Transcription
You know, so what we're seeing in the market is the market hasn't caught up with what the hell is going on. And certainly, I can see oil prices going quite a bit higher. I mean, if you look at oil prices in, um, the Asian countries, typically instead of, you know, $100 a barrel or now $110, um, typically they're 150, 160. Now, admittedly, this is local shortages, but you can see which way this is going. Our prices haven't caught up with the reality of it yet, even without an American failure on its invasion. Boots on the ground, loss of life, um, body bags coming back, the whole kaboodleoodle. This is not good. It really is not.
The, you know, the Brussels contingent, the leaders, if you like, in Europe is the Chihuahua. You know, they're just, um, they're not people of stature. They really are not. We are very, very weakly governed and, uh, there is absolutely no, uh, sign of any preparation, uh, for, um, dealing with this sort of disaster on the national level. I wouldn't rule that out. I wouldn't rule that out because nobody's challenging anything in these markets. You can move things how you want in a sense, um, because, uh, you know, we're all too frightened to deal. Are we going to deal ahead of the weekend?
I don't think we do.
But my goodness, this is mana from heaven for stackers. It really is. They'll never see it this cheap again.
Yeah. Well, um, since, um, President, uh, uh, Trump made his presidential statement last night, um, I think it's become quite clear that there's going to be some action this weekend, um, talking about troops being, um, activated, if you like, um, in an invasion, whatever that is, of Iran. Um, and of course, we've got Good Friday, Saturday, and Sunday. Um, if not to conquer Iran or whatever, but, uh, you know, perhaps to, um, make sufficient progress to give markets comfort when they reopen on Monday. Now, we've actually got, we're actually closed on, on, on Monday here. Eastern Monday is a bank holiday. So, the London markets will be out of action, in, in effect. So, I suppose that, um, from President Trump's point of view, this is probably the best chance he's got, if you like, of doing something. Um, now, I mean, obviously, this is, I think it's the, it's the speculation around this which must be driving oil values because, um, it, it's odd, Danny, because markets just don't know what to make of this. They really don't. I mean, you know, with the way in which Iran, um, seems to, uh, continue to shell US bases all around the Gulf, um, the fact that the Houthis are now coming into play in the, in, in the entrance to the Red Sea, blocking off effectively shipping going through the Suez Canal and also blocking the pipeline at Yamu, uh, which delivers, I understand, something around about a million barrels a day. Uh, that's, you know, this is actually quite serious stuff, and yet markets are sort of rather ignoring it. The fact that, um, oil has jumped today, I think, does show some nervousness, but this isn't being reflected in bonds or indeed in equities. Um, you know, they're just sort of quiet. I don't think anybody knows what the hell's going on. That's the real problem. But this is actually very serious. Uh, uh, Danny, and, um, all the reports that I see suggest that Iran is not going to be a walkover. They have been, um, defending themselves, um, they have been planning, if you like, to, um, deal with an invasion for the last 40 years. Ever since, um, and ever, ever, ever since, uh, uh, Saddam Hussein was chucked out in Iraq, which is what, 2002 or thereabouts, they've seen what happens when America, uh, if you like, conquers, um, you know, a Middle Eastern state, and it just completely, completely destroyed everything, um, and they're not going to fall for that at all. They're determined, absolutely determined that that, um, is not going to happen to them. So, they have evolved their missile technology so that they have now got, um, hypersonic missiles which, um, you know, I'm told travel at up to sort of 15 to 20 times the speed of sound. I, you know, this is,
This is, this is, this is unstoppable, and basically, they've taken out all the, um, uh, well, almost all the interceptors, of which, you know, because of the the situation in Ukraine. I mean, you know, the, uh, Israelis and the, the, um, Americans are low on this sort of, um, stuff. Uh, so, having taken all that out, we can now expect to see the hypersonics and all the rest of it really coming into action. So, I would say that this is a very, very dangerous time, and I would not put my money on America actually managing to win this one. I think, if anything, America will be beaten. That is extremely worrying because it will change the geopolitical landscape completely.
And as for the price of oil,
I mean, you know, we're now seeing people saying, well, it could go to $200, whatever.
Yeah, I mean, I don't know where it's going to go. I, it'll obviously go higher. Um, you could say that there is plenty of oil around and that, um, basically, you know, okay, with a little bit of rationing here and there or whatever, um, it may not be quite so bad, but having said that, um, I think the real problem isn't so much oil. I mean, that is a problem, but also it's the stuff which comes out of, um, you know, from downstream from, from the refineries, fertilizers, urea sulfate, phosphates, um, and all the rest of it. And this, this at the beginning of a, of, of the growing season in the northern hemisphere, and with the Houthis, uh, closing off the Red Sea, means this stuff isn't going to get to Europe. This is going to be serious inflation problems, inflation of prices later on this year. Really serious. And nobody, nobody in Europe has planned for this. Nobody has any, um, resilience against this, this development, and so we're just, we're just open to be literally slaughtered in this.
