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It appears that in history, overstretched empires
have often resorted to fighting external wars in the vain attempt to preserve
their ailing empire:
1) Through history more blood has been spilt, and
more lives lost over gold than anything else. There have always been Gold
Wars waged - historically, they centered on seizing by force the physical
stockpiles or controlling strategic reserves of gold.
2) Today’s Gold War is more complex and
deceptive. There is a very clear war being waged against gold (the same war
that has been going on for close to 100 years).
3) The world is entering a period where energy
(particularly oil and gas) is very quickly going to become more precious,
exceedingly more difficult to come by and vastly more expensive.
4) In the future many more wars and conflicts
(including military) will be fought over energy.
5) There is a very clear link between oil and gold.
This HIDDEN “Oil/Gold” link becomes more important each day as we
will see in the future.
This week someone asked me, “but what about
currency wars, aren’t they important too, how about the Euro and the
Dollar”? It is our view that in the world we are entering now, future
wars will be fought over tangible assets more so than paper assets such as
currencies.
2005 AD : Beijing signs
long term supply contracts for oil, gas and coal (it does not care whether
these supply contracts are in Euro or Dollars, providing it has the supply
locked in for the long term). China has an energy problem and cannot get
enough to meet its present requirements, let alone in the future, and so,
will pay in any paper currency they want. Meanwhile the rest of Asia and the
Middle East are buying up gold and silver as fast as possible. Middle Eastern
nations understand that they have been trading a diminishing asset (oil) for
paper (Euros & dollars).
While it may be impossible to fully understand Empires
at War for Energy & Money, at least we can make a start by winding
back the clock to the days and empires of old;
The Year 1000 AD ~ “THE EMPIRES OF
ISLAM”. “Baghdad” is the Center of the World
and the center of world trade.
“Rivals” : “Constantinople”
in the Byzantine Empire and Kaifeng in Song dynasty China. Gold from Nubia
and the Caucasus is minted into the dinar (the money of the day from Spain
all the way east to the gates of Constantinople. Western Europe is still in
the clutches of the Dark Ages (a) .
“World Population” :
300 million souls
“Above Ground Gold Per Person” : below 1oz per person (b).
“Most Valued Commodities” : 1) Gold, 2)
Silk, 3) Slaves, 4) Porcelain, 5) Silver .
“Wars of the Day” : Fought over gold and strategic commodity
trade routes (c)
The Year 1300 AD ~ “THE KINGDOMS OF
KHAN”. Dadu (Beijing) is the
Center of the World and the riches of the “Far-East” or
Asia.
“Rival” : Back in Europe, Venice is the
trade center, “Merchant of the Mediterranean” and financial
center of greater Europe.
Khan’s (various) families rule from the Far to not so Far-East
including China, Korea, Mongolia, Persia, Central Asia and parts of
Russia.
“World Population”: 369 million
souls
“Above Ground Gold Per Person”: 1.1 oz
per person (b).
“Most Valued Commodities” : 1) Gold, 2)
Slaves, 3) Silk, 4) Porcelain, 5) Spices.
“Wars of the Day” : Fought over gold and strategic commodity
trade routes (c)
The Year 1500 AD ~ “THE OCEANIC EMPIRES OF
EUROPE”. Constantinople is the Center of the World, the
home of the Ottoman Empire, the resting place of vast riches of the former
Byzantium Empire and the controller (and blocker) of the land-based commodity
trade routes to the Far-East.
“Rival” : Florence, Italy is the center
of the emerging European Renaissance. Now landlocked from the Far-East,
Europe instead takes to the seas - the Portuguese discover India, and the
Spanish, the Americas.
“World Population” :
480 million souls
“Above Ground Gold Per Person” : below 1 oz
per person (b).
“Most Valued Commodities” : 1) Gold, 2)
Porcelain, 3) Spices 4) Textiles 5) Guns .
“Wars of the Day” : Fought over gold and now both ocean and land
strategic commodity trade routes (c)
The Year 1700 AD ~ “THE RISING AND FALLING
EMPIRES OF EUROPE”. Versailles, France, is the Center of the World for
all those wanting to be rich or famous, “Rivals”
: London is the trade and financial center. Mexico City is the jewel
and hub of the Spanish Americas. Spain is bankrupt and in decline (d), France
is embarking on a short-lived time of power and affluence before also going
bankrupt (e). Europe launches into a period of conflict; Spain and France at
war with Britain, Austria and the Netherlands. In America, the French fight
the British.
