In politics, it is said, nothing happens by coincidence. Not to say there are not lots of coincidences, there are, but where things matter, someone has always taken care (ahead of the fact) to remove the element of luck from the outcome.
So when I invest and trade I look at coincidences in a different kind of way. Cui bono, or who benefits, is a good guide to forming better judgment. If , say, a high ranking politician is caught in corruption, his exit creates a vacancy which is soon filled by the next winner, and suspicion for the unveiling of the ex-boss’s activities falls naturally upon the successor.
But that approach of looking towards the beneficiary of events may fall foul of a deliberately placed misleading trail of breadcrumbs. After all people get framed for things they did not do. Therefore a strategy must be used to take account of this tendency. Underneath the layer of reasoning which is Cui bono? This sub-layer of reasoning is who benefits from the first loser’s move down the ladder of life and power, and the move up of the successor? Our search has now gotten to the second derivative, the one who benefits from the new good fortune of the one who benefits. And so it goes down the line.
But for the one who loses, the opposite occurs. That leader’s courtiers and backers suffer a loss of power and influence, and wealth as their prize fighter drops to a lower league.
Did I just say prize fighter?
That’s interesting because a prize fighter has a team behind him. He represents others outside the ring. There is the fighter of course. There is a trainer or coach, a business agent, a promoter or media person to manage the fans and generation of fame. There must also be a medical advisor, and we could expect a financial backer too.
That’s for a prize fighter, but behind a Formula One driver there would be a similar backing force. If the prize fighter was a regiment of armed forces, then each “person” previously identified would become a department, or a group of many hundreds of individuals doing that function.
Even in "Star Trek" there was Captain Kirk the leader, intelligence dept Mr Spock, "Bones" the Medical Doctor, "Scotty" the skilled engineer, Sulu the skilled pilot , also Uhura the navigation and communications expert ... and they were all serving the commands of "The Federation" You get it. This pyramid structure is a universal thing, present in unique forms within all of society, but also present in the same but smaller form in local society. It’s a self similar fractal form that goes with human activity in all places, sizes, and times.
If that’s so, then what about the gold market?
What indeed? Let’s just have a look.
Out on the frontier there are the miners, like pathfinder squadrons of scouts, suffering losses and making them good and persevering on.
For the advisory function we see suitable people-corporations with specialist expertise: there are the geologists, engineers, and transport logistics people.
There are other expert functions. The freshly mined gold has a big industrial complex of its own. Refiners refine it, security firms carry and store it. There is an insurance industry which borders upon the financial side of things, but I’ll call it a storage partner for the moment. Also, there are skilled fabricators of beautiful jewellery desired and subsequently bought by end users the world over ... the prize fighter’s “fans” of the above simplified example.
For the sales of gold we can see financial advisors, jewellery shops, and a whole marketing industry to place desirable images of the beautiful end product, and creating psychological ideas of the success and desirability of those who own and-or wear it.
So who benefits from gold? Well, I guess everybody to a greater or lesser degree.
But does anybody benefit more than the others?
Well in every field of human endeavour, in which great teams are employed, someone usually benefits more than the others. It is not always the one visible at the top of the fame pyramid. It is more likely to be the one at the top of the organizational pyramid, which could be a less visible pyramid than the other one.
So in the case of a great war, the emperor or king who lead the winning army might be the accredited winner. But we know better. We know that inside the apparatus of that emperor or king’s army, or court, or state, someone else might have done very well out it the victory too. We know who the losers are ... the leadership of the defeated country, and the worst losers are the frontline operatives of the defeated state.
I just said “state”. Is the “state” the ultimate winner? Well you might say so. I mean, in Roman times, the occupied countries were essentially enslaved, conscripted, and their resources, like eg silver mine output were asset stripped. And the Roman emperor, whoever he was at the time, certainly he had a high standard of living. But so did his court, all those Roman senators and their families. They lived like kings too. How did the Roman soldiers do. My understanding is they did fine, given their station in the organizational structure. They were paid, clothed and fed. They certainly did a lot better than their colleague soldiery working for the opposing countries which Rome defeated and subsequently occupied.
