U.S. markets complacent, USD decline to resume: Brookings

• Iran-U.S. tensions could jeopardize 20% of global oil supply through attacks on production facilities or tankers.
• Oil prices (Brent) have already risen 17-18% from $72.50 to $85, with further increases expected.
• Wall Street's instinct to downplay these shocks is 'wrong,' as the S&P 500's minimal decline indicates complacency.
• Commodity exporters (e.g., Brazil, South Africa, Chile) are winners, while commodity importers (e.g., Turkey, India, Japan, South Korea) will suffer.
• The U.S. dollar's current strength as a safe haven is temporary; its 'debasement trade' will supercharge precious metals and lead to a resumed decline once uncertainty passes.

Robin Brooks of Brookings Institution warns that Iran-U.S. tensions could lead to a 'massive supply disruption' of global oil, potentially impacting 20% of supply. He criticizes Wall Street's complacency regarding the stock market's reaction and suggests that while the U.S. dollar benefits as a short-term safe haven, its long-term decline will resume, accelerating the rise in gold prices.