War and Gold
Those of us who follow these things carefully (a minority enthusiasm for sure!) are so totally mesmerized by the rickety position of the banks and the government, that we might be accused of ignoring a story as big, if not bigger. So let us assure you that the prospects of war are not going unnoticed.
In fact, few things are as capable of sending precious metals prices off and running as war. It was more than a generation ago when the Iranian revolution and the Soviet invasion of Afghanistan helped drive gold prices to what were unthinkable new highs.
Today international tension persists at levels not seen since the Cuban Missile Crisis, a showdown with nuclear prospects 61 years ago this month. Today we note that, seeing the US and NATO as aggressors continually encroaching on its frontiers, Russia has embarked on a nationwide – that is across eleven time zones, by the way – nuclear attack exercise.
At the same time, President Putin is calling up 130,000 conscripts for Russian military service this fall, raising the age for conscription to 30. For its part, British Defense Secretary Grant Shapps set off a firestorm in Russia when he talked last week about sending troops from the UK to Ukraine. The imbecility of such an escalation was enough that Britain’s Prime Minister tried to walk it back, but the truth is that the UK already has special operations forces in Ukraine.
For his part, Biden wants to keep the escalation going, no matter how dicey things get. But the youth of America, as well as their parents, should know that the Deep State always has the plan to restart the draft. Here’s a single line from an Army War College journal, an article entitled, Casualties, Replacements, and Reconstitutions: “Large-scale combat operations troop requirements may well require a reconceptualization of the 1970s and 1980s volunteer force and a move toward partial conscription.”
That’s not all. The other day this story appeared from Washington: “The U.S. military on Thursday shot down a Turkish drone that had come in too close to U.S. troops on the ground in Hasakah, Syria, a U.S. official told The Associated Press.”
US troops in Syria?
Sure. Troops are everywhere, just enough to act like a tripwire and ensure we get drawn into future conflicts everywhere.
Two other notes.
First, Goldman Sachs points out that the US strategic petroleum reserves are at a 40-year low. Open warfare would scream for the reserves to be replenished quickly at any cost. Unfortunately, “any cost” is today a much higher cost. Too bad Biden didn’t think about that when he was milking the reserves for political advantage.
And secondly, this observation from David Stockman puts our burgeoning war spending into perspective:
“In 1980 the comprehensive national security budget for DOD, international operations, and veterans cost $175 billion per year, which figure now stands at $1.304 trillion. But even that is deemed woefully deficient by the Uniparty war caucus and is therefore heading dramatically higher as Washington’s warhawks and neocons push America ever closer to a needless but cataclysmic war with Russia and China.”
Gold is the world’s unparalleled wealth protection in times of chaos and war.
At today’s prices, it is clear the geopolitical risk is being almost completely ignored. That is an advantage for our friends and clients that will not last.
Word to the wise.