Basically, the idea that inflation is going to be, I mean, I saw the IMF report the other day, um, and they, uh, reckoned that, um, uh, you know, assuming that this, um, uh, you know, that the Suez Canal wasn't closed for too long, they expected inflation to peak in the United States at around about 4%. And furthermore, um, you know, core inflation would go out at the end of the year at about 3%, and there would be one more cut in interest rates. Come on. No way.
You know, and so what we're seeing in the market is the market hasn't caught up with what the hell is going on. And certainly, I can see oil prices going quite a bit higher. I mean, if you look at oil prices in, um, the Asian countries, typically instead of, you know, $100 a barrel or now $110, um, typically they're 150, 160. Now, admittedly, this is local shortages, but you can see which way this is going. Our prices haven't caught up with the reality of it yet, even without an American failure on its invasion. Boots on the ground, loss of life, um, body bags coming back, the whole kaboodleoodle. This is not good. It really is not.
Energy markets have become the epicenter of global uncertainty. Oil prices are swinging violently, reacting to escalating tensions in the Middle East, particularly involving Iran and strategic shipping routes like the Strait of Hormuz.
Disruptions in key supply chains, including threats to the Red Sea and critical pipelines, are raising fears of a major supply shock. Despite this, broader financial markets remain surprisingly calm, suggesting a dangerous disconnect. If supply disruptions intensify, oil prices could surge far beyond current levels.
The world may be underestimating the scale of the risk, especially as geopolitical tensions evolve rapidly and unpredictably.
Well, one point worth making is that, um, when we had that drop post-COVID, oil spiked up at $128, $130. So, you know, we're not even there yet. I mean, that's on 10%. Um, we're certainly seeing 20% and probably more. And, uh, yeah, it's not good. It really is not. This is, this is, I mean, it's going to, in America, of course, everybody talks about gas prices, which to us are, you know, is petrol prices, um, and so coming up into the, um, if you like, the midterms. This is not a happy scene for President Trump either.
Um, I think he's, he's, he's almost, um, throwing all the chips on on one bet, and that is this weekend is going to, he's going to turn the tide. I don't believe it. I don't believe it.
Basically,
and again, you mentioned it's a three-day weekend, so they've got an additional day to,
act.
Basically, basically, they've got an additional day to act. Um, and with the European market, it's closed for a fourth day. Certainly, we are. I'm not too sure about the continent. Um, then, uh, yeah, I mean, it's probably his only chance to to do it, but um, he's fighting, I think, virtually impossible odds. I mean, the problem is that the American military are still fighting World War II, you know, with all the the aircraft carriers and all the rest of it, when all they are are just huge targets for missiles, for hypersonic missiles, which is why they're standing off, you know, theoretically out of range, but it was interesting to see. And I think this was a deliberate, um, uh, uh, ploy. The Iranians sent two missiles over to Diego Garcia, which is what, sort of 2,000 miles away or something. I mean, huge, huge distance. Um, I think I was, I don't think the intention was necessarily to hit Diego Garcia. I think the intention was to say, look, you know, we can get you, if you like. You know, it was a warning.
Beyond oil itself, the real threat lies in what energy disruption triggers across the global economy. Fertilizers, industrial chemicals, and agricultural inputs depend heavily on energy supply chains. Any breakdown could ripple into food production, creating inflationary pressure worldwide. With planting seasons underway in the northern hemisphere, timing could not be worse. Many economies, particularly in Europe, appear unprepared for such shocks. Official projections suggesting moderate inflation may prove overly optimistic. If supply constraints persist, the result could be a severe surge in living costs, exposing vulnerabilities in global economic planning and amplifying financial instability across multiple sectors.
Well, I mean, you know, you would think that, uh, governments have a plan. There's no sign of it. There really is not. Um, they're all actually, I think, panicking. I mean, today we had our foreign secretary, um, uh, you know, who's a basically typical lady Labour, uh, MP, lady, um, Labour MP. Um, I wouldn't comment on her qualifications for the job, but she was hosting an online meeting of 40-odd countries to discuss this. I mean, all they're doing is they're having meetings, meetings, meetings, meetings. Nothing's coming out of it. There's no action. There's no action plan. You know, why don't we go and talk to someone? It seems to be, but as far as the planning goes, and of course, nothing comes out of that. It's just a waste of time, and things are accelerating, really quite rapidly. I mean, the idea that you can, um, selectively ration energy, how are you going to do that? You can't do that. How are you going to identify the people who, uh, can't afford energy and need help? You can't do that.
What's going to happen, Danny, is that they are going to print credit in huge great quantities, basically to defray the problems that this Gulf episode is giving us. Um, I mean, and also, you know, the political class. I mean, they're saying one thing about this, uh, which basically is, you know, um, it's not our, it's not our war. Um, you know, we will give you facilities. I mean, in the case of Britain, we will give you facilities to fly your bombers, uh, from, from our airfields, and also our airfields in Cyprus, um, for defensive purposes. I mean, honestly, what a load of rubbish. So, um, we, I mean, you know, I think our intelligence services are saying, and our military are saying, look, you know, this is bad, this is very, very bad, don't get involved. And so we have the situation where Starmer is determined not to get involved, but is actually not doing it as well as previous MPs, prime ministers. Um, I refer back to Harold, Harold McMillan, um, in the late '50s. Uh, America wanted us to join in on Vietnam. We refused. Before that, we wanted America to join in with us on Suez. America refused. It's perfectly respectable for allies to decide not to get involved in someone else's war. You know, just bloody well say it. You don't need to sort of, you know, go, you know, I, I'm not too sure about this. We'll do this. We'll do that. You know, I mean, they are ditherers. Absolute ditherers. And as for the European lot, um, I mean, Pepe Escobar, who is a very well-informed geopolitical analyst based in Asia, calls the, um, uh, the, you know, the Brussels contingent, the leaders, if you like, in Europe as the Chihuahua. You know, they're just, um, they're not people of stature. They really are not. We are very, very weakly governed and, uh, there is absolutely no, uh, sign of any preparation, uh, for, um, dealing with this sort of disaster on the national level.
