Well, U.S. stock futures are ripping by around 2% this morning as Trump halts attacks on Iranian energy infrastructure for five days.
Now, over the weekend, Trump threatening to strike Iran's power plants if they don't open the Strait of Hormuz and Iran sending ballistic missiles towards the joint U.S.-UK military base in the Indian Ocean.
Now, a group of U.S. allies have also released a statement saying that they're ready to take steps towards easing the disruption in the Strait of Hormuz.
But countries still aren't committing to placing their navies in the Strait.
Elsewhere, Cuba has been suffering blackouts as its oil supply has been cut off by the U.S.
Trump says he thinks he'll have the honor of taking the island.
And a Cuban official says the country is preparing its military in case of U.S. military action.
Well, joining me to weigh in is Patrick L.
Young, Chairman and Founder of Exchange Invest.
Patrick, good morning to you.
A lot of headlines to get through, but Iran remains the key story moving markets this morning.
So what is your take on the fast developing situation?
First of all, I think, good morning, Remy.
It's important to understand information asymmetry at this juncture.
The Iranian regime has been decimated.
Look at how many senior officials are already dead.
Therefore, it's not unsurprising that everything is disconnected.
Frankly, the propaganda arms probably have no idea what's going on in the government and they're still in remote mode.
You've got the IRGC, the Revolutionary Guard, they're going to try and stay there till the end.
You've got more pragmatic forces who are realising effectively the end is nigh.
Either Trump devastates the entire national infrastructure via the US forces, or they give up at this juncture.
So that's why you're seeing instant denials to what's Trump saying.
I have no doubt whatsoever that Trump has firm belief that he is talking to key people in the overall Iranian regime.
I think we are closer.
We're at the beginning of the end, if you want to put it that way.
A couple of weeks ago, we were only at the end of the beginning.
It is going to result in peace in Iran soon enough.
What happens with the regime then?
Now that's open to debate.
Yeah, and I do want to get your take on the Strait of Hormuz.
So countries are refusing to send their navies to the Strait, which has led to Trump's dissatisfaction with NATO.
And at the same time, Iran is targeting oil infrastructure of neighboring countries in the Middle East.
And Trump has also threatened Karg Island.
So how much danger is there actually when it comes to the global oil supply chain?
The global oil supply chain, and it's very important to understand this, let's not listen to the bleating of the bureaucrats.
The International Energy Authority, IAEA, has frankly discredited itself.
It looks as bad as the World Health Organization claiming it was going to be perpetual pestilence during COVID.
The truth is things are already moving.
The Saudi Arabians have already got 3.8 million barrels per day pumping along a different pipeline that's going out to the opposite side of the country, doesn't need the Straits of Hormuz anymore.
The overall balance is coming back.
Yes, there's an imbalance right at the moment, but it's not that mission critical.
What we're looking at, of course, is Understand one thing.
It may take weeks to bring total peace to the Straits of Hormuz.
Even if the Iranian regime was to change tomorrow, we still have the likelihood that some loony tunes are going to be out there firing their missiles and their drones for weeks to come.
Look at the end of the Second World War.
There were people still fighting on behalf of the Nazis a year after we actually had Victory in Europe Day declared.
That is quite plausible and that's why it's also important to get at least these 22 nations who've already signed up and more to get into the Straits of Hormuz and secure it right now.
Although let's understand something from the vantage point of the USA.
The Straits of Hormuz do not matter. per se, because only 3.5% of American oil is actually needed from there.
It's the rest of the world that's under great pressure, and that's why you're seeing stress in the Chinese media.
That's why you're seeing great concern in the European Union's media.
And also, of course, Africa is critically affected by a lack of oil going through the Straits of Hormuz, because that is 20% of the world's oil and gas pipelines are ultimately sending oil and gas through those particular avenues.
Yeah, and Patrick, as you mentioned, global economies outside of the U.S. are being impacted, and especially when we're talking about energy.
So we will keep an eye on what global central banks say and do in the coming days and weeks.
But I do want to get your take on Iran sending two ballistic missiles towards Diego Garcia, which is the joint U.S.-UK military base in the Indian Ocean.
What do you make of this move and how does it impact Keir Starmer's decision to try and stay out of the conflict despite pressure from Trump?