“World Population” :
640 million souls
“Above Ground Gold Per Person” : slightly above 1 oz per person (b).
“Most Valued Commodities” : 1) Gold, 2)
Slaves, 3) Textiles, 4) Tea(f) 5) Timber.
“Wars of the Day” : Fought over gold and
foreign lands and colonies.
The Year 1900 AD ~ “THE EMPIRE OF
BRITANNIA” London is the Center of the World in every way with
no real rival. The British Empire has amassed all the pieces and wealth of
every declining European empire of the last 200 years and now spans the world
to the point where it is said “the empire where the sun never
sets”
“World Population” :
1,640 million souls
“Above Ground Gold Per Person” : Just above 1 oz
per person (b).
“Most Valued Commodities” : 1) Gold, 2)
Coal(g), 3) Timber, 4) Steel 5) Armaments.
“Wars of the Day” : Fought over borders,
nationalism, foreign lands and colonies and commodities including gold.
The Year 2000 AD ~ “THE ELECTRONIC AND
ENTERTAINMENT EMPIRE”. New York is the Center of the
World rivaled by Beverly Hills, CA. World population
continues to grow exponentially. Approximately 30% of world population
consumes 80% of the world resources. The vast majority of the
“Fortunate 30%” are busy consumed with cell phone coverage,
Internet connection speed, and their share and property portfolios.
“World Population” :
6000 million souls
“Above Ground Gold Per Person” : Much less than 1 oz per person (b).
“Most Valued Commodities” : 1) Oil &
Gas(h), 2) Airplanes, 3) Microchips, 4) Armaments, 5) Movies.
“Wars of the Day” : Fought for reasons
uncertain and often vastly different from what we are told.
So what can we learn from this millennium trip down
memory lane ? We can see that empires come and go,
as will the “Electronic and Entertainment Empire” of today.
Energy never rated as a valuable commodity until 1900 AD, when coal became
the second most valuable commodity and by 2000 AD, oil had become the most
valuable commodity.
The world has changed dramatically in 5 years as
stress cracks start to appear in the veneer of the “Electronic and
Entertainment Empire”. Oil was top of the list as the most valuable
commodity 5 years, but that was before anyone was taking seriously global
declining production and growing demand. Today the price of oil is 150% above
where in was in January 2000AD, and many believe that this is just the
start.
Likewise there are major currency stress cracks
appearing. The dollar has taken a beating, and while
the EURO maybe up, many believe that it is an unsustainable trend with the
massive deficits and bureaucratic problems facing the region.
Meanwhile gold, which for the 1st
time in 1000 years did not rate as an important commodity in 2000, is now up
over 50% as some start to abandon paper currencies for tangible assets.
We believe it is the beginning of a trend that will
continue as currencies become increasingly unstable, and as nations start to
scramble to secure the world’s diminishing energy assets.
We said earlier that through history more blood has
been spilt, and more lives lost over “gold” than anything else.
We believe that this will become the case again, only to now add
“energy” along side “gold”.
And our job at the Daily Dig will be to keep digging
around for information that will help give some perspective in a confusing
age.
(a) Many will claim that dark ages were the result
of the debasing of the coinage in the western Roman empire.
(b) Estimate based on estimated world gold production at the time.
(c) To control the trade routes is to control the commodities that travel
over it.
(d) despite the plunder of untold monetary gold and
other riches from the new world
(e) both Spain and France seem unable to control domestic spending and embark
on overly ambitious and expensive military campaigns and conflicts.
(f) Showing the influence of the British consumer on world trade.
(g) Energy has climbed to second and become of major importance since the
beginning of the industrial revolution in the late 1700’s. As the
population grows so does its dependence on energy.
(h) Oil and gas has come to the top of the list
Philip Judge
Anglo Far-East Company
Also
by Philip Judge
Philip Judge is the 3rd
generation of a family that has had substantial involvement in the Precious
Metals markets. He has researched, written and spoken on the gold, silver and
commodities markets for over a decade. Philip works in the marketing and
operations department of The Anglo Far-East Bullion Company, an
internationally based Bullion Banking, Investment Management and Financial
Services Company
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