Let’s also consider the average Roman citizen. They paid taxes which apparently rose as time went by, and at the end they apparently welcomed in the armies which ultimately broke the Roman Empire, so high and onerous had the taxes gotten by then. But it could be said that for several hundred years, the average Roman citizen did ok, and a lot bit better than the “citizenry” of the countries which faced up to the might of Rome, but lost.
All that sounds so similar to life on planet Earth today with the elevated living standards of the west vs the east I could get distracted from my point very easily, but let’s move onwards and follow this line of thought a little more.
The ultimate winners (during the Roman Empire) were concentrated at the top of the organization, but the whole organization did ok, and better than those it defeated. Can we identify anyone who did “best” out of the whole thing? That’s not all that clear from history. If anyone did better than the leadership, lack of records indicates they must have deliberately kept a low profile. One can look at who owned land, large buildings, was educated, etc for clues.
As an aside, did you know that in the days of Rome, the bankers also were tasked with collecting taxes for the state?
Another aside: the modern corporate takeovers and asset stripping of victim businesses, saddling them with debt, removing assets, and imposition of unjust and crazy management fees, is almost exactly the same business model as the Roman takeover-enslavement of victim occupied territories and their populations.
The Ultimate Winner is the Last Man Standing
This is an interesting principle to apply to the history of human society, both archaic and recent. Actually if history is sufficiently recent, we could call it today’s news, couldn’t we?
So let’s look at the last man standing from a power-wealth point of view. Well the personality, or the political leader, who always does very well at the top of their pyramid, well that individual or their court do very badly if another conquering heroic power displaced them. So Napoleon ended up exiled to an island, but it could have been worse. It was much worse for Louis XIV and for the Romanov family and Julius Caesar! A lot of the Roman leadership were assassinated to end their reign. Saddam Hussein and Muammar Ghaddafi ended up badly. As did Kennedy, Lincoln, Garfield, McKinley, Kind Abdullah of Jordan, Anwar Sadat of Egypt, Mohandas & Indira Gandhi of India, Mohammad Ali Rajai of Iran, Yitzhak Rabin of Isreal, Benazir Bhutto of Pakistan, I could go on. Have a look here and see how long the list is: https://en.wikipedia.org/wiki/List_of_assassinated_people
Now I'd be the first to agree that if you looked at a list of the unfortunates who served in the armies of the ages, that list of those who died there would be endless.
So we could co-opt popular phrases to describe the realpolitik situation:“It’s Cool To Be The King” but at the same time “It’s Tough At The Top”! And it might be sensible to add “It’s worse at the bottom”. The little countries which were unfortunately geographically located close to imperialist countries seem to have had the worst deal of all down the ages. "Check out the neighbours before buying a new house" might be a bit smartass for those countries which were serially invaded, but it has a certain truth to it.
So looking at it all this way a certain pecking order emerges, which was always there, I’m merely highlighting it from a certain narrow viewpoint today.
But I have a feeling that the concepts embodied in the phrase “The Ultimate Winner is the Last Man Standing” have not yet been exhausted.
For instance: What about the groups or people who preserve their assets as one empire or king or leader goes down, and have such a base of wealth and power to capture a favoured place in the new regime or leader or empire? Now that would be a great thing to do, wouldn’t it?
So how about we modify that “last man standing” thing slightly? There are many ways to put this, each with their own nuances. How about: “the organizational niche that continues after the old organization is gone”. Yes. How about that?
Let’s see ... after an empire fails, first, who is still standing? ... Yes. But secondly, and more importantly, ... of those who are still standing after a regime change .. which of them still retain their assets? That is success through time!
