Israel-Iran: Scale of Escalation Suspect

Discussion

Regular readers of The WOTE will undoubtedly recall the valuable conversations I had in early October with my Army strategist contact, conversations that allowed me to take the Israel-Hamas conflict more serious than consensus.

I spoke to this contact this afternoon, and he is of the opinion that Iran must respond to Israel’s embassy attack, but the fact the drones en route to Israel will take “hours” to get there is the sign this is not an escalation to the scale many market participants believe.

This is very much in line with my thoughts on the issue, as Iran’s empty threats in response to Israel’s invasion of Gaza are a key tell regarding the seriousness of their regional terror ambitions.

Further - it is in the Biden administration’s best interests to avoid a sustained spike in oil above $100 and an attendant disruption to otherwise stable financial market conditions. The Obama-Biden Iranian apparatus clearly has no issue negotiating with Iran behind closed doors, and I strongly suspect some serious horse trading is going on right now as I type.

Bitcoin is down big on this escalation and will be a key tell heading into Sunday night futures trading how Fed/Treasury policymakers are handling the breakout in volatility. At the risk of beating a dead horse, I have a VERY hard time seeing policymakers allowing a sharp drop in markets at 9:30am EST on Monday.

Watch Bitcoin for the “tell”.