MW Israel bombs Iran - these investments are now your best defense
By Charlie Garcia
Diplomacy is toast; missiles are airborne - and gold, defense stocks and market volatility should be your portfolio priorities
Investors must diversify aggressively and hedge thoughtfully Hope for peace - but prepare realistically for ongoing chaos.
Some mornings you wake up to coffee. Other mornings, you wake up to Brent crude (BRN00) (BRNQ25)suddenly trading above $70, gold (GC00) topping $3,400,and breaking news that half of Iran's military command just became smoking rubble.
Welcome to "Operation Rising Lion," Israel's surprise attack on Iran's nuclear ambitions, delivered by F-35 stealth fighters.
Global markets reacted predictably: badly, expensively and immediately. West Texas Intermediate Crude (CL.1) (CLN25) surged, gold jumped, and U.S. stocks tumbled, with defense-industry giants such as Lockheed Martin $(LMT)$ and Northrop Grumman $(NOC)$ among the only bright spots.
If you think this is another routine Middle East scuffle, buckle up. This conflict is different, more dangerous, and threatens to break every assumption of stability investors have relied on for decades.
Iran's hidden arsenal: Deeper, deadlier - and still untouched
If these attacks continue - and Israeli leaders explicitly say they will - Iran won't just blink; it'll fire back. And Israel could soon find itself juggling multiple wars simultaneously.
Israel's strikes looked impressive on TV but mostly just scratched the surface - literally. Iran's real military strength remains untouched in fortified underground "missile cities."
Recent intelligence assessments confirm these massive bunkers are buried hundreds of feet underground. Missiles travel underground railways, emerging from launch sites miles from the storage bunkers.
In short, Israel has bombed the showroom - but the real warehouse remains untouched, fully armed and operational.
Israel's gamble is clear: strike early, shake Iran's confidence, and hope Tehran blinks first. But if these attacks continue-and Israeli leaders explicitly say they will-Iran won't just blink; it'll fire back.
Expect Iran's military doctrine - tested extensively in recent exercises - to kick in rapidly: first a massive missile salvo, then hundreds of cheap Shahed drones flooding Israeli airspace, followed by precision-guided strikes crippling critical Israeli infrastructure.
Israel won't just be facing Iran. Tehran's regional proxies - Hezbollah in Lebanon, Houthis in Yemen, Iraqi militias -will eagerly join the chaos. Israel could soon find itself juggling multiple wars simultaneously.
Iran's cyberwarriors are ready to spread digital chaos from Tel Aviv banks to Wall Street trading floors.
And don't overlook Iran's cyberwarriors. They're ready to spread digital chaos from Tel Aviv banks to Wall Street trading floors, disrupting global financial infrastructure without firing a single missile.
This is just round one - and Iran hasn't even swung yet. Investors, and anyone dependent on Middle East oil (that's pretty much everyone) should brace themselves: things will likely get messier before anyone even dreams of declaring victory.
Iran's nuclear intelligence bombshell: MAD in the Middle East
Even more alarming: Iran's Supreme National Security Council recently announced possession of "a vast quantity of strategic and sensitive intelligence" on Israeli nuclear sites - including Dimona and Soreq. Tehran explicitly stated this intelligence enables precise targeting.
This isn't typical saber-rattling. If accurate, it introduces Mutual Assured Destruction $(MAD.AU)$ - the Cold War's most terrifying acronym - into the Middle East. The odds are not zero that Iran could use its newfound targeting intelligence against previously untouchable Israeli nuclear sites.
Russia, China and Arab states: Awkwardly choosing sides
Russia and China immediately condemned Israel's attacks - surprising absolutely no one. Russia's calling this "destabilizing" is rich, coming from the folks currently leveling Ukrainian apartment buildings. Privately, the Kremlin must be thrilled: every missile strike boosts oil prices, filling Russian President Vladimir Putin's coffers.
China, fresh from playing marriage counselor in recent Saudi-Iran peace talks, now faces diplomatic heartburn. Beijing juggles heavy investments in Tehran and growing economic ties with Tel Aviv - part of China's sprawling Belt and Road Initiative. Continued conflict forces China off the fence. Given Iran's geographic importance, expect Beijing to lean quietly toward Tehran. After all, "sovereignty" sounds nicer than "cheap oil."
Sunni Arab states- Saudi Arabia, UAE, and Bahrain - are doing diplomatic gymnastics worthy of Olympic judges. Publicly, they condemn violence with carefully crafted ambiguity. Privately, they share Israel's anxiety about Iranian nukes but can't openly back air raids on a fellow Muslim nation. Saudi Arabia's Palestinian peace conference, conveniently scheduled next week in Paris, will double as a polite but firm rebuke of Israeli actions, reaffirming Palestine's statehood as a prerequisite for closer relations.
The UAE and Bahrain - which normalized ties with Israel through the 2020 Abraham Accords - are signaling quietly to Tel Aviv: "We're still friends, but please don't drag us in deeper." With Iranian missiles easily capable of reaching Abu Dhabi skyscrapers, their hesitation is understandable.
Meanwhile, Washington finds itself diplomatically lonelier than ever, as Russia and China profit from the unfolding chaos.
More: This crucial corner of the energy market is at high risk from an all-out war between Israel and Iran - and it's not oil
Three scenarios investors should understand - all of them costly
Chronic volatility, elevated energy prices, and persistent geopolitical stress are now baseline conditions for markets and your money.
Markets now face three distinct, costly scenarios:
Base case (60%): Tensions remain high but limited. Oil settles between $70-80, defense stocks gain steadily, gold, bitcoin (BTCUSD) and cybersecurity stocks thrive.
Escalation scenario (25%): Iran retaliates aggressively - missile attacks, drone swarms, cyber warfare, possibly blocking the Strait of Hormuz. Oil soars past $120, stocks fall 10%-15%, defensive assets and other perceived safe-haven holdings jump.
Diplomatic miracle (15%): Optimistic but improbable. Peace unexpectedly breaks out, markets rally sharply - then quickly sober up as geopolitical realities resurface.
Watch these panic indicators carefully:
-- Oil rises above $90: Indicates imminent supply disruptions.
-- USD/JPY above 155: Safe-haven stampede intensifying.
-- Credit spreads above 150 bps: Corporate stress increasing sharply.
-- VIX above 30: Volatility signals widespread panic.
Israel's attack marks a fundamental shift. Traditional deterrence and predictable geopolitics no longer apply. Israel chose to act now because waiting wasn't strategic patience - it was strategic surrender.
This new Middle East means that chronic volatility, elevated energy prices, and persistent geopolitical stress are now baseline conditions for markets and your money.
Investors must diversify aggressively, hedge thoughtfully and abandon any visions of easy diplomatic solutions. Hope for peace - but prepare realistically for ongoing chaos.
Welcome to the new normal in Middle Eastern geopolitics: expensive, uncertain, and here to stay.
Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more. Garcia holds positions in bitcoin and gold. Email him at charlie@R360Global.com.
-Charlie Garcia
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(END) Dow Jones Newswires
June 13, 2025 03:09 ET (07:09 GMT)
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