Well the Roman Catholic Church once controlled empires, via their kings and queens, and it’s still there. So it's pretty good at trans-regime continuity. The Knights Templar lasted through many regimes and centuries until King Philip decided he wanted their money more than they did, and could take it too. That was a terminal event for the lives of many of the Templars. They had a religious-banking model. Come to think of it, the Vatican is into banking too. The Romans adopted Christianity, and they lasted a long time. They had a Christian-capitalist-military business model. It would appear that a combination of autocratic military backed political leadership, together with a belief system, produces a bridge from regime to the next regime, which gets used by a capitalist inner hard core group near to organizational top, but it's not the actual public leadership who are sacrificial in extreme circumstances.
The Templars came close to lasting, but didn't make it to the present day. The Vatican did better, it’s still there. And when I look around the globe, without mentioning names, I see several global forces which embody a belief system for the masses with a banking business model near the top but not at it with a royalty or elected alternative or revolving political dual dynasty. Even the places of the world who oppose most energetically the powers of the dominant west, seem to have a similar setup. Just a different one.
Getting back to gold .....
The last man standing, the one who bridges the gap at regimes’ ending and keeps his wealth, the one with a belief system present to provide moderate control when other controls of the masses fail ... belief systems keep the masses in check during transition. So managers of beliefs, like eg religious organizations are a bit better at keeping their gold for the next round when a new prize fighter is prepared for “giving his all” to succeed. Many rulers, Pharoahs, UK Kings identified themselves either as deities, the descendents of deities, or appointed themselves the head of the church for this reason: the consolidation of belief system power with their other powers, internal power of law, and military force both internal and external.
So if we look around at who has the gold today we should see who these people or entities or dynasties are. Right? Wrong! For some reason we only can account for about 10% of global gold holdings. It's in the hands of states. The rest of the world’s mined gold is gone, or lost, or hidden from sight. And that reminds me of what happened to the Templars when King Philip’s debts got too high, they were tortured and murdered. Why tortured? Well I’m sure they had their gold hidden from sight back then too, but Philip wanted it. So it was about the gold, not the beliefs. And belief systems don't work on leaders. He didn't torture them for beliefs, it was for information I'll bet. More recently Gaddafi in Lybia had gold, and a couple of other recently invaded countries too. The 90% of the world’s gold is owned by somebody, and they have learned well from history what could happen to them.
And now the world is again in debt. For some reason the Vatican and Italian banking system are under the magnifying glass of various government regulatory authorities. If this continues the attentions of the political leadership, who are ultimately more vulnerable than the obscure organizational leaders behind will fall upon other old institutions which have lasted through several regime changes, or centuries. Any which controlled armies in the distant past and are till around today will be having thoughts like the Templars had.
And for that reason the world is arriving at an unusual time and place. New leaders must look with a critical and greedy eye upon the older order that backed them or their political opponents, looking for a way to fill rapidly emptying coffers. Without their paid thugs and military they are prey to other leaders. So who controls the military during such times matters a lot. They will tax business out of business to pay their military, though it appears insane to people in business. When the money begins to run out, the gangster-partners begin to fight for control of what remains. It's just like a high society marraige after the money begins to reduce.
And long term war cycles have bottomed and are on the rise again. It’s just my humble view, and it’s a gradual rise. But looking around I see many reasons that appear to confirm this thought. But when you get down to the bottom of it all, it will be another war for assets to strip and thereby allow the emerging top dog robber barons of the present century to stay rich and in power. That means oil/energy and gold, the resource assets par excellence. But all other resources are good too. All business leaders want more assets. It’s an insatiable need. The debts can however crystallize their needs into a more immediate type of strategy. And debts are currently high. Therefore arrests, charges, dissolution and seizure of old money goes onto the table for consideration as possible strategies.
One of the best spectator sports we the people get to see these days is when high society ex-partners have a falling out, and their dirty laundry becomes exposed. I suggest that this time of change goes several steps further than your average celebrity divorce.
So stand back and soon you’ll get to watch some really serious heavy hitting players in action. It will be amazing to watch it live, and it will be played over months and years. The falling out has already started in some countries. This is not a contest to be in the middle of. Try to not work or live at the frontline of the losing leaders' organizational pyramid.
Enjoy the weekend.
The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: .