Over half the world is in armed conflicts.
Don’t believe me? Look at this map.
All the countries colored on the map are in some sort of armed conflict.
Source: the Uppsala Conflict Data Program
The number of skirmishes outside their borders is increasing, too.
It rose from 58 in 2008 to 91 in 2022.
With the outbreak of the war between Israel and Hamas in the Middle East, and the war between Ukraine and Russia showing no signs of slowing down… We’ll likely see even more conflicts in 2024.
These regional conflicts could expand into a wider global war… with the U.S. and its allies backing Ukraine and Israel, and Russia, China, and Iran backing militant groups like Hamas and Hezbollah.
China could even use these regional wars as a distraction to invade Taiwan.
And if that happened, the U.S. would likely use force to defend Taiwan and its advanced semiconductor manufacturing facilities.
The stage is set for more conflict in the coming years.
I’m not saying this to scare you… but to prepare you. So you can come out of this era of international conflict better off than you went in.
We’re in the Fourth Turning
In 1997, historians William Strauss and Neil Howe released a book called The Fourth Turning.
The book focuses on “generational theory.”
Generational theory suggests the world goes through a saeculum every 80–100 years. (A saeculum is simply a long period or age.)
Each saeculum consists of four stages, or “turnings.” They are the High, Awakening, Unraveling, and Crisis.
These turnings happen like clockwork.
Each cycle begins with a post-crisis High (First Turning).
This is a renewal of community life, period of stability, and recognition of the things lost in the preceding crisis.
The most recent High was the 1950s. That’s when America rebuilt itself after World War II and solidified itself as one of the world’s superpowers.
The second turning is the Awakening.
This is when the mood shifts to defiance and spiritual discoveries. We need to look no further than the 1970s and the hippie movement. We could say this began around the time of the Woodstock festival.
The third turning is an Unraveling.
This is when people grow more distant from one another and become more individualistic. This began with President Ronald Reagan’s upbeat “Morning in America” campaign in 1984 and then peaked with the dot-com bubble in the late 1990s.
The fourth turning – and the most important turning for this essay – is the Crisis period.
This is an era of upheaval when the values regime replaces the old civic order with a new one. These are ushered in by a period of economic disruptions, social discontent, and are usually completed with a major conflict.
The last completed cycle started with the Great Depression in 1929 and ended with the conclusion of World War II in 1945.
And these Fourth Turnings happen with alarming regularity…
World War II ended exactly 80 years after the U.S. Civil War. And the Civil War ended 82 years after the American Revolution.
We saw a turning in the early 1700s when King William III of England defeated French King Louis XIV during the Glorious Revolution.
Nearly a century before that, England defeated the mighty Spanish Armada to become the dominant global power. And 90 years earlier, England nearly tore itself apart during the War of the Roses.
The expression, “History doesn’t repeat, but it often rhymes” rings true here.
And while the events are never the same from one crisis to the next, the events leading up to them all have similarities.
We’re in a New Fourth Turning
By recognizing these past events, Howe and Strauss were able to make this prescient prediction in their 1997 book:
The next Fourth Turning is due to begin shortly after the new millennium, midway through the 2000s. Around the year 2005, a sudden spark will catalyze a Crisis mood.
Nine years later, the U.S. housing market peaked. That sent the U.S. into a housing crisis, which led to the Great Recession. That kicked off the Fourth Turning.
In the updated version of the book called The Fourth Turning Is Here, Howe predicts this Fourth Turning will climax around 2030.
If he’s right, we can expect many more conflicts to arise along with increasing social discontent. And when the dust settles, the world order could look very different.
It could be a battle between America and its allies against Russia, China, Iran, and their allies. Or it could be some sort of civil conflict within the United States.
Whatever the Fourth Turning is, you can take steps to protect your wealth now.
This Commodity Will Soar If Conflict Expands
In times of conflict, you can expect rising inflation. Conflicts disrupt supply chains. This increases prices – especially commodities.
One commodity that could skyrocket in price is oil.
Daily editor Teeka Tiwari wrote about this in the November issue of The Palm Beach Letter:
The Middle East produces 31% of global oil. That’s why every time there’s a war in the region, oil skyrockets.
Just look at what happened during the Arab-Israeli war of 1973. The Arab states imposed an embargo in retaliation for U.S. support for Israel. In six months, the price of oil rose by nearly 300%.
A similar situation played out when Iraq invaded Kuwait in 1990. During this relatively small incursion, we saw the price of oil more than double from $17 per barrel to $36 a barrel in just three months.
It’s no different today, friends. Iran is already calling for an oil embargo on Israel. So we could see oil soon trade above $150 per barrel.
In the event of a global conflict, the Western Hemisphere will likely remain relatively unscathed from fighting. (We doubt China and Russia have the military capability to invade the Americas.)
So we suggest you look for oil companies with an established history of profitably drilling in the U.S.
One exchange-traded fund (ETF) that has companies primarily operating in the Western Hemisphere is the SPDR Oil & Gas Exploration & Production ETF (XOP). If oil prices surge higher, this ETF will follow.
In you want an oil company with more upside, Teeka has released his No. 1 oil stock for 2024.
The company gets 98% of its oil from within the borders of the United States. It has a stable portfolio of high-performing wells. And it’s among the lowest-cost producers of shale oil.
You can get more details right here.
We may not know exactly how the Fourth Turning will play out this time.
But regardless of what happens, I’m betting on U.S. oil companies to help us achieve energy independence so we won’t have to rely on foreign oil during the next global conflict.
Analyst, Palm Beach Daily