egypt and Oman um are all involved in uh discussions uh both with the United States and with Iran uh to see about possibly a way forward uh on a negotiated settlement. Uh now that doesn't mean that there are direct talks between the United States and Iran. I don't believe that that's uh taking place at this point in time. Uh and it doesn't mean necessarily that um points that the United States is raising um are agreed to um or are in accordance with points that uh Iran may want um to discuss. Uh but the fact that um there is a path for some discussion um was very important uh yesterday in our president being able to um uh postpone at least for uh the time being and it could be for quite a time. um his um comment over the weekend that um should the straight of Hormuz not be opened, uh the uh United States would likely target um Iranian power plants. And that was um not only uh understandably not wellreceived by the Iranian regime um but um I think also um was um very concerning to the um Gulf countries because targeting of um Iranian uh infrastructure, especially uh power infrastructure um could likely uh result in uh Iran lashing out against the Gulf countries and attacking their uh power infrastructure, their desalinization plants, their um oil and energy uh infrastructure. And that could um lead to a level of damage and uh destruction uh throughout the Gulf that could have some profound um impact on those countries um for quite a while in terms of rebuilding and on their uh populace especially if the desalinization plants were hit etc. and um and obviously could have some uh very um consequential macroeconomic uh impact as well. So um the fact that um or or the claim which I think is actually a fact that there is some level of discussion going on is a positive um is positive because it is at least um giving um our administration some breathing space from um carrying out um strikes that might be ultimately from a macro or strategic perspective somewhat counterproductive. >> So, is this a strategy or is this chaos? I think that's what some people are trying to figure out. Is it a strategy to sort of ramp up and escalate and put this hard deadline on and threaten to massively escalate this and then turn around and say that we're talking sort of surprise everyone with that? Do you think it's strategy or do you think that there's confusion? >> Well, I think that there there is some thought behind this. I think that um uh trying to ramp up uh as as you say um you know uh could have led to um some some level of um either um the Iranians backing down a bit with respect to the straight of Hormuz which didn't occur or it might um have led which it possibly could still be in play which we just aren't aware of publicly um for countries allied with the United States to take much more seriously um at least our president's uh claim that they should be playing a much more active role in um the straight of Hermuz and opening it up and and providing support. So there could be a lot going on behind the scenes that a statement uh that was made over the weekend could have um you know jolted people into realizing uh different parties into realizing what the strategic impact of the United States carrying out what it said it would carry out could bring and force different parties in different ways into action. So, so I do think there is some thought in this um and most important will be to see what will be the outcome. Um one way or another this um current conflict is going to have to come to an end and it could come to an end in in a number of ways. Um first of all um at some point the United States um and and hopefully with Israel which is a partner of the United States in this current conflict could simply declare you know its major objectives have been met and what we would like to accomplish um you know and those objectives would be um largely related around the nuclear program uh the ballistic missile program and Iran's ability to invest more in its proxy forces. So, conceptually um that could you could argue has largely been met because there's been a tremendous amount of um um damage done to the Iranian programs on all that uh all those counts to include also its navy and also to its military structure at large, its ability to command and control etc. Um and then um one could couple that with um uh an even intensified sanctions regime. That is if it's a unilateral declaration on the United States's part, then one could say, okay, we've met our military objectives. Now we're going to uh increase economic pressure on the regime. And there could be a lot of partners who would sign up for that um to include in the Gulf and to include um uh in Europe and Asia conceptually. Um and that could be one way out. Another way out could be that there would in fact be some negotiated settlement. At this point in time, I think that um the Iranians are probably not quite there yet. Uh I think that they viewed themselves as having um found the strategic sweet pop sweet spot for what they're doing. That's the straight of Hormuz in their ability to push back against the US. They have limited uh capabilities militarily. But what they're doing with respect to the straight of Hormuz and um also with their ability to hit at Gulf countries in particular is um gives them some leverage. Um and um and and thirdly uh this could continue for some time. Um, there are, I think, uh, several weeks, from what I understand, there are several weeks more worth of targets that the US and Israel could continue to hit short of infrastructure targets that could further degrade their uh, military capabilities. Um, especially on the ballistic missile front, and that is that is a tough one, but that could, you know, as this goes on for several more weeks, could also continue to um, diminish the regime. Um so so the administration does have some options. Um but it strikes me that they may prefer um a a quicker rather than a prolonged resolution of this. >> Yeah. Well, the markets are have been voting with their feet uh you know in terms of what they'd like to see. David, you're based in Israel, which we should point out before we came on in a sign of the situation we're in. You know, had to tell us that if there's an air siren, you're going to have to take uh take cover and shelter. So, uh it's just um you know, these are really tense times. Um and we thank you for joining us under those circumstances. Um from where you sit, what's your assessment of the situation? >> Yeah, I think first of all, I wanted to say a couple of words about Trump's declaration yesterday of talks. I think, you know, the way I think about this is that Trump not only has mastered taco, he's also mastered now fake taco. Okay, what do I mean by fake taco? In every Monday of the last three weeks, Trump's come out to say something to drive up the stock market. And he's saying, "Oh, wow. We're talking that war is about to be over or that things are going extraordinarily well and so on so forth." I think what we need to understand is this. For Trump to keep this war going, he needs to have the cooperation of the stock market. He knows it. If the stock market were to basically go down 20%, his ability to wage war will be over in three days. Okay? So, from that point of view, Trump has to keep jaw-based taco. again he he knows the market will rally on any sign of taco. So he's going to basically pretend he's tacoing to drive up the market so that he can keep going. Now that's the first point I want to basically say. The second point I want to basically say is that right now sure I mean everybody's talking through their back channels. I mean you know Turkey, Pakistan, whatever. But let's put it this way. The leadership has been pretty much wiped out. The guy that they're talking to the skelly skelly buff guy is probably like the least important guy. Okay. in Iran who's still alive. He hasn't been taken out because it's not that important. But rather in Iran, many people suspect him of being the Israeli plant by the way. Okay. And then and then he's been personally involved in many scandals, his family so on so forth. I don't know to what extent that this guy actually represents Iran right now. More likely, I think with the leadership having been taken out, I suspect at this point the IGRC, the revolutionary guards probably is in full control of the situation. you probably have the military that's running things and very likely they're more radicalized than anything else. So I think what we need to understand is this, you know, you know, I think Trump went into this war, you know, thinking that it was going to be over probably two or three weeks. I don't think he thought that this was going to be, you know, because we even know this from the Wall Street Journal article that came out a couple of weeks ago, right? that it was clearly based on an interview with, you know, Pentagon insiders who already realized the war is not going that well and they're trying to essentially disassociate themselves from the decision having gone to war because the the article kept in reminding us that the Pentagon kept telling Trump if you were to go after Iran, they're going to close down a straightfor Okay. And then apparently Trump's answer was I'm not that worried because Trump said they're going to capitulate before they close the straight of Hormuz. So that's why he gave the go ahead to go to war. So what I'm saying to you that Trump obviously went to war thinking the US military is so amazing. They're going to go in there and then they're going to capitulate in two days. I don't think Trump really I don't think Trump is prepared for the fact that now both US aircraft carriers have been repositioned away from Iran. One of them having under coming under basically missile attacks last week and the other one mysteriously caught fire and now is on its way to Greece for repair and that's the most modern the newest US aircraft carrier. I don't think Trump was thinking oh wow the Iranians are going to actually destroy four out of our eight most advanced missiles in the region in the space of 48 hours. So I actually think that Trump in a way I I I I personally think that at the end of this war has gonna be the first one to get fired because I think clearly Trump was not told about like how the risk of this thing in and but I think most importantly I think what Trump is waking up to now more than anything else is that this war in Iran is really the first proxy war between the United States and China. And let me tell you this, the only reason why Iran has managed to stay in this war for as long as they have in for three weeks against the combined military might of the United States and Israel is because they're getting help from the Chinese. And let me tell you this also, it wasn't that obvious two months ago the Chinese were going to step in because until two months ago, the Chinese the Chinese were very reluctant to basically provide Iran with a strategic backs stop. Okay, let me tell you this. That was definitely the case. But after Trump's unilateral action against Venezuela, the Chinese clearly has reassessed, okay, the risk of staying on the sideline. This is the reason why the most important thing we need to understand is that in this war, Iran has migrated from using civilian GPS to now the Chinese BYU satellite navigation system. This is the reason why their drones and missiles are more accurate than they were last June during the 12-day war. This is the reason why their drones and missiles are much harder to jam. There is no doubt that Chinese intelligence and the Russian intelligence is what is keeping Iran in this war. And this also telling you that basically because Iran feels like they're now have they enjoy the backing of Russia and China, which they didn't have last basically June. this what they're going to be much more dug in. They're waiting for the Americans to come. Now for Trump on the other hand, now that China's involved, if this