Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Giant Financial Risk You'll Never Hear About on Television

Commodities / Crude Oil Mar 13, 2010 - 06:09 PM GMT

By: DailyWealth

Commodities

Best Financial Markets Analysis ArticleMatt Badiali writes: From 20 miles in the air, the Musandam Peninsula doesn't look like much.

Sparsely populated and dominated by the Al Hajar mountain range, little happens on the Musandam that matters to the outside world. Some fishing, tourism, and petty smuggling are about all that goes on in this tiny region belonging to Oman, the southeastern-most country on the Arabian Peninsula.

But the desolate landscape belies the Musandam Peninsula's critical role in global politics and industry...
 
The U.S. government has a massive contingency plan to defend the area... and investors must pay close attention to the peninsula for the same reasons our government does.
 
Investors must know about the Musandam Peninsula because it juts out into a waterway locals know as Tangeh-ye Hormoz. For thousands of years, this waterway has held vital strategic significance for regional powers looking to control sea access to the Arabian Peninsula, the Persian coast, and ancient Mesopotamia.
 
Notice... I said "regional," not global. Neither the U.S. nor any other significant economic power obsessed over it until the dawn of the hydrocarbon age, around 100 years ago.
 
Nowadays, the the Tangeh-ye Hormoz is one of the world's biggest geopolitical trump cards... and it poses a great threat to your financial wellbeing.
 
You see, this body of water serves as the transit point for more than 16 million barrels of oil per day... more than 40% of the world's daily consumption and 64% of the oil produced in the Middle East. More oil flows through this area daily than is consumed by China, India, Japan, and Germany combined.
 
The Musandam Peninsula is the constriction point that "chokes off" the waterway Westerners now call the Strait of Hormuz. And the regions it controls sea access to? That's modern-day Saudi Arabia, Iraq, and Iran. This makes it the most important waterway in the entire world.
 
 
The Strait of Hormuz is also Iran's trump card in its desire to go "nuclear."
 
The great concern here for the U.S. government – and investors – is that Iran could use boats, missiles, mines, or a combination of all three, to attack oil tankers in the Strait... just in case Iran is attacked. Even a small success here for Iran could send the price of oil past $200 a barrel... which would strangle our fragile economic recovery.
 
The potential solutions to this problem on the table right now are: 1) The U.S. attempts to knock out Iran's nuclear capabilities. 2) Israel attempts to knock out Iran's capabilities. 3) We bluster and clench our fists, then ultimately allow Iran to have nuclear capabilities.
 
It's the biggest "darned if you do, darned if you don't" situation in the world. Here's why...
 
An attack designed to destroy Iran's nuclear capabilities isn't 100% guaranteed to work. We don't have complete intelligence on the locations and extent of Iran's facilities. Even if the world knew exactly where all the facilities were, we couldn't be sure attacks would take them out completely. You'd have to invade the country and inspect the damage from up close.
 
Less than 100% isn't good enough here. A failed attack would immediately place Iran into "war mode," which would destabilize the Middle East and enrage the Muslim world... something the U.S. doesn't want. One of the first moves for an Iran in war mode will be an attempt to shut down the Strait of Hormuz.
 
An attack would also send lots of young Middle Eastern men and money running for the terrorism business. America has worked too hard, risked too many soldiers' lives, and spent too much money to risk a terrorism renaissance.
 
So if an attack fails, you'll have a terrible version of what I just described. If you don't attack, you have a nuclear-armed Iran. Like I say, darned if you do, darned if you don't.
 
I think diplomacy is the likely outcome here. But you're crazy not to buy some financial insurance in case this situation is not resolved without missiles. After all, we're talking Israel, Iran, and the U.S. here. These nations did not get where they are today by sending Hallmark cards and asking "pretty please."
 
If this conflict goes "hot," SAFE oil and gas assets will soar in price... the kind far away from the Middle East and its problems. In tomorrow's essay, I'll tell you the simplest and easiest way to buy them. In the case of a Middle Eastern conflict, this will beat the pants off gold for "crisis insurance."
 
Good investing,
 
Matt Badiali


http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2010 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in