“I grew up in a purely urban family. We had no relatives in the country. I’m born in 1944. When I was a baby, my mother could only buy food because she still had some gold coins. Without gold, I would have starved. She always told me that. Therefore, this generation already has a certain gold affinity. In extreme times of crisis, this is one of the few things left to be accepted. Gold was the only thing left to the people of the city at that time. Before the silver cutlery was also traded at the farmer.”
Ewald Nowotny
Former European Central Bank Governor
This commentary could have begun with any of thousands of quotes from people whose lives have been saved in times of social breakdown and war thanks to having some gold or silver on hand.
We chose the one above because of the irony that it is an account from a central banker. He was born during World War II in Vienna, which had so long been a cultural capital of Europe. “The City of Music” was a home to Beethoven and Mozart. But none of Vienna’s beauty and sophistication kept its citizens from deprivation and being ravaged in wartime – Beethoven lived there when the French bombarded – or in passing from Nazi to Soviet rule after World War II.
The world is a dangerous place. In such times people have relied on precious metals to protect themselves and their families.
While we have concentrated on the recklessness of our fiscal and monetary matters in these commentaries, the world appears to be growing more dangerous by the day. The risks of military confrontation and war can be seen in every direction.
We feel it is time now to pay closer attention to global flash points, the hot spots of incipient conflict. We have thoughts about what should be done in each case (most of which are not the preferences of the foreign policy establishment), but because our job is to help you protect your wealth, your retirement, and your family, we will just describe the rising danger we see, share a headline or two, and refrain from prescribing what ought to be done.
UKRAINE is high on our watch list.
We are shocked at how little Americans know about the rising risk of a conflict between US and Russia or their proxies breaking out over Ukraine.
In March, the Biden administration sent another $125 million in weapons to Ukraine, while it is also now sending warships to the Black Sea. Russia’s responded, warning the US to stay far away from Crimea and its Black Sea coast “for its own good.”
Russia is fortifying its presence on Ukraine’s border, while Ukraine claims dozens of its soldiers have been killed by Russian-backed fighters in the east.
Columnist Pat Buchanan describes the situation this way:
“In a single six-hour period, NATO launched 10 air intercepts to shadow six separate groups of Russian bombers and fighters over the Arctic, North Atlantic, North Sea, Black Sea and Baltic Sea….
“Joe Biden responded. In his first conversation with Ukrainian President Volodymyr Zelensky, Biden assured him of our ‘unwavering support for Ukraine’s sovereignty and territorial integrity in the face of Russia’s ongoing aggression in the Donbass and Crimea.’
“Though Ukraine is not a member of NATO, and we have no treaty obligation to fight in its defense, this comes close to a war guarantee. Biden seems to be saying that if it comes to a shooting war between Moscow and Kiev, we will be there on the side of Kiev.”
THE SOUTH CHINA SEA should be a focus of investor attention as well.
Here is a CNN story (4/10/21) from Hong Kong:
“Military activity in the South China Sea spiked over the weekend as a Chinese aircraft carrier entered the region and a US Navy expeditionary strike group wrapped up exercises.
“Meanwhile, the US and Philippines were preparing for joint drills as the US secretary of defense proposed ways to deepen military cooperation between Washington and Manila after China massed vessels in disputed waters.
“China’s state-run Global Times on Sunday said the country’s first aircraft carrier, the Liaoning, steamed into the South China Sea on Saturday after completing a week of naval exercises around Taiwan….
“The Liaoning’s reported arrival in the South China Sea came after a US Navy expeditionary strike group, fronted by the aircraft carrier USS Theodore Roosevelt and amphibious assault ship USS Makin Island, conducted exercises in the South China Sea a day earlier.”
TAIWAN remains on our radar as another China-US flashpoint.
Secretary of State Antony Blinken, on NBC’s Meet the Press (4/11/21), confirmed America’s “serious commitment” to Taiwan.
China responded the next day (4/12/21). Taiwan’s Defense Ministry claimed that 25 Chinese Air Force planes consisting mostly of fighters and long-range bombers, had entered its airspace. It was China’s largest incursion ever.
Other places worth watching:
“Tensions are rising on Friday between VENEZUELA and Colombia after Venezuelan socialist party leader Diosdado Cabello said any possible confrontation with the US would take place in Colombian territory.
“Colombia reinforced its border, said Colombian Defense Minister Diego Molano.” (Reported by AA News, Turkish News Agency.)
In NORTH KOREA, Kim Jong Un is comparing today’s economic conditions to the starvation periods of the 1990 that left hundreds of thousands dead. AP reports (4/9/21) that Kim claims Korea “faces the ‘worst-ever’ situation due to several factors, including the coronavirus pandemic, U.S.-led sanctions and heavy flooding last summer. But it’s the first time he publicly drew a parallel with the deadly famine.”
As we have pointed out elsewhere, North Korea’s most reckless behavior occurs at the times of its most serious economic stress.
“SYRIA blames Israel for missile attacks near Damascus.” An Aljazeera headline (4/8/21).
We could go on, but we think that is enough to make our point: We are at Cold War levels of international tension. It is a very dangerous world right now. It is in the eruption of just such tensions that prevailing monetary structures are upended and that people find owning gold and silver to be a life-sustaining strategy for the protection of themselves and their families.
We at Red Rock Secured are here to help.
Learn why gold and silver are central to protecting your family, your wealth, and your retirement from uncertainty. Let us provide you with a free one-on-one consultation.
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