indeed I'm right that this is the first proxy war between US and China, do you think Trump, Donald J. Trump, the taco king, is going to want to go into the history book as the US president that lost the first proxy war between the United States and China? No way, Jose. I'm sorry. Then if you if you think anything else, you don't understand Trump. So my point here is this, okay? Right now there is no tacoing for Trump because if you walk away now Iran is going to control the straight of Hormuz. In other words that Iran will basically massively increase his influence throughout the region. I'm telling you what will happen the day after the Trump tacos now real for real is that all these countries from Saudi Arabia UAE they're all going to be going to China seeking protection that China will immediately replace the US as the security guarantor of the Middle East. And where would that leave Donald J. Trump or the United States for that matter? This is why there's no there's no way out for Trump anymore. I don't whether he knew this or he didn't know this when he gave the decision. There is, you know, there's a very famous Chinese saying once you're writing on the back of a tiger, you can't get off without being eaten by tiger. In fact, this Chinese saying was made famous by Madong to describe the United States when the US committed itself in the Korean War. because he his point he said once the US go into Korea there was no way out anymore without losing credibility. This is this is why my main scenario I don't care what Trump said yesterday and so on and so forth. I think that was I think that his only choice left is basically order an amphibious assault on the Iranian shoreline around Bender Abbas. You know that's what the Marines are there for. I don't know 5,000 Marines will be enough to do the trick. I think would be a very risky operation but I don't see them having much choice because the this is the only way to regain you know basically reopen the straight of Hormuz and I think Trump probably relishes the idea of controlling the straight of Hormus because actually at this point if you ask me any country that gets to control straight up hormuse is going to have massive basically power over everybody else and you know and Trump loves that >> David what you're describing I think is what a lot of you Alice has been calling this era of might makes right. Right. We we're sort of taking off the facade of the it's whatever global order was there before and it's whoever punches hardest kind of wins. Joe, I'm curious about that. Do you think it is or or your your feeling about that? Do you think it is inevitable that we see American boots, American troops deployed on the ground? Are we moving in that direction? And and how does that change things? Well, it's going to be a very uh tough decision for sure um for a whole host of reasons. Um first of all, I think that moving boots on the ground really goes contrary to what um the Republican base and many in the Republican party um see seemed willing to accept. So, you know, um it'll have to be thought through, I would imagine, from a political perspective, although that's not not my area of expertise. I don't don't domestic politics. And um but then the question becomes um how costly is it going to be? Because I think as David said, you know, is are 5,000 Marines enough? And even if they can um initially um accomplish their goals from a short-term perspective, you know, they can quickly find themselves as sitting ducks or as um as um targets for attack. um especially if they if they hold territory and then that can lead to escalation and and more troops and and those that's you know how you get stuck in a situation for a long period of time. Um so so I would imagine that the administration is thinking through all of that. I don't think that there is much doubt that um initially the Marines or whomever else might be brought in uh for such a mission can accomplish what they want to do um you know relatively quickly but um and then what and it's and then what that I think becomes uh problematic on a number of fronts and really leads one to think how much of an investment are you going to make in this but I think that one thing which is extremely important in what David said is you know the whole issue of control of the straight of Hormuz you know if at the end of this uh Iran basically is going to be able to to levy some kind of um you know criteria for the free passage of um shipping uh through the straight of Hormuz be it a toll be it a um loyalty you know, are you affiliated with China or affiliated with the West or are you, you know, all of this um is very problematic and that strategically I think leaves the United States um worse off than prior to this conflict. So that I do believe needs to be addressed and addressed um head on. Um, and and this is, as I said at the beginning, Iran, the Iranian regime clearly understands that the straight of Hermuz is its strategic sweet spot. That's where they have the leverage in in this uh situation. >> I want to bring uh Chris and Trey into the conversation as well. Uh and and the reason we're talking about all of this, of course, is because we're trying to gauge the sort of risk profile for markets, right? and and what's priced in, what's not. Um, and it's hard in in a sort of fast-moving situation. David, do you think that the situation we're describing, which if I hear both of you correctly, is sort of the US has no choice but to see this through uh and to to gain control of the street? Anything short of that would be a would be an abject failure and and costly. So kind of no matter what uh the dye is cast, is that priced into the market? Is a prolonged boots on the ground intensifying military campaign priced into markets right now? >> I definitely not. I mean I I think you know it's actually very interesting because I think you know I you know listen at this point we know about 10 US soldiers have already died, 400 been injured and so on so forth. But that's not like on CNN in your face. I'm telling you when the Marines are storming the beaches a bend or a boss if the first 25 Marines that get killed on that beach I'm telling you S&P is going to go down 10%. Only because at that moment I think the market will wake up to the realization now there's no way for the US to disengage. There's no way for Trump to tackle because right now the market keeps pricing this premium of taco thinking Trump's going to taco taco taco. I'm telling you he's he's not going to tackle for lots of different reason. I want to just come back to Joe's point earlier. There's another reason why politically he's not going to tackle either because let's let's be honest. I mean, if the Republicans stand even like a 5% chance ahead of the midterm election, retaining the majority in the House, I would argue Trump might still get taco. But at this point, let's remember, 20 out of the last 22 midterm elections, the president's party has lost seats in the House. Right now, they have a three seat majority. The president's approval rating is at 40 points which is 20 points behind that of Bill Clinton and George W. Bush the two president under whom basically the the party actually picked up seats in the midterm. So even for Trump especially after the Supreme Court shut down his basically his tariff. I think even Trump understands at this point the midterm is lost. And I think you know history tells us again and again the last 50 years when the president of the United States become a lame duck whether it was Richard Nixon whether it was Bill Clinton Obama their focus shifts away from domestic policies and politics to foreign policies and their legacy. And I think for Donald Trump there is no issue more closer to his legacy than Iran. He walked away from the Iran deal in his first term. He reimposed massive sanctions on Iran. If he walks away now, I'm telling you, as Joe said, he might as well the US would have been clearly better off had he not gone in in the first place because now Iran is basically going to take over. So from that point of view, Trump is in a tight tighter spot than he's ever been during his first two terms. And I think the market is still thinking, oh wow, this guy's going to walk away, whatever it is. No, I'm sorry. He cannot walk away because this guy will go into the history book as the biggest fool if he walks away now. >> Yeah. And and by the way, there are some who argue, I know because of the kind of chaotic nature, but there are some who argue um there is a plan. you may not like the plan and this is this is a long game to kind of establish America and that um even though Donald Trump seems like he's eager for deals all the time, he's actually the one person who might be willing to sort of take the political heat. That's just an argument, but it's it it you can tell whenever we're talking about this, everyone the thing that makes it hard is everyone's personal feelings get wrapped up in in trying to game this out. Uh Trey, uh so if if this is uh potentially going to escalate and and uh turn into, you know, an even more serious conflict with more damages to infrastructure, with more of the disruption to the economic economy, you would think people would be storming into gold and it's going down. What What's happening? This is one of the questions we get the most. It's causing so much confusion. What's going on? Why are we seeing precious metals that should be a safe haven um act the way they're acting right now? What are you hearing? >> Uh well, first of all, as a gold guy, it's it's I don't have as many things to analyze as the first two speakers and and even Chris because uh you know, I'm I I focus on a pretty narrow uh set of variables. Having said that, having followed precious metals for a quarter century now, I will tell you that geopolitical events uh among the top 10 uh investment cues to buy gold have always been my least favorite. So, you know, over the course of history, um geopolitical events to me as a gold guy are disappointing because it brings in a whole group of short-term traders. And I know from prior experience, they're going to lose interest and and we're going to have to get them out. So on just like if we go back to things like the Greek, you know, bond uh suare, it's like a six months delay. So he brings in people, you have to wait six months to get them out. The first time the geopolitical uh selloff didn't occur was in late 2024 and October with October 7th in Israel and gold stocks for example didn't follow gold up in October because everybody expected that geopolitical uh selloff but you know everyone can see that upper 2000 area to where we've gone. It was the first time you haven't had that geopolitical selloff in a long time. this particular situation uh I think is fair to say is at the very very top rung of geopolitical uh hurdles right this this could be a completely uh destabilizing situation with respect to gold and just give me a little bit of time to set this up so gold is responding to what I think are the big three fundamentals that I've followed for 20 years and that's anti-doll sentiment the US deficit and fading Fed credibility. So for 20 years I've followed those three fundamentals and gold has done what it's done from say 250 to 4,000. But clearly in late 24 and in 2025, those three variables that I think all of us on this have followed really hit inflection points where they really matter uh in terms of the deficit normalizing emergency spending and non-emergency times, the anti-doll sentiment following the freezing of Russian FX reserves, central bank buying. And I've never been a huge fan of Fed credibility, but I think in 2021, uh, that decision to do 120 billion of QE with GDP at 6% uh CPI already going from 5 to 7 and unemployment down will go as one of the worst uh Fed policy decisions in history. So, I don't think Fed credibility could get much lower. But all of those things have come together in um in 2025 because