US Iran War - The Catalyst That Could Break the Financial System (and the Paper Price of Silver)

No one knows exactly how this will unfold—but it’s getting harder to argue that we aren’t sliding toward a major conflict with Iran.

Despite signals from the White House that diplomacy is still on the table, the outlook feels more ominous than reassuring. Yesterday, President Trump—via his press secretary—said:

That statement captures the moment well: full of ambiguity, high on uncertainty, and low on real clarity. Could Trump cut a deal at the last minute? Maybe. But from Iran’s perspective, they’ve already played that game.

They were in negotiations. And during that period, Israel launched a series of covert strikes inside Iran, strikes that the US was well aware of in advance. If those talks were simply a smokescreen to get Iran to lower its defenses, why would Tehran ever return to the table?

It’s for this reason that the idea of de-escalation feels increasingly far-fetched. And if that weren’t enough…

The U.S. is now deploying a third aircraft carrier strike group to the Mediterranean…

In addition, dozens of US Air Force aerial refueling tankers have been deployed from the US to Europe & The Middle East. The signal is clear: Washington is preparing for significant potential operations over the skies of Iran.

Taken together, this military buildup looks like more than a bluff. It looks like a steady march toward direct U.S involvement in the growing conflict.

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If that happens, one of the most dangerous escalations would be a closure of the Strait of Hormuz—a narrow maritime chokepoint adjacent to Iran. Over 20% of global daily oil supply flows through this single waterway.

A closure would be a last-ditch move for Iran, as it would harm its allies & trading partners such as India and China - in fact such a move could devastate the global economy, but by doing so would be a form of asymmetric warfare against the US. A shutdown, even temporary, could send oil prices into the stratosphere. JPMorgan has already forecast $120 oil under that scenario—but if the shutdown is sustained, even that may look conservative.

There is no immediate replacement for that volume of oil. The knock-on effects could include a global economic recession, a collapse in consumer confidence, and a cascade of currency and credit market disruptions.

Central banks, with no other tools to battle the downturn, would likely panic - opening the money spigots once again, regardless of the inflationary effects. Not to be too hyperbolic, but this could be the kind of catalytic event that ignites the long-rumored Great Reset.

How This Could Affect Gold and Silver

If the Strait is closed, all bets are off. Oil soars, but what happens to metals?

In a worst-case scenario, a global recession could drag down industrial commodities—and silver could get caught in the downdraft. Gold may hold up better, given its role as a monetary safe haven.

But even if the spot price of silver crashes, good luck getting your hands on physical. As we saw in March 2023 during the regional banking crisis, premiums on physical metal exploded—and that was a small tremor compared to this.

Now imagine that panic on steroids. If the Fed or ECB are forced to resume QE, even paper metal prices could rip higher, and physical inventory could vanish entirely.

Final Note:
We're not calling for apocalypse—but the market is treating this as business as usual. It’s not. The window to prepare is closing fast.

Disclaimer:
This content is for informational and educational purposes only and does not constitute financial, investment, or legal advice. Always do your own research and consult with a qualified advisor before making any financial decisions.