Core Viewpoint - The article discusses the implications of the recent US-Israel military actions against Iran, highlighting the potential for prolonged conflict and its impact on global geopolitical dynamics and asset pricing. Group 1: Reasons for Prolonged Conflict - The current military actions represent a shift in US strategy from targeting Iran's nuclear capabilities to regime change, indicating a fundamental change in the nature of the conflict [1]. - The timing of the military strikes coincided with negotiations, eliminating any potential for diplomatic resolution and escalating the conflict into a civilizational clash [2]. - Unlike Syria and Libya, Iran's regime is supported by a strong military foundation, making rapid regime change unlikely [3]. Group 2: Iran's Military Capabilities - Iran has developed a self-sufficient defense industry due to decades of sanctions, making it difficult for external forces to dismantle its military capabilities [4]. - The cost-effectiveness of Iran's military assets, such as drones, allows it to sustain prolonged conflict at a lower financial burden compared to its adversaries [4]. Group 3: Political Dynamics in the US - The Trump administration faces internal pressures regarding the legitimacy of military actions without Congressional approval, complicating the conflict's management [5]. - There is a growing divide within Trump's support base regarding the military actions, with some allies opposing the conflict as contrary to "America First" principles [5]. Group 4: Global Economic Implications - The conflict is expected to reshape global economic models, with a potential shift in how national power is assessed, moving away from traditional economic indicators to military and strategic capabilities [10][25]. - China's strategic position is likely to strengthen as it remains militarily unengaged while being a major manufacturing power, similar to the US during World War II [11]. Group 5: Asset Pricing Impact - The conflict has already led to significant volatility in energy prices, with Brent crude oil experiencing sharp increases due to supply fears [13]. - Global stock markets have reacted negatively, particularly in regions heavily reliant on energy imports, with notable declines in indices such as Japan's Nikkei and South Korea's KOSPI [15]. - Gold prices have shown unusual behavior, initially rising but then experiencing a pullback due to liquidity issues and market dynamics [20][21]. Group 6: Investment Recommendations - There is an anticipated increase in demand for resources and energy infrastructure, suggesting a favorable outlook for commodities like copper and rare earths [27]. - The military and technological sectors, particularly AI and drone technology, are expected to see growth as the conflict continues [28]. - Hong Kong's position as a financial hub may be re-evaluated, with potential for valuation recovery as it serves as a bridge between Chinese manufacturing and global capital [28].