of that. Uh if we go back to just the end of January, gold was up 65% last year, silver 145. Those were obviously much better than anybody expected. In January, gold was up another 30% in the month. And in the month, silver was up another 70%. So just in the month of January. So you had you know 24 they were strong 25 we took off. January was clearly sort of a blowoff top. Now why do I bring that up? Well, obviously the debate in the last day of January, the first day of February, from peak to trough, gold fell 21% and silver from top tick to bottom tick 41% and the press was ablaze with the end of of you know the precious metal bull market, which is fine. My point here is that by the end of February, actually March 2nd, gold had recovered to 5400. So March 2nd versus January 29th, which we all know was a blowoff top, was a h 100red bucks. It was up to 5,400. And silver didn't quite regain the 121 of end of January, but it did get to 103. So as recently, uh we're still on March 24th, just looked at my calendar on March 3rd, um you know, gold was 5,400, silver was 103. So obviously this geopolitical event um has completely you know taken over thinking about gold and I the other problem with talking about gold is there's no other asset class that has as many different investment cues. In other words, people buy and sell gold on any given day for 10 reasons that offset each other. So without going through all of them, I would just reduce things that since the Iranian conflict broke out, what have been the base um conclusions in the market? Oil prices have gone up a lot, right? And they seem to be and this really was emphasized on the uh Iranian missile that hit the Qatari NNG facility that provides 20% of the world's LNG and that damage part of it could be as long as 5 years. So on that day which was you know last week on Monday I think the market got over any hopes for a quick uh resolution in energy markets even if the Iranian conflict is resolved quickly. So we sort of flipped the switch there. So now we have uh brand like at 111 WTI at 99. Well what's the natural conclusion in the market? We're going to have an inflationary outbreak. So, oil prices up, inflation expectations up, and then here's where I think people are making a mistake in the short run. Just in the last week, expectations for BOE tightening to fight this inflationary outbreak on the back of rising oil prices has priced in 40 basis points of BOE tightening in 2026 and 50 basis points of ECB tightening in 2026. And on the Fed side, the 50 basis points of expected easing has evaporated. So now we have an ABC rising oil prices, rising inflation expectations, central bank tightening. And I think that's where the mistake is because given current debt levels, the things that we've all studied for 20 years and given oil at 100 and malinvestment and shaky credits, uh there is absolutely no chance the Fed's next move is going to be tightening. And I think the proof of that is that as recently as December, the Fed had to develop a new liquidity program which they're calling reserve management purchases RMPs of 40 billion of Treasury bills per month. And just before the call, >> QE by by another name, I suppose >> I just checked it before the call. 160 billion is what the Fed's balance sheet is up since December. It's all on the the Treasury bill line. So, I would ask everyone on the call, if the Fed's buying 40 billion of Treasury bills monthly to protect short-term liquidity, are they really going to start raising rates at the same time? And I think the answer to that is absolutely not. So, >> so you see you see the gold the gold case still, you know, the the arguments for higher gold in place, but we've got to get through this geopolitical first. Chris, what I mean ba, you know, based on everything we're talking about, I can only imagine what your clients are are, you know, calling up and um and worrying about. I mean, there it's kind of been the everything selloff, right? There haven't been a lot of places to hide. What are you hearing and what are you telling people who are concerned about this? >> Well, there may not be a lot of places to hide, but there's also not a lot of places that I see opportunity right now. the things that that have done well. Look at defense. Look at the energy complex as a whole. These were things you probably should have been in well before this Iran conflict for various reasons. Energy being uh AI. Uh even the leadup to Venezuela was a clear key that maybe you should be looking at the energy sector. So there's a lot of things that people should have already be positioned in. I think investors right now the biggest thing they should keep in mind is not so much what they should be doing as far as this particular sector or that particular asset class but rather really trying to keep their emotions in check and just review your portfolio you know a sober basis you know look at it methodically and give some real thought long-term thought react to the latest news because there's a lot of news there's a lot of false news there's a lot of rumors there's you know especially Now, people may I don't think people have necessarily panicked yet, but they may when the markets start going down or there's more intense conflict, armed conflict within the Iran uh region. So, I think the biggest thing is just keep your emotions in check and opportunities will develop. >> Yeah. Um Joe, what do we need to look for in terms of relations in the region? Do you think the US is trying to um get other Gulf nations? you mentioned this earlier to to sort of join it in some sort of alliance. Does that seem realistic based on what we're seeing now? What should we what cues should we be looking for there? >> Yeah. Well, I think one thing which is is positive on this is that I think that the um Gulf countries, you know, and they're not always aligned on on all issues. That's for sure. Um I think that they um they have become uh much closer uh especially if you look at maybe Saudi Arabia and the UAE um but all the countries in the region right now um are are really trying to help one another out in many ways in dealing with um the threat that they're all um facing um and have had to deal with uh from Iran. And I think that's that's a positive uh development. Um especially when you think right before this there was quite a bit of tension um related to Yemen uh between Saudi Arabia and the UAE. And I think right now um the level of coordination and discussion and and um support that is going on between the uh GCC countries is a positive thing. I think that um that they uh are not going to forget anytime soon um what um Iran has uh has done u to them. Um and so that would I think provide the United States with some points of leverage in terms of any uh followon that um that the US is looking um to to impose as part of a a resolution of this uh conflict. Um and and I think that they will also be very um I I would think take a very hard position on ensuring that the straight of Hormuz does not become de facto um Iranian controlled. Um uh that I think would be unacceptable to them and I think that they would um push for the United States to take a um a hard line on that. Um on that >> David are if if if this is has more chapters to play out are you more more worried about inflation or growth at this point? Uh you know we've heard we saw uh Russia banning exports of ammonium nitrate we know this is not just about oil. This is such a choke point for so many critical minerals. Asia, a big importer of energy, uh, and I think a lot of concerns about what this is going to do to that region in terms of growth. Where where are you most concerned? >> Yeah, I I think I think you're asking exactly the right question. I mean, I think until now, I mean, three weeks into this war, the market sees this war largely as an inflation risk as opposed to a growth risk. I mean, this isn't the reason why bond yields are up and stocks have been incredibly irresillient, right? The market is basically saying, you know, the economy will be okay, but we're going to end up with high inflation. So, you know, the Fed could actually, you know, hike rates, certainly delay. I mean, this is also the reason why gold has done quite poorly, I would say. But, but I do think that, you know, obviously clearly the longer this thing drags out, the bigger is going to be the shock to growth. I mean, there it is just no question about it. And by the way, I want to say this. You know, on its own, this war may not bring about a recession, but together with, you know, what's going on with private credit, what's going on with the AI bubble, I think you've got three major risk that are about to essentially collide into each other. And I think that's the biggest downside risk to I think to the u to to the growth outlook. And I think from that point of view, I mean, you know, I I just want to sort of give give my own view about goal. What's what's wrong with gold? I'd be interesting to hear what Trey, if you think that what I'm saying makes any sense. I mean, if you look at if you look back in 2025, for example, as you said, you know, gold went up 60%. But guess what? It certainly had nothing to do with the dollar because the dollar was down only small. It certainly had nothing to do with interest rate because real rates actually went up a bit over the course of 2025. It's certainly nothing to do with, you know, you know, you know, oil because oil actually went went down a lot last year. It has certainly to do with safe haven because Bitcoin collapsed last year. So basically everything that could have explained goes 60% surge last year went the other way except for one thing. You know, as you know, I I don't even want to say there's a 25 year 60 year whatever how many years you've been looking at gold. The the most fundamental structural break in gold in terms of its relationship with other markets happened over the last four years which is the relationship between gold and the stock market. In the past, gold did well when the stock market was going down because gold was supposedly a safe haven. Over the last, you know, few years, especially over the past year, stocks up, gold up, stocks down, gold down. So gold is no longer a safe haven. And let me tell you why that's the case. Because I think this tells us a lot about the increased participation of relatively not very informed retail investors in the global financial markets. Because retail investors, guess what? They buy gold and they buy stocks and that's it. When the stock market's going up, they feel wealthier. So they buy more gold. So this is the reason why gold and basically stocks been trading with a positive correlation. So are we that surprised all of a sudden now that stocks going down, retail investors are basically getting kind of weary about their money. They're they're buying less gold too. I mean to me what was interesting about Friday last week was the fact that you know retail investors tend to buy on dip at support level and gold crashed down to 50-day moving average. Retail investors were nowhere to be found and then it came back down to 100 day moving average. No retail investors stepped up and then next thing you know we're trading below the 100 day moving average. I think what it tells you right now is retail has lost a lot of money in Bitcoin. retail is now losing their shirts in basically the Magnus 7 in basic QQQ. Now gold is next. So I think you got to look at this, you know, I mean we can sit here and pontificate about geopolitics, gold and that kind of thing. The reality is that retail has been the driver's seat of the gold rally and the stock market rally. And now when the last bastion of you know basically of security has been broken which is the magnificent 7 I think you know they're just going to be running for the hills and at that point they're not even thinking why am I loan gold the first place is it because the credibility the dollar or the fed