HIGHEST UNCERTAINTY LEVELS IN HISTORY: World Uncertainty Index Explodes Past COVID, GFC, & 9/11 on WW3 Fears, Iran Threatens U.S. Fleet, China & Russia Send Warships, Intel, & Hypersonic Missiles!

The world is holding its breath. In a stunning and direct threat to the United States, Iran’s Supreme Leader has threatened to sink two American aircraft carriers, the USS Abraham Lincoln and the USS Gerald R. Ford in retaliation to any first strike by the Americans.

This is not the usual rhetoric; it is a direct challenge backed by a formidable military buildup and, most chillingly, the explicit support of two other global superpowers; China and Russia.

As dozens of U.S. fighter jets streak towards the Middle East, China and Russia are deploying their own warships to the Strait of Hormuz for joint exercises with Iran, creating a powder keg scenario that has the world on a knife’s edge.

Amid the chaos, confusion, and conflicting reports of deals and deadlines, the “war premium” is back, and it’s about to get very, very real.

Here’s what you need to know;

• HIGHEST UNCERTAINTY IN HISTORY: The World Uncertainty Index has reached 105,000; surpassing COVID-19, the Global Financial Crisis, 9/11, and the Dot Com Bubble. This is the highest level of global uncertainty ever recorded.
• DIRECT THREAT: Iran’s Supreme Leader has issued a direct threat to sink two U.S. aircraft carriers, a dramatic escalation in rhetoric that has put the world on high alert.
• AXIS OF RESISTANCE: In a terrifying development, China and Russia are deploying warships to the Strait of Hormuz for joint exercises with Iran, creating a direct challenge to the massive U.S. naval presence and raising the specter of a great power conflict.
• U.S. MILITARY BUILDUP: The U.S. is surging airpower to the region, including F-35s, F-22s, and F-16s, in addition to the carrier strike groups already in place. This is the most significant military buildup in the region in years.
• CHINA’S SHADOW WAR: Beijing is not a neutral party. It is reportedly providing Iran with critical intelligence on U.S. ship locations and has supplied a vast arsenal of military hardware, including advanced air defense and missile systems. Russia has allegedly supplied Iran with hypersonic missiles, a direct threat to U.S. carriers.
• THE UNTHINKABLE: What happens if the U.S. loses or is forced into a humiliating stalemate? The dollar’s reserve status would collapse, the petrodollar would die, and the entire post-WWII global order would shatter. The Pentagon has run the simulations. The outcome is far from certain.
• GOLD’S WAR PREMIUM: Historically, gold thrives in times of war and geopolitical crisis. The research is clear: major conflicts act as a powerful bullish catalyst for gold as investors flee to safety and governments print money to fund war efforts. The current situation is a textbook case for a major repricing of gold, even if gold first drops on the fear of war breaking out. It’s likely why we are now seeing $20,000 call options appearing!

Right now is the highest level of uncertainty in history as the World Uncertainty Index explodes past levels seen for COVID, GFC, & 9/11 on WW3 Fears. Iran threatens to sink the U.S. fleet, China & Russia send warships of their own to the region, along with intel, & hypersonic missiles. It is now a powder keg ready to explode!

Let’s Dig Into The Following:

1. The highest level of uncertainty in human history is happening right now. The World Uncertainty Index, a GDP-weighted measure of global geopolitical and economic uncertainty, has exploded to 105,000; surpassing the COVID-19 pandemic, the 2008 Global Financial Crisis, the 9/11 attacks, and the Dot Com Bubble. Why the world is more uncertain about the future right now than at any point since data collection began in 1993 and the implications are staggering!
2. The powder keg in the Strait of Hormuz is literally sitting on a knife’s edge. The situation is deteriorating at an alarming pace. What began as a tense negotiation over Iran’s nuclear program has devolved into a full-blown military standoff with global implications. The diplomatic off-ramps appear to be slim to closing. Why into this tinderbox, the United States is pouring gasoline!
3. Iran is part of a broader Axis of Resistence that is building up. The situation has now escalated beyond a bilateral U.S.-Iran conflict. In a move that sends a chilling message to Washington, China and Russia have announced they will dispatch their own naval forces to the Strait of Hormuz to conduct joint military exercises with Iran. Why this is a direct challenge to the U.S. naval presence and creates a terrifyingly direct line to a potential great power confrontation that could lead to WW3!
4. The highest levels of the U.S. government, including President Trump is now including in their war calculus; what happens if the U.S. doesn’t decisively win or worse…loses? Why the consequences would be immediate and catastrophic; not just militarily, but economically and geopolitically!
5. And despite any initial drops in gold’s price over fears of a war, there IS a war premium that gets applied to gold. In times of extreme geopolitical stress, all traditional correlations break down, and capital flees to the one asset that has preserved wealth for 5,000 years: gold. The historical precedent is undeniable. I share a brief analysis of the major conflicts over the past 25+ years and how they reveals a clear pattern for gold. Why any initial downward move in gold will almost certaintly be followed by an explosive move higher!

