There are may cross currents of events, and stories about events sweeping through the precious metals blogosphere at any moment. One of the problems which must always be dealt with is: which of these are significant and which are not. Which are stories based on truth, even though they may be incomplete, and which are stories based upon misinformation and must be ignored, or trade in in opposite manner. Misinformation there certainly is, though I usually regard this "false" news as merely the sales departments promotion campaigns for Wall Street. After all they must get someone to buy their latest duds, mustn't they. I'd rather it's not me!
Usually I focus upon price movement to judge affairs, and what seems to matter to the gold market. Price is a very objective measure. If a story comes out and price ignores this, it says something about that story. Likewise when price moves for no apparent reason, there begins an investigation to discover what is moving price in that direction and generating the trades which move it.
Here is an incomplete list of some of the big issues drifting about at the moment, though one any particular day they could be positive or negative to prevailing sentiment for owning gold. I find that just because an event is "good", say today, that does not mean the same event will be "good" this day next week. It's not sentiment, it's the change of sentiment that matters.
Just a few issues which go unanswered, and whose answers will have a big effect, when the answer emerges from the fog:
Does a dollar collapse mean (a) a simultaneous systemic collapse of the whole financial sector, or (b) merely a sequence of 5-10% declines of the dollar, which are just more steps, similar to many other declines already seen, which date back 100 years or more, and which the financial sector is quite used to seeing and can presumeably handle.
When the ECB (Belgium if you prefer!) buys TBonds and the Fed issues USD against EUR swaps to buy them with does this circle of counterfeiting (sorry QE-ing) build a virtuous tower of positivity results to end the worldwide depression, or does the whole house of cards collapse when the right shock shakes it to it's rotten core.
Education and awakening of the public has begun with the alternative media of the internet. This is perceived as a bad thing by the parties who run affairs for their own benefit. So will this process continue leading to a real electoral demand for change, or will the state sponsored attempts to censor and place clouds of misinformation prevent this process of education of the masses?
As the WWII conquered nations of Germany and Japan observe the US backing away from Saudi Arabia and Ukraine and their "defense" will these nations swing to place their cooperation to a different geopolitical bloc than the US/UK/NATO alliance for the coming decades. Which way will India face in this process?
Will the global war for resources remain in the regions of resources or will these conflicts spill over outwards towards the larger protagonists fomenting these wars?
The US appears to be following a policy of raising armed opposition groups within the Middle East and Asian countries to split their leadership and weaken. In particular militant sharia type sects appear to receive support to challenge leaderships already in place. Will civil wars and internal conflict continue to weaken these countries, including the former Soviet Republics and China, or will their governments put the upstart movements down and retain control and power?
Always during a depressionary stagflation, there is a desire to utilize or release new energy to "Buy the regime's way out of a problem". The 1970's oil in the North Sea is an example of this. The mad push to get fracking going everywhere possible to cover up energy cost inflation is a modern day clutch at a similar type of straw. The question is will a low cost energy source emerge in adequate amount to save the 100 years old system which is wobbling so much at present?
The counter point to the above energy resource war is that energy producing nations wish to increases their prices to get paid for their exported resource, and to cancel out the effect of depreciating currencies paid to them by the nation-buyers of their exported energy. In the 1970s the oil crises and middle east wars resulted from this. The current stagflation has taken a similar direction with Russia, Syria, Cyprus, and Middle East "gas wars" kicking off or being engineered.
What form will the various engineered crises take, when regimes want to implement new policies which without a crisis might be rejected by the populations?
The financial wars which currently are running in parallel with the resource wars - will an equal and opposite counter reaction result from the countries currently under financial attack by the currently weaponized financial systems of the super powers? If so, what will collateral damage (laugh at that state-speak phrase) and it's effects look like?
As inflation takes hold, what will the attendant capital controls, price controls and wage controls be like? Legislation for all of these is either in the pipeline or already in place.
When states move to purely digital currencies, what will the public section which chooses non compliance do about that, and how successful will evasion be in heavily surveilled society, and draconian will enforcement be?
This is intended as a discussion document rather than a global geopolitical analysis. However these are all changes that I believe are coming. I'm just posing questions, not providing the answers. The answers will result from various contests between large nations and forces which are in progress or which might have not yet occurred, but are beginning. Time will gradually expose the answers to our sight. And the dislocation caused by the answers will change sentiment and drive asset prices to new levels.
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: RhythmNPrice.