or whatever it is they're just going to be and I think you know if this war drags on ironically I I want to believe that gold can do miracle but I think you know given the retail investors positioning in gold right now it's difficult for me to see how this thing can play out Well, if this war would basically drag on >> Trey, >> almost everything you said I disagree with. So >> that's why we have panels so that we can discuss. >> Right. If we go back to the I can't I don't know where to start, but let's go back to the S&P >> and like shorten version because I want to hear from Chris on this too. >> So I'll just hit two things. First of all, the gold move in 25 has absolutely nothing to do with retail buying and that's why I brought this up earlier. It's those big three fundamentals. It's global capital trying to get money out of the uh global financial system. If we go back to the S&P thing though, the last three corrections in the S&P were Q4 2018, March of 2020, and the first 11 weeks of 2022. So, I could go through all these numbers, but in the first one, the S&P was down 20, GDX was up 113. In the second one, gold outperformed GDX outperformed the S&P by a 46% differential. And in the first 11 weeks, the differential was 38%. So in the stocks don't go down much anymore because of the Fed, but when they do, gold is the unparalleled portfolio hedge and it's been that way literally for the last three corrections. So I think it'll be the same moving forward. on the retail thing. Um I really do believe that um you know dollar sentiment, the the deficit and the Fed credibility, the reason gold outperformed so much last year was because true global investment grade pools of capital are moving large amounts of money into the safety of go that gold provides from risks in the financial system. So um and with respect to the last year or so um you know I don't I I I actually think that the last thing holding gold back is stocks remaining strong and when I when you get a break in this sort of mag seven thing I think people are going to run to hard assets and that's what's going to take gold to six and 7,000. Uh Chris, you're the closest to retail because you have uh you know um or individual investors at least. Uh I don't know if they exactly qualify as retail, but um what are you hearing from them? I mean, what is the sentiment that you're picking up? >> Well, I'll tell you my personal belief. Gold is a safe haven. It's the ultimate safe haven. Trey's right on that. Um the both Trey and David mentioned a whole bunch of different variables which are commonly cited for why gold may move up or down. But I don't think any of those matter except for one and only one going forward. The only thing that gold should be correlated to is US debt. That's the only thing that matters because when you have 38 trillion in debt, you take in five to six and you spend an extra two, it's baked in the cake. There's no good outcome. The only outcome is they print money. And so therefore, yes, it's an inflation hedge, but not because the CPI is going up, you know, 0.2% some month or not. It's because the debt is signaling that down the road there's going to be massive inflation at some point in time. And that's why I think rates are creeping up, too. I don't think that's a coincidence. So, and as far as gold um not proving itself as a safe haven from this one particular instance, I don't think that's correct. We're not dealing with a science experiment. There's no controls and variables. It's a marketplace. There's a whole bunch of different variables interacting and counteracting at one point in time. Yes, gold has gone down, but but what would it have done otherwise, right? Like maybe it would have gone down more. What it's done is a natural retracement from its extraordinary growth over the last couple years. So I do view it as a safe haven. If and if anyone doesn't have precious metals or doesn't have a proper allocation, I think they should be viewing right now as a great potential buying opportunity to shore up that position. That's that's the way they should be looking at it. >> And by the way, everybody talks about gold going down. It's up for the year. So, if I had told you last year after being up 65% after being up 27% the prior year that gold was going to be up, uh, you probably would have thought that was overly bullish and here we are. We're up. We were up, you know, 300 bucks until yesterday. We've had a little bit of a correction, but even today we're up and everybody acts like gold's in the toilet. Um, but uh appreciate all the insights and David I appreciate you sort of challenging that though because I do think uh we are and as it becomes more popular and we have more of these conversations we're going to see more more participants in we're going to see them in different kinds of vehicles. Um so that the nature of it is changing and so I think we we should expect to see um some different price action on the back of that and maybe more volatility but it's certainly something we'll pull through in conversations as we move forward. Just want to wrap this up because we know there's so many threads to pull on here. You know, we could talk for a long time, but uh Joe, just want to get a sense from you. Um what is what is a risk that you think is unappreciated or underappreciated right now? What are you going to be watching closely for? >> Well, first of all, I thank you for not asking me my opinion about gold. I can see you worriedly sitting there quite worried. But >> the only thing I can say about gold is that about six, seven months ago, I was uh doing some work in Mali and I thought to myself, wow, this is a great time to buy gold and yet I didn't. And uh analys >> analysis paralysis, it happens to all of us. >> So So that's uh that's my story with respect to uh to gold. But um you know with respect to to your question um I think what what worries me is um is how this is going to resolve itself and and um and I think that um strategically it's going to be very important for us the United States to ensure that um that we resolve it in a way that does not leave um Iran in a strategically strengthened position. And by that I say I what I mean is there is no doubt that we have um inflicted tremendous damage on Iran's um ballistic missile capabilities, its military, its navy, its army, its navy, the IRGC, etc. Um but but they have found that they can fight back and that they um aren't crumbling, you know, at um at at first um at at you know the first rounds impacting um and it's not Venezuela. This is an ideologically driven regime um that in many ways is fanatical. It's been responsible for the deaths, the murders of over well over a thousand US citizens, not to mention the murders of tens of thousands of their own citizens and other citizens around the c around the world. Um, so this is this is a tiger um in in many ways and now it's an injured tiger. Uh, and it's an injured tiger that's found some strategic relevance in what it can do to terrorize the Gulf and what it can do um especially to impact uh world trade. Uh and so I think that what um concerns me is that we cannot in my my opinion leave that um strategic strength with Iran. um as we look for a way out, they in my opinion cannot leave this um in a is um strategically uh victorious. Um and how you craft that is going to be um complicated and it's going to take support um from not only our golf partners but our partners in the west. Um and it will have to be very carefully managed because otherwise it's going to change uh the dynamics moving forward of um how we move goods through the Gulf um on how quickly um you know the world economy can be impacted. Um and and that's not the place where I think we want to be. Um so >> finish the job is your briefing report to the uh to the administration. Uh David, I I want to leave you with the last word as someone who's sitting in the region. Um and really kind of the same question and you just brought up some great points, Joe. We now know the nature of warfare's changed. You got some drones and a nimble you can do a lot of damage in a strategic area. Global economic finance and infrastructure is now a legitimate target in war. I mean these are this is a this is what is going to carry forward through this regardless of the outcome I think which is going to worry people from a geopolitical point of view. Uh David, what are you most concerned about? What is the risk you think is underappreciated here? I >> I think you know, listen, I think regardless of the outcome of this war, the biggest winner is going to be, of course, the military industrial complex in the United States. As we all know, this is the single most powerful arm of the United States. It's also the most corrupt. We spend a trillion dollars a year on defense, and we can't even finish Iran in three days. And guess what? At the end of this war, all these people working in the defense industry, they're going to say, "The reason why we couldn't finish Iran in three days was because we're not spending enough on defense." They're now already asking for 200 billion more. Trump, who actually campaigned on cutting back on defense, now wants to go up to 1.5 trillion by 2027. They're talking about going to two trillion by the end of his administration. If you're talking about being bullish gold, that should you be you should be really bullish gold because what is what this war is going to do is going to empower the basically the most irresponsible corrupt part of the US government, which is the military-industrial complex. It's going to help them make the case we now need to spend even more, you know, because if we don't spend more, we're going to be at risk. And unfortunately, Americans don't know any better. They just think that somehow spending more money on arms is going to make the Americans stronger when I think the biggest problem right now in terms of the US China rivalry is the US is actually falling behind in innovation and education. The latest basically you know what higher education used to be the number one asset in United States okay in world university rankings year in year out US was like top top 10 you know seven or eight university the latest basically ranking that came out based on research reports Chinese university now's rank basically have taken over eight out of the top 10 spots in terms of research output that is the problem that we this is why using force the US is trying to use force China is trying to use brain and which one do you think is going to win in the end? To me, it's pretty obvious. If you don't believe that, buy gold. >> Well, that dot dot dot to be continued, I feel, is how we have to lay that because I see Chris and Trey probably wanting to jump in. Um, but we're out of time. I thank all of you for joining us, especially during these challenging times. You gave us terrific insights to carry through the rest of our conversations, and I hope you'll come back again soon. Thanks to all of you. >> Thanks.
Trump's Iran War Just Became a US-China Proxy War
Summary
Transcript
