Who needs nukes to win an Oil War when Water is the key? The Front-Line Gulf States are highly vulnerable to a Water War on their desalination plants. Yesterday Trump threatened to strike Iran’s water infrastructure – practically inviting Tehran to strike back! But the Strait of Hormuz is not Iran’s only Ace in the current war.

Suddenly global markets are reeling – waking up to the reality of the unwinnable Iran War. What will a dramatic shift in sentiment mean for stocks, bonds and commodities as stagflation beckons, and Trump finds himself isolated? There is a growing risk of a liquidity shock to global markets.

Markets aren’t much concerned about Iran. US Military might is expected to prevail, cowing the Ayatollahs into acceptance of Trump’s maximalist demands. What could possibly go wrong? Trump is no student of history, and may not understand the gamut of military, logistical and geopolitical risks aligned against him.

Sometimes you have to laugh. Tariffs have been the cornerstone of Trump’s economic miracle, allowing him to deflect, discombobulate and distract voters from economic truths. Now the NY Fed says tariffs are a consumption tax – even MAGA voters will be worried as the Mid-Terms approach.

Yesterday was a strategic disaster for America. Trump and his minions have destroyed the alliances that underpinned American exceptionalism. He revealed himself as weak and venal; an old man lost in rambling hatreds. America now faces a scrabble to save face and recover a modicum of respect. The medium-to-long term market implications are huge.

It’s one year since Trump took office for a second time. It’s been dramatic. It’s been eventful – and it’s been destructive and destabilising. The winners are Putin and Xi. The losers are the West. But have we now reached peak-Trump? Europe is the key – the continent has to wake up to the coming opportunities.

Markets are deluged in noise as the President remakes the world. We’re learning to roll with it – but the trick will be to spot the opportunities and gaps that will open. President Trump’s recent demands that US banks and lenders follow his orders is one such opportunity – and may crash a critical component of the US economy’s success.

The frenetic pace of activity in Washington this week has left the commentariat stunned while dulling the market’s sensitivity to momentous events. Some of it is madness, while much of what Trump is doing makes curiously perverse sense – but what are the risks it all spectacularly unravels?

The new US National Security Strategy (NSS) revealed last week confirms just how much the world has changed. It was a kick in the teeth for Europe and leaves the door ajar on Taiwan. It’s unlikely to foster stability. It increases the pressure on Europe to swiftly rearm, and unify its defence and deterrence capabilities. For America – it raises fundamental questions about its declining power, strength, might and economic outlook.

This week will see the Fed ease rates, stocks will rally on happy retail buying any dip, and everyone will go into the holidays joyful… Except they won’t. There is so much still bubbling under the hood of the US economy that can go “bang”. Don’t watch the USA – watch China for clues.