Today, Gold prices shot higher as the threat of shots being fired in the Russian/Ukraine conflict, heightened. The markets also slipped at the hint of higher oil and gas prices. Russia is the second largest exporter of oil in the world. A disruption in supply is deemed a threat to our economic stability.
I find it most curious. Of all the impetus both gold and the markets could respond to, that it is a Russian conflict that has become the trigger that sends gold and the markets in opposite directions.
I have spoken many times about the massive accumulation of gold by the BRIC nations. Brazil, Russia, India and China. As though they are preparing for something. Have they been preparing for isolationism? Do they fear it? According to Eric Sprott, billionaire fund manager, gold has been leaving the West en masse and winding up in the central banks of the East. Russia included. If it be true, that the West is almost out of gold and the East now holds hoards, then any attempt to isolate Russia from the G8 or Western Economies, would be like throwing Br’er Rabbit into the briar patch. Remember! He who holds the gold makes the rule – economically speaking that is.
I also find it curious that Russia called on China to support its actions in the Ukraine. Support that China has since offered, saying Russia’s actions are reasonable under the circumstances.
Since the threat of conflict in this region arose, one has to seriously consider what an alliance between Russia and China could mean to our markets and our economy. Between Russia and China, they have plenty of gold, plenty of oil and plenty of military might. I think we should be a little nervous. I don’t want to be Chicken Little but plenty of debt is no match for hoards of real money and real assets.
Surely debt is our weakness and everyone knows it. Otherwise they wouldn’t call it “kicking the can down the road.” That very statement implies there are dire consequences ahead for our massive accumulation of debt. Debt has us weak in all ways and there may only be one way to defend against its consequences – Precious Metals! You can’t print more gold or silver and neither has ever been worth zero. That’s why I think Russia is Putin’ gold on the spot. Own it now or forever give up your piece of prosperity.
As always, these are just my thoughts and opinions and I know this is Putin’ me in the minority. But if you agree, I would be honored to have you follow me @DaveTheGoldDr.