You think Trump, Donald J. Trump, the taco king, is going to want to go into the history book as the US president that lost the first proxy war between the United States and China? No way, Jose. >> What concerns me is that we cannot leave that strategic strength with Iran as we look for a way out. Hello and welcome to Wealthon and this special report on Iran. I'm Maggie Lake. We have a panel of experts joining us today to discuss the fallout from this military conflict. As always, we are going to try to pull the lens out and focus on the medium to long-term factors that are likely to drive investment decisions. If you are worried about how events may impact your portfolio, you can get a free review with an adviser in our network. Just go to wealthon.comfree. If you want to learn more about the role hard assets can play in making your portfolio more resilient, join our real asset community at wealthon.com/get ready. I hope you find the conversation valuable. Thanks everyone for joining us for our special coverage of the Ian Iran war. I'm pleased to welcome Joe Zach, member of geopolitical intelligence group at Academy Securities, David Woo, CEO of David Woo Unbound. A bit later, we'll be joined by Chris Casey, founder and managing director of Windrock Wealth Management, and Wealthy Trey Rick. Uh Joe and David, thanks so much for the two of you for being here. Joe, let's start with you. I I know it's very hard to know for certain what's going on in terms of talks between the US and Iran. We're all living in this sort of headline driven environment, but what options do you think the Trump administration is weighing right now? >> Well, thank you very much and it's really a pleasure to join you and this distinguished team today. Um, so the options uh first of all I think uh there are negotiations uh of sorts going on. Um it it is uh pretty clear that uh Pakistan, Turkey, Egypt and Oman um are all involved in uh discussions uh both with the United States and with Iran uh to see about possibly a way forward uh on a negotiated settlement. Uh now that doesn't mean that there are direct talks between the United States and Iran. I don't believe that that's uh taking place at this point in time. Uh and it doesn't mean necessarily that um points that the United States is raising um are agreed to um or are in accordance with points that uh Iran may want um to discuss. Uh but the fact that um there is a path for some discussion um was very important uh yesterday in our president being able to um uh postpone at least for uh the time being and it could be for quite a time. um his um comment over the weekend that um should the straight of Hormuz not be opened, uh the uh United States would likely target um Iranian power plants. And that was um not only uh understandably not wellreceived by the Iranian regime um but um I think also um was um very concerning to the um Gulf countries because targeting of um Iranian uh infrastructure, especially uh power infrastructure um could likely uh result in uh Iran lashing out against the Gulf countries and attacking their uh power infrastructure, their desalinization plants, their um oil and energy uh infrastructure. And that could um lead to a level of damage and uh destruction uh throughout the Gulf that could have some profound um impact on those countries um for quite a while in terms of rebuilding and on their uh populace especially if the desalinization plants were hit etc. and um and obviously could have some uh very um consequential macroeconomic uh impact as well. So um the fact that um or or the claim which I think is actually a fact that there is some level of discussion going on is a positive um is positive because it is at least um giving um our administration some breathing space from um carrying out um strikes that might be ultimately from a macro or strategic perspective somewhat counterproductive. >> So, is this a strategy or is this chaos? I think that's what some people are trying to figure out. Is it a strategy to sort of ramp up and escalate and put this hard deadline on and threaten to massively escalate this and then turn around and say that we're talking sort of surprise everyone with that? Do you think it's strategy or do you think that there's confusion? >> Well, I think that there there is some thought behind this. I think that um uh trying to ramp up uh as as you say um you know uh could have led to um some some level of um either um the Iranians backing down a bit with respect to the straight of Hormuz which didn't occur or it might um have led which it possibly could still be in play which we just aren't aware of publicly um for countries allied with the United States to take much more seriously um at least our president's uh claim that they should be playing a much more active role in um the straight of Hermuz and opening it up and and providing support. So there could be a lot going on behind the scenes that a statement uh that was made over the weekend could have um you know jolted people into realizing uh different parties into realizing what the strategic impact of the United States carrying out what it said it would carry out could bring and force different parties in different ways into action. So, so I do think there is some thought in this um and most important will be to see what will be the outcome. Um one way or another this um current conflict is going to have to come to an end and it could come to an end in in a number of ways. Um first of all um at some point the United States um and and hopefully with Israel which is a partner of the United States in this current conflict could simply declare you know its major objectives have been met and what we would like to accomplish um you know and those objectives would be um largely related around the nuclear program uh the ballistic missile program and Iran's ability to invest more in its proxy forces. So, conceptually um that could you could argue has largely been met because there's been a tremendous amount of um um damage done to the Iranian programs on all that uh all those counts to include also its navy and also to its military structure at large, its ability to command and control etc. Um and then um one could couple that with um uh an even intensified sanctions regime. That is if it's a unilateral declaration on the United States's part, then one could say, okay, we've met our military objectives. Now we're going to uh increase economic pressure on the regime. And there could be a lot of partners who would sign up for that um to include in the Gulf and to include um uh in Europe and Asia conceptually. Um and that could be one way out. Another way out could be that there would in fact be some negotiated settlement. At this point in time, I think that um the Iranians are probably not quite there yet. Uh I think that they viewed themselves as having um found the strategic sweet pop sweet spot for what they're doing. That's the straight of Hormuz in their ability to push back against the US. They have limited uh capabilities militarily. But what they're doing with respect to the straight of Hormuz and um also with their ability to hit at Gulf countries in particular is um gives them some leverage. Um and um and and thirdly uh this could continue for some time. Um, there are, I think, uh, several weeks, from what I understand, there are several weeks more worth of targets that the US and Israel could continue to hit short of infrastructure targets that could further degrade their uh, military capabilities. Um, especially on the ballistic missile front, and that is that is a tough one, but that could, you know, as this goes on for several more weeks, could also continue to um, diminish the regime. Um so so the administration does have some options. Um but it strikes me that they may prefer um a a quicker rather than a prolonged resolution of this. >> Yeah. Well, the markets are have been voting with their feet uh you know in terms of what they'd like to see. David, you're based in Israel, which we should point out before we came on in a sign of the situation we're in. You know, had to tell us that if there's an air siren, you're going to have to take uh take cover and shelter. So, uh it's just um you know, these are really tense times. Um and we thank you for joining us under those circumstances. Um from where you sit, what's your assessment of the situation? >> Yeah, I think first of all, I wanted to say a couple of words about Trump's declaration yesterday of talks. I think, you know, the way I think about this is that Trump not only has mastered taco, he's also mastered now fake taco. Okay, what do I mean by fake taco? In every Monday of the last three weeks, Trump's come out to say something to drive up the stock market. And he's saying, "Oh, wow. We're talking that war is about to be over or that things are going extraordinarily well and so on so forth." I think what we need to understand is this. For Trump to keep this war going, he needs to have the cooperation of the stock market. He knows it. If the stock market were to basically go down 20%, his ability to wage war will be over in three days. Okay? So, from that point of view, Trump has to keep jaw-based taco. again he he knows the market will rally on any sign of taco. So he's going to basically pretend he's tacoing to drive up the market so that he can keep going. Now that's the first point I want to basically say. The second point I want to basically say is that right now sure I mean everybody's talking through their back channels. I mean you know Turkey, Pakistan, whatever. But let's put it this way. The leadership has been pretty much wiped out. The guy that they're talking to the skelly skelly buff guy is probably like the least important guy. Okay. in Iran who's still alive. He hasn't been taken out because it's not that important. But rather in Iran, many people suspect him of being the Israeli plant by the way. Okay. And then and then he's been personally involved in many scandals, his family so on so forth. I don't know to what extent that this guy actually represents Iran right now. More likely, I think with the leadership having been taken out, I suspect at this point the IGRC, the revolutionary guards probably is in full control of the situation. you probably have the military that's running things and very likely they're more radicalized than anything else. So I think what we need to understand is this, you know, you know, I think Trump went into this war, you know, thinking that it was going to be over probably two or three weeks. I don't think he thought that this was going to be, you know, because we even know this from the Wall Street Journal article that came out a couple of weeks ago, right? that it was clearly based on an interview with, you know, Pentagon insiders who already realized the war is not going that well and they're trying to essentially disassociate themselves from the decision having gone to war because the the article kept in reminding us that the Pentagon kept telling Trump if you were to go after Iran, they're going to close down a straightfor Okay. And then apparently Trump's answer was I'm not that worried because Trump said they're going to capitulate before they close the straight of Hormuz. So that's why he gave the go ahead to go to war. So what I'm saying to you that Trump obviously went to war thinking the US military is so amazing. They're going to go in there and then they're going to capitulate in two days. I don't think Trump really I don't think Trump is prepared for the fact that now both US aircraft carriers have been repositioned away from Iran. One of them having under coming under basically missile attacks last week and the other one mysteriously caught fire and now is on its way to Greece for repair and that's the most modern the newest US aircraft carrier. I don't think Trump was thinking oh wow the Iranians are going to actually destroy four out of our eight most advanced missiles in the region in the space of 48 hours. So I actually think that Trump in a way I I I I personally think that at the end of this war has gonna be the first one to get fired because I think clearly Trump was not told about like how the risk of this thing in and but I think most importantly I think what Trump is waking up to now more than anything else is that this war in Iran is really the first proxy war between the United States and China. And let me tell you this, the only reason why Iran has managed to stay in this war for as long as they have in for three weeks against the combined military might of the United States and Israel is because they're getting help from the Chinese. And let me tell you this also, it wasn't that obvious two months ago the Chinese were going to step in because until two months ago, the Chinese the Chinese were very reluctant to basically provide Iran with a strategic backs stop. Okay, let me tell you