The Commodity SuperCycle, Hyperinflation, And The War In The Gold Market

With the stock market rallying on the heels of the public betting big on a stock market crash, today the man who is connected at the highest levels in China says we are in the early stages of the Commodity SuperCycle, hyperinflation, and the final phase of the war in the gold market.

Gold: The Endless War
May (King World News) – John Ing: In 1991 the Soviet Union collapsed, the Berlin Wall came down in Germany and 15 newly independent nations including Ukraine were born, ending the Cold War peacefully. The end was only a hiatus however. Today, disruption is everywhere and global tensions are reshaping the world order. Start with the draconian financial sanctions, confiscation of assets and the weaponization of commodity markets as part of the West’s declaration of financial war against Russia in response to its brutal invasion of Ukraine. Yet, the Ukraine invasion reveals deeper fault lines. Europe is split in its response. China remains on the sidelines. The important Middle East energy bloc has no interest in abandoning relations with China, the largest oil consumer or, breaking ties with Russia. Asia too has joined China, dividing the post-war Washington led order which began after World War II with the Marshall Plan rebuilding Europe and for half a century, free trade, globalization and technology cemented America’s leadership role. That has changed. Today, the Russian economy has nosedived, locked out of Western finance and commerce, and mired in an “endless” war that neither side knows how to win or willing to lose.

The Russian war has framed the global stakes as a contest between a distinct two-polar world order with a Washington-centric and ascendant Beijing-led order. Noteworthy too is that in the last two decades as the US weaponized the dollar, its share of total exchange reserves has declined below 60% due in part to usage of the euro and yuan. The seizure of assets, the imposition of wide-ranging sanctions and tariffs while furthers Washington’s interests, also undermines faith and trust in the dollar.

Energy, The Lack Thereof
With the change in the world order, Russia’s financial isolation grows with widespread shortages of raw materials, especially for energy and food having major repercussions that will reverberate throughout the global economy. First, any return to normal is unlikely while Mr. Putin remains in power. Second, in the never normal there is the likelihood of a Russian default on some $120 billion of dollar denominated debt as a result of the fallout from the US Treasury’s refusal to let US banks process payments on Russian government debt. Though wrenching, the confiscation of half of Russia’s $640 billion in gold and foreign currency reserves exposes a stealth currency war and in bringing out into the open, ensures Russia’s first foreign debt default since 1918.

Consider energy and food. Energy issues were a major contributor to Putin’s war. Russia’s invasion has created a full-blown global energy shock, underpinning an already escalating inflation problem which has put climate change on the backburner and, ironically accelerated global warming. The stakes are high. Energy has become a tool of war, exposing the West’s energy vulnerability. Leaving aside who is winning or losing, it is clear that we face protracted energy, capital and financial chaos. Noteworthy is that Russia’s energy sector is keeping that country afloat, benefiting from the higher prices brought on by its attack on Ukraine, producing a surplus in the latest quarter, despite the sanctions.

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The Commodity SuperCycle, Hyperinflation, And The War In The Gold Market

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