So, let’s dig in…

The Highest Level of Uncertainty in Human History

Before we dive into the specifics of the Iran crisis, we need to understand the broader context. The world has just reached the highest level of uncertainty in recorded history.

The World Uncertainty Index, a GDP-weighted measure of global geopolitical and economic uncertainty, has exploded to 105,000; surpassing the COVID-19 pandemic, the 2008 Global Financial Crisis, the 9/11 attacks, and the Dot Com Bubble.

This is not hyperbole. This is quantifiable, measurable fear. The chart above shows a vertical spike in uncertainty that dwarfs every previous crisis.

The world is more uncertain about the future right now than at any point since data collection began in 1993. The implications are staggering.

In an environment of extreme uncertainty, capital does not flow to stocks, bonds, or speculative assets. It flows to true and timeless safety.

The Powder Keg in the Strait of Hormuz

The situation is deteriorating at an alarming pace. What began as a tense negotiation over Iran’s nuclear program has devolved into a full-blown military standoff with global implications.

The diplomatic off-ramps appear to be slim to closing. Iran has officially on again, off-again rejected the U.S. deal, declaring its missile and defense systems “not subject to negotiation.”

President Trump has issued a stark warning of his own, stating that if he were to be assassinated by Iran, he left instructions for the country to be “obliterated.” Watch HERE!

Into this tinderbox, the United States is pouring gasoline. A massive contingent of U.S. airpower is en route to the Middle East, joining the already formidable naval presence led by the USS Abraham Lincoln and USS Gerald R. Ford. We are witnessing a concentration of military force not seen in the region for years.

The Strait of Hormuz is not just another body of water. It is the jugular vein of the global economy. Approximately 21 million barrels of oil pass through this narrow, 21-mile-wide chokepoint every single day; roughly one-third of all seaborne-traded oil and nearly 30% of global liquefied natural gas.

A single miscalculation, a single missile strike, a single sinking of a U.S. carrier in these waters would send shockwaves through every market on Earth.

• Oil prices would explode.
• Supply chains would collapse.
• Inflation would surge.
• And the Fed, already trapped by a cracking economy, would have no choice but to print.

The Straits of Hormuz is not just a military flashpoint; it is an economic doomsday device, and right now, the fuse is lit. But this is not a simple bilateral confrontation. The game has changed.

The Axis of Resistance and the WW3 Premium

The situation has now escalated beyond a bilateral U.S.-Iran conflict. In a move that sends a chilling message to Washington, China and Russia have announced they will dispatch their own naval forces to the Strait of Hormuz to conduct joint military exercises with Iran.

This is a direct challenge to the U.S. naval presence and creates a terrifyingly direct line to a potential great power confrontation.

The Straits of Hormuz, a chokepoint for a third of the world’s seaborne oil, is now a stage for a potential World War 3 scenario, with the U.S. carrier groups facing a coordinated axis of resistance.

This development changes the calculus entirely. The market is no longer pricing in a regional conflict; it is beginning to price in the unthinkable.

China is not a passive observer; it is an active participant, providing not only military hardware and diplomatic cover but also critical intelligence, reportedly using its spy ships to provide the U.S. carrier locations to Iran.

And, they have assets in the area that if they were harmed, it would likely drag them into a direct conflict against the U.S.

All of this also makes the massive U.S. fleet a sitting duck for Iran’s advanced missile capabilities, which now include Russian-supplied hypersonic weapons capable of striking and sinking U.S. carriers, without much defense against it.

The Unthinkable; What Happens if the U.S. Loses?

Let us speak plainly about the scenario that no one in Washington wants to publicly acknowledge:

• What happens if the United States does not achieve a decisive, overwhelming victory in a conflict with Iran?
• What happens if a U.S. carrier is sunk?
• What happens if the combined military and intelligence capabilities of Iran, China, and Russia prove too formidable, and the U.S. is forced into a humiliating stalemate or, worse, a retreat?

