American Consequences - February 2020

Pentagon itself has admitted as much. If and when a war with Iran happens – even if there’s only a whiff of it happening – investors should expect the third and most dramatic oil shock. Of course, we’re not cheering for a war, or the collateral damage that would inevitably come with it. Nevertheless, the odds of a big war in the Middle East starting soon are high. That means a sudden spike in the price of oil is equally likely. There’s a good chance of outsized returns and soaring dividends in select oil stocks in the weeks ahead. I recommend positioning yourself for big profits now... before the bullets really start flying.

secretary of state, has been eager to bomb Iran for years. And last year, Rudy Giuliani, one of Trump’s lawyers and a longtime political ally, announced that Trump is “committed to regime change” in Iran. THEWORLD’S MOST CRITICAL OIL CHOKE POINT Iran has the world’s third-largest proven oil reserves, or roughly 10% of the world’s total. A war between Iran and Israel (and its U.S.- led allies) would wreak havoc on the oil market. That’s because Iran holds a very powerful card... Iran could effectively shut down the Strait of Hormuz, the narrow channel connecting the Persian Gulf to global markets. It is the only sea route from the Persian Gulf to the open ocean. Tankers moving oil from Iraq, Iran, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates all have to pass through the strait. That translates into roughly 35% of the world’s oil traded by sea. Nearly $2 billion worth of oil passes through the Strait of Hormuz every day. It’s the most critical oil choke point in the world. In the event of an all-out war, Iran would quickly shut down the Strait of Hormuz. It’s been blatantly clear about this. Credible studies have shown that – in a best-case scenario for the U.S. Navy – Iran could seal off the Strait with sea mines and asymmetrical warfare techniques for at least a month before the U.S. could reopen it. The

Nick Giambruno is the chief analyst of Casey Research’s flagship advisory, The Casey Report . He writes about geopolitics, value investing in crisis markets, the global cannabis market, international banking, second passports, and surviving a financial collapse, among other topics. In short, Nick’s work helps people make the most of their personal freedom and financial opportunity around the world. If you’re interested i

American Consequences

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