this. That was definitely the case. But after Trump's unilateral action against Venezuela, the Chinese clearly has reassessed, okay, the risk of staying on the sideline. This is the reason why the most important thing we need to understand is that in this war, Iran has migrated from using civilian GPS to now the Chinese BYU satellite navigation system. This is the reason why their drones and missiles are more accurate than they were last June during the 12-day war. This is the reason why their drones and missiles are much harder to jam. There is no doubt that Chinese intelligence and the Russian intelligence is what is keeping Iran in this war. And this also telling you that basically because Iran feels like they're now have they enjoy the backing of Russia and China, which they didn't have last basically June. this what they're going to be much more dug in. They're waiting for the Americans to come. Now for Trump on the other hand, now that China's involved, if this indeed I'm right that this is the first proxy war between US and China, do you think Trump, Donald J. Trump, the taco king, is going to want to go into the history book as the US president that lost the first proxy war between the United States and China? No way, Jose. I'm sorry. Then if you if you think anything else, you don't understand Trump. So my point here is this, okay? Right now there is no tacoing for Trump because if you walk away now Iran is going to control the straight of Hormuz. In other words that Iran will basically massively increase his influence throughout the region. I'm telling you what will happen the day after the Trump tacos now real for real is that all these countries from Saudi Arabia UAE they're all going to be going to China seeking protection that China will immediately replace the US as the security guarantor of the Middle East. And where would that leave Donald J. Trump or the United States for that matter? This is why there's no there's no way out for Trump anymore. I don't whether he knew this or he didn't know this when he gave the decision. There is, you know, there's a very famous Chinese saying once you're writing on the back of a tiger, you can't get off without being eaten by tiger. In fact, this Chinese saying was made famous by Madong to describe the United States when the US committed itself in the Korean War. because he his point he said once the US go into Korea there was no way out anymore without losing credibility. This is this is why my main scenario I don't care what Trump said yesterday and so on and so forth. I think that was I think that his only choice left is basically order an amphibious assault on the Iranian shoreline around Bender Abbas. You know that's what the Marines are there for. I don't know 5,000 Marines will be enough to do the trick. I think would be a very risky operation but I don't see them having much choice because the this is the only way to regain you know basically reopen the straight of Hormuz and I think Trump probably relishes the idea of controlling the straight of Hormus because actually at this point if you ask me any country that gets to control straight up hormuse is going to have massive basically power over everybody else and you know and Trump loves that >> David what you're describing I think is what a lot of you Alice has been calling this era of might makes right. Right. We we're sort of taking off the facade of the it's whatever global order was there before and it's whoever punches hardest kind of wins. Joe, I'm curious about that. Do you think it is or or your your feeling about that? Do you think it is inevitable that we see American boots, American troops deployed on the ground? Are we moving in that direction? And and how does that change things? Well, it's going to be a very uh tough decision for sure um for a whole host of reasons. Um first of all, I think that moving boots on the ground really goes contrary to what um the Republican base and many in the Republican party um see seemed willing to accept. So, you know, um it'll have to be thought through, I would imagine, from a political perspective, although that's not not my area of expertise. I don't don't domestic politics. And um but then the question becomes um how costly is it going to be? Because I think as David said, you know, is are 5,000 Marines enough? And even if they can um initially um accomplish their goals from a short-term perspective, you know, they can quickly find themselves as sitting ducks or as um as um targets for attack. um especially if they if they hold territory and then that can lead to escalation and and more troops and and those that's you know how you get stuck in a situation for a long period of time. Um so so I would imagine that the administration is thinking through all of that. I don't think that there is much doubt that um initially the Marines or whomever else might be brought in uh for such a mission can accomplish what they want to do um you know relatively quickly but um and then what and it's and then what that I think becomes uh problematic on a number of fronts and really leads one to think how much of an investment are you going to make in this but I think that one thing which is extremely important in what David said is you know the whole issue of control of the straight of Hormuz you know if at the end of this uh Iran basically is going to be able to to levy some kind of um you know criteria for the free passage of um shipping uh through the straight of Hormuz be it a toll be it a um loyalty you know, are you affiliated with China or affiliated with the West or are you, you know, all of this um is very problematic and that strategically I think leaves the United States um worse off than prior to this conflict. So that I do believe needs to be addressed and addressed um head on. Um, and and this is, as I said at the beginning, Iran, the Iranian regime clearly understands that the straight of Hermuz is its strategic sweet spot. That's where they have the leverage in in this uh situation. >> I want to bring uh Chris and Trey into the conversation as well. Uh and and the reason we're talking about all of this, of course, is because we're trying to gauge the sort of risk profile for markets, right? and and what's priced in, what's not. Um, and it's hard in in a sort of fast-moving situation. David, do you think that the situation we're describing, which if I hear both of you correctly, is sort of the US has no choice but to see this through uh and to to gain control of the street? Anything short of that would be a would be an abject failure and and costly. So kind of no matter what uh the dye is cast, is that priced into the market? Is a prolonged boots on the ground intensifying military campaign priced into markets right now? >> I definitely not. I mean I I think you know it's actually very interesting because I think you know I you know listen at this point we know about 10 US soldiers have already died, 400 been injured and so on so forth. But that's not like on CNN in your face. I'm telling you when the Marines are storming the beaches a bend or a boss if the first 25 Marines that get killed on that beach I'm telling you S&P is going to go down 10%. Only because at that moment I think the market will wake up to the realization now there's no way for the US to disengage. There's no way for Trump to tackle because right now the market keeps pricing this premium of taco thinking Trump's going to taco taco taco. I'm telling you he's he's not going to tackle for lots of different reason. I want to just come back to Joe's point earlier. There's another reason why politically he's not going to tackle either because let's let's be honest. I mean, if the Republicans stand even like a 5% chance ahead of the midterm election, retaining the majority in the House, I would argue Trump might still get taco. But at this point, let's remember, 20 out of the last 22 midterm elections, the president's party has lost seats in the House. Right now, they have a three seat majority. The president's approval rating is at 40 points which is 20 points behind that of Bill Clinton and George W. Bush the two president under whom basically the the party actually picked up seats in the midterm. So even for Trump especially after the Supreme Court shut down his basically his tariff. I think even Trump understands at this point the midterm is lost. And I think you know history tells us again and again the last 50 years when the president of the United States become a lame duck whether it was Richard Nixon whether it was Bill Clinton Obama their focus shifts away from domestic policies and politics to foreign policies and their legacy. And I think for Donald Trump there is no issue more closer to his legacy than Iran. He walked away from the Iran deal in his first term. He reimposed massive sanctions on Iran. If he walks away now, I'm telling you, as Joe said, he might as well the US would have been clearly better off had he not gone in in the first place because now Iran is basically going to take over. So from that point of view, Trump is in a tight tighter spot than he's ever been during his first two terms. And I think the market is still thinking, oh wow, this guy's going to walk away, whatever it is. No, I'm sorry. He cannot walk away because this guy will go into the history book as the biggest fool if he walks away now. >> Yeah. And and by the way, there are some who argue, I know because of the kind of chaotic nature, but there are some who argue um there is a plan. you may not like the plan and this is this is a long game to kind of establish America and that um even though Donald Trump seems like he's eager for deals all the time, he's actually the one person who might be willing to sort of take the political heat. That's just an argument, but it's it it you can tell whenever we're talking about this, everyone the thing that makes it hard is everyone's personal feelings get wrapped up in in trying to game this out. Uh Trey, uh so if if this is uh potentially going to escalate and and uh turn into, you know, an even more serious conflict with more damages to infrastructure, with more of the disruption to the economic economy, you would think people would be storming into gold and it's going down. What What's happening? This is one of the questions we get the most. It's causing so much confusion. What's going on? Why are we seeing precious metals that should be a safe haven um act the way they're acting right now? What are you hearing? >> Uh well, first of all, as a gold guy, it's it's I don't have as many things to analyze as the first two speakers and and even Chris because uh you know, I'm I I focus on a pretty narrow uh set of variables. Having said that, having followed precious metals for a quarter century now, I will tell you that geopolitical events uh among the top 10 uh investment cues to buy gold have always been my least favorite. So, you know, over the course of history, um geopolitical events to me as a gold guy are disappointing because it brings in a whole group of short-term traders. And I know from prior experience, they're going to lose interest and and we're going to have to get them out. So on just like if we go back to things like the Greek, you know, bond uh suare, it's like a six months delay. So he brings in people, you have to wait six months to get them out. The first time the geopolitical uh selloff didn't occur was in late 2024 and October with October 7th in Israel and gold stocks for example didn't follow gold up in October because everybody expected that geopolitical uh selloff but you know everyone can see that upper 2000 area to where we've gone. It was the first time you haven't had that geopolitical selloff in a long time. this particular situation uh I think is fair to say is at the very very top rung of geopolitical uh hurdles right this this could be a completely uh destabilizing situation with respect to gold and just give me a little bit of time to set this up