A World on Edge

September 4, 2000

The price of gold is poised to explode because the world is poised to explode. The precious metals big bang theory in action. As we enter fall 2000, there are three or four, at least, flash points likely to impact precious metals markets. These flash points will ignite a fuse of desire that cannot be fulfilled. There is simply not enough physical gold or silver in the market to deal with the kind of demand a series of looming political crisis' will create. The market is short; the shorts will get pasted. The shorts are going to look like roadkill in the near future. Global forces of intense passion are building that are not amenable to diplomacy, bribery or persuasion. Once these forces are unleashed they will have unpredictable results upon our so called New World Order. The only thing predictable is uncertainty. Uncertainty always leads to an increased desire for things that are certain, stable and predictable. In economic terms, this means precious metals.

My old friends the Chinese are even more intent on global domination than I foresaw a few months ago. A short summary of their actions reinforces my conclusion they are preparing a first strike upon the continental United States. Here's the list: Control of both ends of the Panama Canal, infiltration of Chinese young men(read fifth column) into Panama, construction of a large container port in the Bahamas Islands, shipment of thousands of containers there(probably full of weapons), continued threats against Taiwan, including a naval blockade, further weapons purchases from Russia, political discussions with rogue states on a bipolar world (read anti United States), political incursions into South America and Africa, stationing of "workers"-read combat troops- in Sudan to protect oil supplies, etc. etc. etc.

The upshot of all this Chinese activity is they are very well positioned to take the United States with one quick blow. The child king is allowed to station 10,000 troops in the Panama Canal Zone, yet he has pulled them all out. At the same time he has done this, the Chinese are upsetting the Panamanian people with thousands of illegal young Chinese men pouring into Panama. Again why? The Chinese are smuggling thousands of young men directly into the United States. Why? I'll give you one good reason that starts with w and ends with an r. Anyone else see the implications here? What do you think the dollar will be worth if the Chinese seize the Panama Canal or start blowing up the four bridges over the Mississippi River that carry most auto and train traffic? Be glad you owned gold then I bet.

The MidEast is also just quietly percolating away towards a mid September explosion. I've seen absolutely nothing to indicate that any kind of a deal is going to prevent a September 13th PLO statehood declaration. Plenty of shuttle diplomacy, even a meeting later this week in New York at the Millennium Summit between Arafat and Barak, but no concrete progress to report. For all the Egyptian talk of declaring Jerusalem a "divine city", or an "international city" or whatever, the blunt truth is the world is going to get a hernia trying to pick up Jerusalem and deal with it. Once the world figures this out, and figures out time is up we should see a move towards precious metals. If nowhere else, at least the MidEast will turn to gold as street fighting erupts in downtown Jerusalem. With two weeks to go just how likely is street fighting in downtown Jerusalem, you may ask. The answer is it's possible and inching toward probable. The Jewish settlers in their West Bank settlements must think so since they are requesting heavy machine guns. The PLO must think so since they are building tank traps along the main roads. Maybe the elite will open their checkbooks and try to buy peace as in 1979. Maybe even they could find some Arabs to sell out their claim to Jerusalem. But I don't think so. The Arabs want Jerusalem. The Jews own Jerusalem. I think it's out of the politicians hands at this point. Even if a bloodbath is avoided this month, the long term issue remains. No, precious metals will be in great demand in the MidEast as the tension level rises.

The third political flashpoint is Kashmir. Nuclear armed India and Nuclear armed Pakistan are still right on the edge. There have been several massacres in the last few weeks that show things are as unstable as ever. So, in addition to everything else, keep your eyes on Kashmir and hope there isn't a radioactive glow over it someday soon.

Finally, we come to Russia. Central Asia is being hammered by Islamic fundamentalists surging out of the Taleban controlled Afghanistan. Russia now faces a wave of Islamic militants all the way from the Chechens in the West to the Ubekistanis in the east. One of the gold eagle pundits commented that it took a Russian invasion of Afghanistan in 1979 to get gold to $800 in 1980. Well now goldbugs, don't be surprised if the Russians invade Afghanistan a second time. Only this time they will be using nerve gas and be going for genocide. The world should clearly understand that RasPutin is quite willing to do whatever it takes to control both the oil and maintain political dominance in Central Asia. I'd bet a few thousand canisters of nerve gas on that one. If anyone had any doubts as to Mr. RasPutin's leadership qualities, they were amply demonstrated during the Kursk submarine sinking. The actions of a psychopath in my estimation. As Colonel Ludev points out, Putin knew the fleet was falling apart and he sent it out to sea anyway. Why should anyone be surprised when disaster struck? Neither should the American people be surprised when our poorly trained, supplied and motivated military is deployed and quickly slaughtered. What do you think will happen to the fiat dollar, and indirectly gold, then?

Well, a lot of things are coming to a head in the world this fall. The Internet is rife with rumors the child king will declare dictatorship on October 15th. Executive order 25 or some such thing giving him eternal political power over the long suffering American people. We'll see. Any one, or all, of the above mentioned flash points could explode this fall. I don't believe gold or silver can go up until the dollar goes down. The types of things listed above are quite capable of calling into question American political and military leadership. Once that happens, our economic leadership will also come into play. I'd like to be listening to Alan GreenSpan trying to figure out where he will get the gold when that happens.

The world’s gold supply increases by 2,600 tons per year versus the U.S. steel production of 11,000 tons per hour.

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