Do you think this is mission creep?
OK, first of all, Keir Starmer, as I've already mentioned, he's in the twilight of his prime ministership already after only two years.
The man is tragically incapable of running the UK and he's been caught out on everything.
Don't forget, Starmer is in the middle of a process to hand this whole base, the Chagos Islands, where the base is on, to Mauritius, which is effectively a proxy for China, which is one of the most idiotic geopolitical decisions of all time, but it's based upon Stormer's own perverse understanding that international law, something that only basically Canada, the UK and a few Europeans subscribe to, is actually the way the world is governed, whereas Trump is governing by realpolitik.
So first of all, it's been a horrible occasion for Stormer.
He looks completely out of his depth.
He is going to be probably taken away as Prime Minister by the end of this year.
It'll take a while because his party is going to not quite want to stab him in the back immediately.
For the Diego Garcia base for the Chagos Islands, I would imagine that deal is now dead in the water to hand over the territory to Mauritius.
What does it tell us about Iran?
Desperation.
Iran is that flailing child that has been refused any possible treats.
It's doing anything to try and make itself relevant, anything to try and hurt the rest of the world in order to try and seem as if it is a bigger threat than it is.
It does pose a threat, but it is nowhere near the macro that it was only two years ago, because it's been defenestrated first by the Israeli Defence Force, and then by the US and the Israelis together.
And now, therefore, they're firing missiles anywhere they possibly think they can get them, in order to get headlines, in order to worry the mainstream media.
But the reality is, the end is nigh for the Islamic regime, and the end is nigh of the Iranian threat for the time being.
What comes afterwards, of course, is a worry.
Yeah, and Patrick will continue to monitor the situation in that area, but I do want to shift our focus on over to the side of the Atlantic.
Now, Cuba is suffering nationwide blackouts after Trump cut off its oil supply and Trump is also saying Cuba will be the next target.
While Cuba is preparing a military response, what do you think we can expect and what do you make of the situation right now?
First of all, I don't think there's any reason why Trump's going to have to get military about Cuba.
Cuba is ultimately an economy that is completely and utterly stuffed.
There's no other word for it.
You were just talking about, oh my goodness, driving seasons upcoming in the USA.
And we've got $3.95 oil.
At the moment in Cuba, it's over $10 a barrel, $10 a gallon for oil, okay?
That's what's happening.
The black market is pushing prices higher.
People can't even get fuel in most cases.
The taxi drivers are looking to sell their oil because that's a more profitable way to go about business than trying to drive a taxi because nobody can afford their taxis anymore.
So therefore, you could oil at two and a half times the price of what it is at the pumps in Florida just across the water.
And what is that telling us?
Well, we know that Cubans earn a fraction of that amount of money.
The simple trick for the Americans is going to be to blockade and embargo Cuba because the end is nigh internally.
The mothers will be on the streets soon because the baby formula is going to run out.
They will be the backbone of what is going to be the next revolution.
There's no need for the US to attack.
There's no need for military action in this circumstance.
But we are finally going to see an end to the Castro regime, as indeed I have been telling you for the course of the past several months.
Well, Patrick, before I let you go, I do want to get your take on the postponed summit between Trump and China's Xi Jinping.
So originally that was supposed to take place next week.
So what do you expect will actually happen given the ongoing conflict in the Middle East?
Look, a summit is coming.
The Chinese want to take their time to digest what's going on.
They're seeing a lot of supply line upheaval.
They're obviously much more reliant upon the Straits of Hormuz than anybody else in terms of how much oil they're getting out of there.
Therefore, China moves slowly in terms of its thinking.
Trump moves very, very fast and changes his mind.
That is something China finds difficult to deal with.
So therefore, you send out your plenipotentiaries, they go and negotiate in somewhere like Geneva, but actually what happens is it's all very confused because things change. pretty much by the time they get to board their plane to go back to Beijing.
And that's causing China issues.
We're going to need things to probably calm down a little bit.
It may even be post the Cuban regime change that we see things happen.
But ultimately, there will be a summit.
China knows America is important.
China respects Trump.
It doesn't understand Trump.
That's the problem.
And that's the reason, in the main, why there's been a postponement for the time being.
