With America’s unprecedented abstention from a U.N Security Council vote condemning Israel, Obama has stabbed a steadfast and loyal ally in the back, radically destabilizing the geopolitical world ahead of Trump’s inauguration and setting the stage for possible all-out war in the Middle East. That’s quite a feat for a lame-duck president who had already clinched his place as the worst U.S. president — by a country mile — in history. The full repercussions of the vote are incalculable at this point, but even Obama’s supporters would be hard pressed to deny that his vindictive decision to break with longstanding U.S. policy toward the U.N. has made the world a far more dangerous place. Israel’s enemies will surely have been emboldened by the vote. And Israel, with nothing to gain from negotiating with an enemy sworn to Israel’s destruction, will likely flout the U.N. — and the world — by annexing territories won by Israel in wars started by her enemies.
Trump and his Republican backers in Congress will face a dangerously polarized world when he takes office on January 20. Even now, the perceived difficulties of dealing with what Obama has set in motion could overshadow any hopes Americans had of an improved climate for business, lower taxes and fewer regulations. Early in 2017, all of these things will take a back seat to maintaining peace in a world that is looking increasingly like Europe, circa 1937. The situation could grow even worse before Trump takes office if, as has been reported, France convenes an international conference on January 15 to hammer out the framework for a two-state ‘solution’ that presumably would be imposed on Israel. Even now, based on the resolution just passed, Jerusalem’s Old City, including the Temple Mount and the Western Wall, have been designated as occupied Palestinian territory. The resolution also negates the possibility of Israel trading land for peace, a key feature of the Oslo accord; for in point of pact, the resolution implicitly denies that Israel owns any land that it might trade for security.
No one but a fool could expect Israel to take this lying down. And they haven’t. The Netanyahu government has just approved 5650 new homes in the West Bank and Jerusalem. If they were now to announce the annexation of territories won through conquest, Trump would have his hands full managing the fallout when he takes office.
From an investment standpoint, the U.N. action was a game-changer. For one, it will likely cool the steep run-up in stocks since the election. As such, we will look very seriously at short-sale opportunities in the days ahead. And for two, gold and silver may be about to turn. Although I’ve been using an $820 downside target for gold that remains viable, I will nonetheless be watching for the subtlest technical evidence that bullion’s five-year selloff is over. The world has never looked scarier to me, and Obama’s subversive, incredibly reckless parting shot has made it still moreso. Under the circumstances, for the first time in decades, bullion may actually be a buy on geopolitical news. While it may be possible to undo Obamacare and other policy disasters hatched by the President, the global crisis he has set in motion by having the U.S. abstain from the Security Council vote will be far more difficult to deal with.