Geopolitical tensions are also intensifying. Violent protests in Iran could presage the eventual, though not imminent, end of the regime — a shift that would transform the Middle East, with major implications for oil prices and the threat of state-sponsored extremism. Elsewhere in the region, Saudi Arabia and the United Arab Emirates, once the closest of friends, are now at loggerheads.
It is only two weeks into the new year, and we have already been reminded how turbulent the world is. After attacking Venezuela and arresting its president, US President Donald Trump proclaimed that the US now runs the country and that its oil resources would be available for American companies to exploit. He has since escalated his threats, vowing to take over Greenland and to go after Cuba. There is little doubt that the world has become far more insecure for small states.
Following that, the Trump administration brought criminal charges against the chairman of the US Federal Reserve Bank. This shocking move escalates the clash between the administration and the central bank to a point where disruptive moves in the US dollar, US bond yields and other asset prices are more likely.
