Let's talk about a roller coaster.

After several days of slumping, stocks soared Wednesday afternoon following President Trump's announcement of a suspension of tariffs. The S&P 500 soared 9%, posting its third largest daily gain since World War II.

Gold also fluctuated after falling below 3,000 dollars an ounce, but the yellow metal recovered most of its loss and closed above 3,100 dollars.

It is difficult to know what will happen next.

The only thing that seems certain is uncertainty.

Market volatility spiked with the onset of the trade war. The VIX volatility index soared to 57.85 on April 9. To put that in perspective, it rose to 66 during the early days of the pandemic and to 79 in October 2008.

While the volatility index cooled slightly after the announcement of the tariff suspension, there is still a lot of uncertainty and nervousness in the market. We are just one announcement away from another round of market chaos.

Do you know what markets and companies dislike?

Uncertainty: What is the uncertainty of the regime?

We are in a period of extreme political uncertainty. Whether you are an investor, businessman or entrepreneur, it is extremely difficult to plan for the future under these conditions.

Regime uncertainty describes a lack of confidence in the direction of a government's future policies with respect to taxes, regulations and, in more extreme situations, the protection of property rights and the consistent application of the rule of law.

When people are unsure of what the government will do next, or if they fear a sudden change in the rules, it discourages long-term investment and economic activity.

The uncertainty of the regime tends to foster paralysis by analysis. People become obsessed with trying to figure out what might happen next and end up doing nothing, adopting instead a "wait and see" attitude.

For example, during the Great Depression, President Franklin D. Roosevelt created great political uncertainty by implementing the New Deal. Regulations and policies changed drastically. Businesses felt insecure in the face of increasing federal government intervention in the economy through price controls, taxes, labor laws and other economic policies.

Economist Robert Higgs argued that this "regime uncertainty" prolonged the Great Depression by discouraging private investment. In his words: "Between 1935 and 1940, this issue became of paramount importance. So many businessmen and investors lost confidence in their ability to predict the future property rights regime that few were willing to risk their money on long-term investments."

Ultimately, long-term economic growth depends on predictable rules. Sudden changes in taxes, regulation or property rights cause companies to adopt a defensive posture.

While falling short of Roosevelt's level, Trump's negotiating tactics are a breeding ground for uncertainty about the regime. Will the 90-day pause really last? Will exceptions be introduced? What will happen in 90 days?

No one knows.

Navigating regime uncertainty

How to navigate in the face of this type of uncertainty?

If you have a business, especially one that depends on imports, I don't know what to tell you.

But investors can weather this storm if they keep a few things in mind.

Don't panic. You will see large fluctuations in the market. Resist the temptation to react impulsively to daily fluctuations. It's easy to get carried away by emotions. Don't get carried away.

Focus on the fundamentals. The trade war is playing out in a broader context. Those fundamentals remain. We continue to have an inflation problem. We continue to have de-dollarization. We continue to have a lot of bubbles in the market. We continue to have massive amounts of debt. The laws of supply and demand still apply. It is important to focus on the big picture and not get too carried away with the latest headlines.

Gold and silver are a symbol of stability. This does not mean that their price does not fluctuate sharply on a daily basis. But gold and silver are fundamentally money. They have been for more than 5,000 years and will remain so when trade wars are a distant memory. Gold and silver are the ultimate safe havens.

They are generally protected from regime uncertainty because there is no counterparty risk.

 There is no telling what the future holds. But you can be sure that gold and silver will continue to be valued and desired around the world.

Mike Maharrey , Money Metals