If US-Israel strike Iranian nuclear facilities, a rational Iran would find a way to retaliate without risking all out war, which it would lose. Blocking the strait of Hormuz risks such a defeat, but inciting the Shia populated East-Arabian oil fields into rebellion against the Saudi monarchy is a possible proxy move that would put some sand in the wheels of a direct US intervention. This would be Iran's tit-for-tat response to the Saudi-NATO-Israeli
backing of the salafi insurgency in Syria, which also provides a bulwark against Iranian retaliation through that country. Will the effect on oil, gold and stocks be similar to that of the 1973 Yom
Kippur war? The impact on oil:
Gold that decade correlated strongly with oil, albeit with a more volatile pattern. A notable divergence was the 1974-5 recession where gold gave back nearly all of the rise attributed to the war.
S&P500 performance during and after the 1973 war: during the war +1.4%; three months -13.2%; one year -37%; three years -9.3%; five years -13.8%.
Gold that decade correlated strongly with oil, albeit with a more volatile pattern. A notable divergence was the 1974-5 recession where gold gave back nearly all of the rise attributed to the war.
S&P500 performance during and after the 1973 war: during the war +1.4%; three months -13.2%; one year -37%; three years -9.3%; five years -13.8%.
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