so gold is responding to what I think are the big three fundamentals that I've followed for 20 years and that's anti-doll sentiment the US deficit and fading Fed credibility. So for 20 years I've followed those three fundamentals and gold has done what it's done from say 250 to 4,000. But clearly in late 24 and in 2025, those three variables that I think all of us on this have followed really hit inflection points where they really matter uh in terms of the deficit normalizing emergency spending and non-emergency times, the anti-doll sentiment following the freezing of Russian FX reserves, central bank buying. And I've never been a huge fan of Fed credibility, but I think in 2021, uh, that decision to do 120 billion of QE with GDP at 6% uh CPI already going from 5 to 7 and unemployment down will go as one of the worst uh Fed policy decisions in history. So, I don't think Fed credibility could get much lower. But all of those things have come together in um in 2025 because of that. Uh if we go back to just the end of January, gold was up 65% last year, silver 145. Those were obviously much better than anybody expected. In January, gold was up another 30% in the month. And in the month, silver was up another 70%. So just in the month of January. So you had you know 24 they were strong 25 we took off. January was clearly sort of a blowoff top. Now why do I bring that up? Well, obviously the debate in the last day of January, the first day of February, from peak to trough, gold fell 21% and silver from top tick to bottom tick 41% and the press was ablaze with the end of of you know the precious metal bull market, which is fine. My point here is that by the end of February, actually March 2nd, gold had recovered to 5400. So March 2nd versus January 29th, which we all know was a blowoff top, was a h 100red bucks. It was up to 5,400. And silver didn't quite regain the 121 of end of January, but it did get to 103. So as recently, uh we're still on March 24th, just looked at my calendar on March 3rd, um you know, gold was 5,400, silver was 103. So obviously this geopolitical event um has completely you know taken over thinking about gold and I the other problem with talking about gold is there's no other asset class that has as many different investment cues. In other words, people buy and sell gold on any given day for 10 reasons that offset each other. So without going through all of them, I would just reduce things that since the Iranian conflict broke out, what have been the base um conclusions in the market? Oil prices have gone up a lot, right? And they seem to be and this really was emphasized on the uh Iranian missile that hit the Qatari NNG facility that provides 20% of the world's LNG and that damage part of it could be as long as 5 years. So on that day which was you know last week on Monday I think the market got over any hopes for a quick uh resolution in energy markets even if the Iranian conflict is resolved quickly. So we sort of flipped the switch there. So now we have uh brand like at 111 WTI at 99. Well what's the natural conclusion in the market? We're going to have an inflationary outbreak. So, oil prices up, inflation expectations up, and then here's where I think people are making a mistake in the short run. Just in the last week, expectations for BOE tightening to fight this inflationary outbreak on the back of rising oil prices has priced in 40 basis points of BOE tightening in 2026 and 50 basis points of ECB tightening in 2026. And on the Fed side, the 50 basis points of expected easing has evaporated. So now we have an ABC rising oil prices, rising inflation expectations, central bank tightening. And I think that's where the mistake is because given current debt levels, the things that we've all studied for 20 years and given oil at 100 and malinvestment and shaky credits, uh there is absolutely no chance the Fed's next move is going to be tightening. And I think the proof of that is that as recently as December, the Fed had to develop a new liquidity program which they're calling reserve management purchases RMPs of 40 billion of Treasury bills per month. And just before the call, >> QE by by another name, I suppose >> I just checked it before the call. 160 billion is what the Fed's balance sheet is up since December. It's all on the the Treasury bill line. So, I would ask everyone on the call, if the Fed's buying 40 billion of Treasury bills monthly to protect short-term liquidity, are they really going to start raising rates at the same time? And I think the answer to that is absolutely not. So, >> so you see you see the gold the gold case still, you know, the the arguments for higher gold in place, but we've got to get through this geopolitical first. Chris, what I mean ba, you know, based on everything we're talking about, I can only imagine what your clients are are, you know, calling up and um and worrying about. I mean, there it's kind of been the everything selloff, right? There haven't been a lot of places to hide. What are you hearing and what are you telling people who are concerned about this? >> Well, there may not be a lot of places to hide, but there's also not a lot of places that I see opportunity right now. the things that that have done well. Look at defense. Look at the energy complex as a whole. These were things you probably should have been in well before this Iran conflict for various reasons. Energy being uh AI. Uh even the leadup to Venezuela was a clear key that maybe you should be looking at the energy sector. So there's a lot of things that people should have already be positioned in. I think investors right now the biggest thing they should keep in mind is not so much what they should be doing as far as this particular sector or that particular asset class but rather really trying to keep their emotions in check and just review your portfolio you know a sober basis you know look at it methodically and give some real thought long-term thought react to the latest news because there's a lot of news there's a lot of false news there's a lot of rumors there's you know especially Now, people may I don't think people have necessarily panicked yet, but they may when the markets start going down or there's more intense conflict, armed conflict within the Iran uh region. So, I think the biggest thing is just keep your emotions in check and opportunities will develop. >> Yeah. Um Joe, what do we need to look for in terms of relations in the region? Do you think the US is trying to um get other Gulf nations? you mentioned this earlier to to sort of join it in some sort of alliance. Does that seem realistic based on what we're seeing now? What should we what cues should we be looking for there? >> Yeah. Well, I think one thing which is is positive on this is that I think that the um Gulf countries, you know, and they're not always aligned on on all issues. That's for sure. Um I think that they um they have become uh much closer uh especially if you look at maybe Saudi Arabia and the UAE um but all the countries in the region right now um are are really trying to help one another out in many ways in dealing with um the threat that they're all um facing um and have had to deal with uh from Iran. And I think that's that's a positive uh development. Um especially when you think right before this there was quite a bit of tension um related to Yemen uh between Saudi Arabia and the UAE. And I think right now um the level of coordination and discussion and and um support that is going on between the uh GCC countries is a positive thing. I think that um that they uh are not going to forget anytime soon um what um Iran has uh has done u to them. Um and so that would I think provide the United States with some points of leverage in terms of any uh followon that um that the US is looking um to to impose as part of a a resolution of this uh conflict. Um and and I think that they will also be very um I I would think take a very hard position on ensuring that the straight of Hormuz does not become de facto um Iranian controlled. Um uh that I think would be unacceptable to them and I think that they would um push for the United States to take a um a hard line on that. Um on that >> David are if if if this is has more chapters to play out are you more more worried about inflation or growth at this point? Uh you know we've heard we saw uh Russia banning exports of ammonium nitrate we know this is not just about oil. This is such a choke point for so many critical minerals. Asia, a big importer of energy, uh, and I think a lot of concerns about what this is going to do to that region in terms of growth. Where where are you most concerned? >> Yeah, I I think I think you're asking exactly the right question. I mean, I think until now, I mean, three weeks into this war, the market sees this war largely as an inflation risk as opposed to a growth risk. I mean, this isn't the reason why bond yields are up and stocks have been incredibly irresillient, right? The market is basically saying, you know, the economy will be okay, but we're going to end up with high inflation. So, you know, the Fed could actually, you know, hike rates, certainly delay. I mean, this is also the reason why gold has done quite poorly, I would say. But, but I do think that, you know, obviously clearly the longer this thing drags out, the bigger is going to be the shock to growth. I mean, there it is just no question about it. And by the way, I want to say this. You know, on its own, this war may not bring about a recession, but together with, you know, what's going on with private credit, what's going on with the AI bubble, I think you've got three major risk that are about to essentially collide into each other. And I think that's the biggest downside risk to I think to the u to to the growth outlook. And I think from that point of view, I mean, you know, I I just want to sort of give give my own view about goal. What's what's wrong with gold? I'd be interesting to hear what Trey, if you think that what I'm saying makes any sense. I mean, if you look at if you look back in 2025, for example, as you said, you know, gold went up 60%. But guess what? It certainly had nothing to do with the dollar because the dollar was down only small. It certainly had nothing to do with interest rate because real rates actually went up a bit over the course of 2025. It's certainly nothing to do with, you know, you know, you know, oil because oil actually went went down a lot last year. It has certainly to do with safe haven because Bitcoin collapsed last year. So basically everything that could have explained goes 60% surge last year went the other way except for one thing. You know, as you know, I I don't even want to say there's a 25 year 60 year whatever how many years you've been looking at gold. The the most fundamental structural break in gold in terms of its relationship with other markets happened over the last four years which is the relationship between gold and the stock market. In the past, gold did well when the stock market was going down because gold was supposedly a safe haven. Over the last, you know, few years, especially over the past year, stocks up, gold up, stocks down, gold down. So gold is no longer a safe haven. And let me tell you why that's the case. Because I think this tells us a lot about the increased participation of relatively not very informed retail investors in the global financial markets. Because retail investors, guess what? They buy gold and they buy stocks and that's it. When the stock market's going up, they feel wealthier. So they buy more gold. So this is the reason why gold and basically stocks been trading with a positive correlation. So are we that surprised all of a sudden now that stocks going down, retail investors are basically getting kind of weary about their money. They're they're buying less gold too. I mean to me what was interesting about Friday last week was the fact that you know retail investors tend to buy on