The consequences would be immediate and catastrophic; not just militarily, but economically and geopolitically.

• The global power structure that has existed since the end of World War II would shatter overnight.
• U.S. hegemony, already under strain, would collapse.
• The perception of American military invincibility; the very foundation upon which the dollar’s reserve currency status rests, would evaporate.
• Allies would scramble to realign.
• Adversaries would become emboldened.
• The Middle East, Africa, Latin America, and even parts of Europe would pivot toward the new axis of power: Beijing and Moscow.

The economic implications would be even more severe. The U.S. dollar’s role as the global reserve currency is not backed by gold, or even by the full faith and credit of the U.S. government in any tangible sense.

It is backed by the perception of American power; military, economic, and political. A loss in the Straits of Hormuz would shatter that perception.

• Central banks around the world, already diversifying into gold at record rates, would accelerate their de-dollarization efforts.
• The petrodollar system, which has funneled global demand for dollars for five decades, would be dead.
• Oil-producing nations would demand payment in yuan, rubles, or gold.
• U.S. Treasury yields would spike as foreign buyers disappeared.
• Inflation would explode as the dollar collapsed.
• The Fed would be forced to print on a scale that would make 2020 look like a rounding error.

The Pentagon knows this. They have run the simulations. They understand that a conflict in the Straits of Hormuz, with China providing real-time intelligence and naval ships and Russia supplying advanced weaponry, is not the “shock and awe” campaign of 2003.

This is a peer adversary scenario, and the outcome is far from certain. The question is: Does President Trump understand the stakes? Is he willing to risk the entire architecture of American global power on a military gamble in the world’s most dangerous waters?

Or is this saber-rattling designed to extract concessions, knowing full well that the alternative; actual war, is too catastrophic to contemplate? Is this nothing more than another TACO (Trump Always Chickens Out) scenario in the end?

The market is beginning to ask these questions. And the answer, regardless of what it is, will ultimately be bullish for gold, despite any intial fear based price drops.

Gold’s Historical War Premium

In times of extreme geopolitical stress, all traditional correlations break down, and capital flees to the one asset that has preserved wealth for 5,000 years: gold. The historical precedent is undeniable. An analysis of major conflicts over the past 25+ years reveals a clear pattern:

• Iraq War (2003-2011): Gold saw modest initial gains, followed by a multi-year super-cycle as the prolonged conflict fueled economic uncertainty and dollar weakness.
• Russia-Ukraine War (2022): Gold surged immediately on the invasion, rocketing to near all-time highs as the world priced in the risk of a wider European conflict.
• Israel-Hamas Conflict (2023): Gold broke decisively above $2,000 as the conflict began, with investors anticipating a broader regional escalation.

The reason is two-fold;

• First is the classic safe-haven demand. As the risk of war rises, investors sell paper assets and buy physical gold. It’s just safer.
• Second, and more importantly, is the inflationary impact of war. Wars are astronomically expensive. They are funded by massive government borrowing and, inevitably, currency creation. That’s always very bullish gold.

The market understands that a major conflict with Iran, especially one involving China and Russia, would necessitate a level of money printing that would dwarf the response to the 2008 financial crisis and the COVID-19 pandemic combined.

Any initial downward move in gold will almost certaintly be followed by an explosive move higher. This could be why gold $20,000 call options are surging despite the recent gold sell-off.

Aakash Doshi of State Street Investment Management said the size of the trade is striking given its distance from current prices, likening it to a “cheap lottery ticket.” Some large players are clearly betting on something big coming.

The Inevitable Flight to Safety

The situation in the Middle East is a tangled mess of threats, counter-threats, and conflicting reports. One moment, Iran’s Foreign Minister claims an “understanding on main principles” has been reached; the next, the Supreme Leader is threatening to sink U.S. warships. This confusion and uncertainty are, in themselves, bullish for gold.

But the underlying signal is clear. The world is moving closer to a major military confrontation, one that could involve not just the U.S. and Iran, but also China and Russia.

The potential for a miscalculation or an intentional escalation is terrifyingly high. In such an environment, the demand for a neutral, non-sovereign, and universally accepted store of value will become overwhelming.

The war premium will be priced into gold and it will happen very soon, and if the first shots are fired, the move higher will be explosive. Know history and disregard initial moves.

Metals and Miners

Feb 17