Trump has an unusual knack of doing the unthinkable without thinking through the full implications on everyone else. This time round, he is deep in the folly of hubris, because after the easy success of seizing President Nicolas Maduro in Venezuela, he may have been persuaded by Israeli Prime Minister Benjamin Netanyahu that regime change in Iran is possible for a quick win. If he succeeds, the US is back in full control of global oil and gas, the dollar will strengthen and his Make America Great Again (MAGA) vision will be celebrated wholeheartedly by financial markets.
The Ukraine and Iran wars have confirmed that finance, economy, technology and warfare are deeply interconnected. The US is waging a technologically superior war against Iran, but the smaller Iran (93 million people) is fighting back with asymmetric warfare using cheap and plentiful drones and missiles, plus a tenacious economic war by closing the Strait of Hormuz. How markets will perform will depend on the outcome of the current conflict. Drawing inspiration from my favourite Italian Spaghetti Western movie, The Good, the Bad and the Ugly, starring Clint Eastwood, I lay out some possible scenarios, without predicting which one will play out. You decide for yourself.
The “brilliant” outcome is what Trump and Netanyahu hope for — a quick decisive win for them, regime change in Iran with new pro-West leadership that sues for peace, renewed unipolar order and dollar dominance unchallenged. Global financial markets, led by the US stock market, will cheer.
However, after being sanctioned and isolated since 1979, suffering a brutal war with Iraq (estimated half a million killed) and then continuous conflict with Israel, Iran is prepared for an existential long-haul war. After the devastating 12-day war in June 2025, when Trump ordered air strikes on Iran to neutralise its nuclear and missile production facilities, Iran has dug in for a highly costly war of defiance and attrition. This is a kamikaze strategy that inflicts maximum damage to the enemy even at the point of suicide.
See also: Trump threatens escalation with sides at odds on peace talks
The chances of a brilliant outcome, therefore, may be negated by Iran’s determination to fight on, with new leaders probably more hardline than those assassinated.
The “good” scenario is a continuation of the present, with the Dow Jones still 5% from a record peak and March 2026 stock trading turnover 50% up from March 2025. A ceasefire is reached, Trump declares a quick victory, the US Federal Reserve cuts interest rates, oil prices settle at the US$60 per barrel or lower range. The world economy continues to muddle along with Brics seeking to strengthen their position to create a more balanced multipolar world. As long as central banks continue to print money with loose fiscal policy, financial markets will continue to do well for companies that earn good profits.
The “bad” scenario is one in which Iran inflicts severe damage on both Israel and the US in terms of loss of critical infrastructure and sinking naval ships or bases with unacceptable loss of American lives. If this drags on, the world will see a decline in American power and prestige. The dollar will weaken and financial markets will witness a shift out of US assets towards other markets as part of global asset diversification.
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The “ugly” or disaster scenario is one where nuclear weapons are deployed, and the world enters a new phase of cataclysmic uncertainty. If atom bombs, however small, are deployed, events may escalate to a full nuclear World War III. At that point, to blind the enemy, communication satellites will be destroyed, undersea cables cut, global internet will be disrupted, and goodbye, cryptocurrencies. The damage to global financial markets will be devastating as they run on real-time financial information. The world will fragment into regional pockets: those that are nuclear-contaminated will go into decline, while those that are self-sufficient in food, water and energy may survive.
I do not want to be alarmist. But with such disparity in possible war outcomes, we need to think through the fog of war on how to preserve our wealth and income during periods of radical uncertainty.
Is there a historical precedent to preserve wealth during uncertainty?
The Jewish Wealth Rule or Rule of Thirds, practised by families like the Rothschilds, originates from Talmudic teaching of 1,500–3,000 years of history. This wealth survival rule advises dividing wealth into three equal parts: one-third in land (real estate), one-third in business (commerce or trade) and one-third in liquidity (cash or reserves).
With land you can grow food, access water and energy, and have protection against inflation, and even use it for business. The rule does not specify what business you should invest in, but presumably you invest in areas of comparative advantage. Chinese family wealth doctrine passes the assets of land and business to the eldest son or most capable member of the family. Liquidity in cash, gold or bank deposits enables the investor to take advantage of market opportunities, and hedges against liquidity crises or forced sales situations.
The Wealth Survival Rule enables the family business to endure long cycles of boom and bust, which may even avoid the “third-generation curse” by ensuring that each generation preserves knowledge, skills and assets despite tendencies to spend it all during prosperous times. The Chinese have a saying that wealth rarely survives three generations: One generation makes it, the second generation preserves it, and the third generation spends it all. Having a generational Wealth Preservation Rule makes a lot of sense not just for families, but also nations.
America is facing its existential generational crisis. After becoming the benevolent hegemon at the end of World War II in 1945, it was generous to the losers and the weakened winners, such as the UK, but forced the European powers to divest their colonies so that no other empires could challenge American power. Eighty years later, American power is not just military, economic and technology-based, but also anchored by the dollar, which enables America to borrow resources from the rest of the world. This is both an exorbitant privilege and a curse. Too much debt, and America must move to what Stephen Walt calls “the predatory hegemon”, extracting protection money from allies and enemies alike. Holding dollars could be feeding that hegemon. That is the curse of the existing system.
Gertrude Stein famously said that money is always there, except in different pockets. Caveat emptor — investor beware.
Andrew Sheng writes on global issues from an Asian perspective. This story first appeared in the March 23 issue of The Edge Malaysia