dip at support level and gold crashed down to 50-day moving average. Retail investors were nowhere to be found and then it came back down to 100 day moving average. No retail investors stepped up and then next thing you know we're trading below the 100 day moving average. I think what it tells you right now is retail has lost a lot of money in Bitcoin. retail is now losing their shirts in basically the Magnus 7 in basic QQQ. Now gold is next. So I think you got to look at this, you know, I mean we can sit here and pontificate about geopolitics, gold and that kind of thing. The reality is that retail has been the driver's seat of the gold rally and the stock market rally. And now when the last bastion of you know basically of security has been broken which is the magnificent 7 I think you know they're just going to be running for the hills and at that point they're not even thinking why am I loan gold the first place is it because the credibility the dollar or the fed or whatever it is they're just going to be and I think you know if this war drags on ironically I I want to believe that gold can do miracle but I think you know given the retail investors positioning in gold right now it's difficult for me to see how this thing can play out Well, if this war would basically drag on >> Trey, >> almost everything you said I disagree with. So >> that's why we have panels so that we can discuss. >> Right. If we go back to the I can't I don't know where to start, but let's go back to the S&P >> and like shorten version because I want to hear from Chris on this too. >> So I'll just hit two things. First of all, the gold move in 25 has absolutely nothing to do with retail buying and that's why I brought this up earlier. It's those big three fundamentals. It's global capital trying to get money out of the uh global financial system. If we go back to the S&P thing though, the last three corrections in the S&P were Q4 2018, March of 2020, and the first 11 weeks of 2022. So, I could go through all these numbers, but in the first one, the S&P was down 20, GDX was up 113. In the second one, gold outperformed GDX outperformed the S&P by a 46% differential. And in the first 11 weeks, the differential was 38%. So in the stocks don't go down much anymore because of the Fed, but when they do, gold is the unparalleled portfolio hedge and it's been that way literally for the last three corrections. So I think it'll be the same moving forward. on the retail thing. Um I really do believe that um you know dollar sentiment, the the deficit and the Fed credibility, the reason gold outperformed so much last year was because true global investment grade pools of capital are moving large amounts of money into the safety of go that gold provides from risks in the financial system. So um and with respect to the last year or so um you know I don't I I I actually think that the last thing holding gold back is stocks remaining strong and when I when you get a break in this sort of mag seven thing I think people are going to run to hard assets and that's what's going to take gold to six and 7,000. Uh Chris, you're the closest to retail because you have uh you know um or individual investors at least. Uh I don't know if they exactly qualify as retail, but um what are you hearing from them? I mean, what is the sentiment that you're picking up? >> Well, I'll tell you my personal belief. Gold is a safe haven. It's the ultimate safe haven. Trey's right on that. Um the both Trey and David mentioned a whole bunch of different variables which are commonly cited for why gold may move up or down. But I don't think any of those matter except for one and only one going forward. The only thing that gold should be correlated to is US debt. That's the only thing that matters because when you have 38 trillion in debt, you take in five to six and you spend an extra two, it's baked in the cake. There's no good outcome. The only outcome is they print money. And so therefore, yes, it's an inflation hedge, but not because the CPI is going up, you know, 0.2% some month or not. It's because the debt is signaling that down the road there's going to be massive inflation at some point in time. And that's why I think rates are creeping up, too. I don't think that's a coincidence. So, and as far as gold um not proving itself as a safe haven from this one particular instance, I don't think that's correct. We're not dealing with a science experiment. There's no controls and variables. It's a marketplace. There's a whole bunch of different variables interacting and counteracting at one point in time. Yes, gold has gone down, but but what would it have done otherwise, right? Like maybe it would have gone down more. What it's done is a natural retracement from its extraordinary growth over the last couple years. So I do view it as a safe haven. If and if anyone doesn't have precious metals or doesn't have a proper allocation, I think they should be viewing right now as a great potential buying opportunity to shore up that position. That's that's the way they should be looking at it. >> And by the way, everybody talks about gold going down. It's up for the year. So, if I had told you last year after being up 65% after being up 27% the prior year that gold was going to be up, uh, you probably would have thought that was overly bullish and here we are. We're up. We were up, you know, 300 bucks until yesterday. We've had a little bit of a correction, but even today we're up and everybody acts like gold's in the toilet. Um, but uh appreciate all the insights and David I appreciate you sort of challenging that though because I do think uh we are and as it becomes more popular and we have more of these conversations we're going to see more more participants in we're going to see them in different kinds of vehicles. Um so that the nature of it is changing and so I think we we should expect to see um some different price action on the back of that and maybe more volatility but it's certainly something we'll pull through in conversations as we move forward. Just want to wrap this up because we know there's so many threads to pull on here. You know, we could talk for a long time, but uh Joe, just want to get a sense from you. Um what is what is a risk that you think is unappreciated or underappreciated right now? What are you going to be watching closely for? >> Well, first of all, I thank you for not asking me my opinion about gold. I can see you worriedly sitting there quite worried. But >> the only thing I can say about gold is that about six, seven months ago, I was uh doing some work in Mali and I thought to myself, wow, this is a great time to buy gold and yet I didn't. And uh analys >> analysis paralysis, it happens to all of us. >> So So that's uh that's my story with respect to uh to gold. But um you know with respect to to your question um I think what what worries me is um is how this is going to resolve itself and and um and I think that um strategically it's going to be very important for us the United States to ensure that um that we resolve it in a way that does not leave um Iran in a strategically strengthened position. And by that I say I what I mean is there is no doubt that we have um inflicted tremendous damage on Iran's um ballistic missile capabilities, its military, its navy, its army, its navy, the IRGC, etc. Um but but they have found that they can fight back and that they um aren't crumbling, you know, at um at at first um at at you know the first rounds impacting um and it's not Venezuela. This is an ideologically driven regime um that in many ways is fanatical. It's been responsible for the deaths, the murders of over well over a thousand US citizens, not to mention the murders of tens of thousands of their own citizens and other citizens around the c around the world. Um, so this is this is a tiger um in in many ways and now it's an injured tiger. Uh, and it's an injured tiger that's found some strategic relevance in what it can do to terrorize the Gulf and what it can do um especially to impact uh world trade. Uh and so I think that what um concerns me is that we cannot in my my opinion leave that um strategic strength with Iran. um as we look for a way out, they in my opinion cannot leave this um in a is um strategically uh victorious. Um and how you craft that is going to be um complicated and it's going to take support um from not only our golf partners but our partners in the west. Um and it will have to be very carefully managed because otherwise it's going to change uh the dynamics moving forward of um how we move goods through the Gulf um on how quickly um you know the world economy can be impacted. Um and and that's not the place where I think we want to be. Um so >> finish the job is your briefing report to the uh to the administration. Uh David, I I want to leave you with the last word as someone who's sitting in the region. Um and really kind of the same question and you just brought up some great points, Joe. We now know the nature of warfare's changed. You got some drones and a nimble you can do a lot of damage in a strategic area. Global economic finance and infrastructure is now a legitimate target in war. I mean these are this is a this is what is going to carry forward through this regardless of the outcome I think which is going to worry people from a geopolitical point of view. Uh David, what are you most concerned about? What is the risk you think is underappreciated here? I >> I think you know, listen, I think regardless of the outcome of this war, the biggest winner is going to be, of course, the military industrial complex in the United States. As we all know, this is the single most powerful arm of the United States. It's also the most corrupt. We spend a trillion dollars a year on defense, and we can't even finish Iran in three days. And guess what? At the end of this war, all these people working in the defense industry, they're going to say, "The reason why we couldn't finish Iran in three days was because we're not spending enough on defense." They're now already asking for 200 billion more. Trump, who actually campaigned on cutting back on defense, now wants to go up to 1.5 trillion by 2027. They're talking about going to two trillion by the end of his administration. If you're talking about being bullish gold, that should you be you should be really bullish gold because what is what this war is going to do is going to empower the basically the most irresponsible corrupt part of the US government, which is the military-industrial complex. It's going to help them make the case we now need to spend even more, you know, because if we don't spend more, we're going to be at risk. And unfortunately, Americans don't know any better. They just think that somehow spending more money on arms is going to make the Americans stronger when I think the biggest problem right now in terms of the US China rivalry is the US is actually falling behind in innovation and education. The latest basically you know what higher education used to be the number one asset in United States okay in world university rankings year in year out US was like top top 10 you know seven or eight university the latest basically ranking that came out based on research reports Chinese university now's rank basically have taken over eight out of the top 10 spots in terms of research output that is the problem that we this is why using force the US is trying to use force China is trying to use brain and which one do you think is going to win in the end? To me, it's pretty obvious. If you don't believe that, buy gold. >> Well, that dot dot dot to be continued, I feel, is how we have to lay that because I see Chris and Trey probably wanting to jump in. Um, but we're out of time. I thank all of you for joining us, especially during these challenging times. You gave us terrific insights to carry through the rest of our conversations, and I hope you'll come back again soon. Thanks to all of you. >> Thanks.