Most important take away

The Iran war has reshuffled traditional safe haven dynamics: the US dollar has regained its safe haven status after losing appeal during 2025’s tariff turmoil, while gold — despite years of strong performance — has underperformed due to liquidity needs, physical movement constraints amid the Strait of Hormuz closure, and investors needing cash to cover near-term obligations.

Chapter Summaries

What Makes a Safe Haven Asset

Joe Weisenthal explains that safe haven assets are those not correlated to the business cycle or growth. Classic examples include gold (thousands of years of monetary use), US treasuries (guaranteed coupon payments from the US government), and the US dollar (low historical inflation, universally accepted). Investors gravitate to these when risk assets like stocks become unattractive.

The Tariff Turmoil vs. The Iran War

During the 2025 tariff crisis, the dollar weakened because investors viewed the US as a less attractive place to invest — not a reflection of its safe haven properties. The Iran war is fundamentally different: investors are driven by fear and uncertainty about how far the conflict could spiral, making the dollar attractive again as a pure safe haven where people want to park money they expect to retain value over years.

Treasuries: A Push-Pull Dynamic

Treasuries face competing forces. Their safe haven appeal (guaranteed US government payments) is offset by inflation concerns — oil price spikes, war-related fiscal spending, and resource strains like ramped-up missile production are all inflationary. If inflation exceeds coupon yields, treasuries become money-losing investments. However, in extreme fear scenarios (VIX spikes), investors may accept negative real returns just for the certainty of getting principal back, similar to paying for a safe deposit box.

Why Gold Is Underperforming

Gold has rallied significantly since 2022 driven by high inflation, geopolitical tensions, and de-dollarization concerns after Russia’s sanctions. During the Iran war, gold has lagged for several reasons: investors in crisis need dollars to pay immediate bills (rent, utilities, etc.), prompting liquidation of profitable gold positions; gold is physically heavy and costly to move; and the Strait of Hormuz closure makes physical movement of assets more difficult, undermining one of gold’s core appeals.

Summary

Actionable Insights & Investment Considerations:

• US Dollar is currently the preferred safe haven. The war environment has restored the dollar’s safe haven status. Investors seeking shelter should consider dollar-denominated cash or money market positions as a near-term hedge against geopolitical uncertainty.

• Treasuries are a mixed bag. While they offer guaranteed payments, inflation risk from the war (oil spikes, increased defense spending, resource constraints) erodes real returns. Investors should monitor the VIX — a major spike could trigger treasury buying and price appreciation. Short-duration treasuries may be preferable to limit inflation exposure while retaining safe haven benefits.

• Gold may present a buying opportunity for long-term holders. Its underperformance during the crisis is largely driven by short-term liquidity needs and physical movement concerns, not a fundamental change in its value proposition. Investors with sufficient cash reserves who can ride out short-term volatility may find current gold prices attractive relative to its multi-year uptrend.

• Oil prices have spiked due to the war and the Strait of Hormuz closure, contributing to broader inflation concerns. Energy exposure is an implicit hedge on war escalation.

• Bitcoin gets a passing mention as an asset that, unlike gold, can be moved digitally anywhere in the world — a potential advantage when physical movement of assets is constrained by conflict.

• Key risk factor to watch: Whether the war spirals beyond its intended scope. Wars historically tend to expand even when meant to be contained, which would further strain resources, increase inflation, and intensify safe haven demand.

• De-dollarization theme remains relevant. The 2022 Russia sanctions prompted global reserve managers to diversify away from dollars into gold. This structural trend hasn’t reversed, but short-term crisis dynamics are temporarily favoring the dollar.