The geopolitical landscape is shifting in ways that could redefine global power structures. Military developments, including advanced missile technologies and asymmetric warfare strategies, are challenging traditional assumptions about dominance. A prolonged conflict involving major powers could reshape alliances and economic systems. Analysts warned that outcomes once considered unlikely are now plausible, including scenarios where established superpowers face unexpected setbacks. Such developments would not only affect military balance but also global markets, currencies, and trade systems.
The stakes extend far beyond regional conflict, potentially marking a turning point in modern geopolitical history.
It will eventually. I would draw a parallel with the great financial crisis when gold fell quite rapidly from over $1,000 down to $680.
And then it climbed up and tripled from there over between then and, uh, the following September, no, not the following September, September 2011. So, um, I mean, basically,
I think what happens, I mean, we have, we have, um, uh, an economic system which is basically run by Neo-Keynesians. They don't understand gold. They don't like gold. They think gold is a pet rock. It is a, you know, the gold standard is a sort of, if you like, a relic from the past. It's a, you know, they don't see that gold is part of the monetary system. Uh, they think it's just a hangover. Now, when you've got investment managers who have all gone to university or certainly high school and learned that form of economics, you can understand why their reaction under circumstances like this is to see gold as something you take profits in. And your idea of zero, zero risk is cash in your accounting currency.
And that basically is what everybody's been doing. They said, you know, gosh, terrible risk. No, if you're, if you're a US fund manager, what do you do? You sell things for cash. You know, and if you're a foreigner, you sell things for cash in your own currency. It's a process which actually is only just starting. Um, certainly as far as the dollar is concerned, which is over-owned abroad. I mean, uh, you know, and you've got an awful lot of dollars are owned by Middle Eastern, um, uh, nations. I mean, I'm thinking Saudi Arabia, United Arab Emirates, and also Kuwait. I mean, these are the, if you look at the, the, um, ownership of financial assets, those are the three big ones in the area. Now, do they sell gold in order to pay the bills, or do they sell dollars to pay the bills? I mean, people think they sell gold, but they don't. They sell dollars. Of course, they do. And of course, this Keynesian, uh, approach doesn't apply to Asia because they've never read a, they've, you know, they've either never read an economics textbook, or else they go on their own gut feelings, and that is get rid of this rubbish paper. So, you can see that these are the circumstances that are prompting massive flows, almost, I'm just draining liquidity, uh, of, of physical metal out of our exchanges, going into China, and the shortage in China is so, so acute that the big banks are rationing their customers when it comes to investment bars. They're saying, um, you know, uh, basically, we have so much available on this day, and by 1 minute past 9, it's all gone, just gone.
Basically, um, there's another, I think it was the China Construction Bank, is now holding a sort of a lottery for its customers who want to invest in gold. You have in China, you have got savings accumulating at the rate of 5 to 6 trillion every year. It's not going into property. It's not going into the stock market. Little bit of it, maybe it is.
Despite rising global risk, gold does not always react immediately as expected. In times of crisis, investors often rush to cash, selling assets, including gold, to reduce exposure. This initial liquidation phase can create temporary price declines. However, history shows that once liquidity pressures ease, gold tends to recover strongly. During the 2008 financial crisis, gold fell sharply before entering a powerful multi-year rally. Today, a similar pattern may be unfolding as confidence in currencies weakens and financial systems face strain. Gold's role as a monetary asset becomes more prominent, setting the stage for a potential long-term surge.
The People's Bank of China has been lowering its reference rates so that, um, deposit rates, if you like, on on bank deposits have been going down. These banks, um, always offer, um, bank, you know, gold accumulation accounts. You just open a gold accumulation account and you buy gold. Why do you buy it? You buy it because it's going up. You buy it because you're frightened of what's going on. You buy to get out of the, you know, it's to hedge, if you like, the whole of the currency system because basically gold is your only hedge. You're not allowed to deal in, in, in foreign currencies in China. You know, there is an exchange control regime. There is an exchange control regime also in India. Same thing applies, though, you know, the less, the less arrangements, if you like, for, uh, for Indians to buy gold and silver. But nonetheless, I mean, we're being cleaned out, and that's the effect. I mean, the other thing about it, Danny, is that, um, we've just had the March expiry on on Comex, and, you know, the, the, the swaps and the bullion bank traders and all the rest of it are net short, and they're trying desperately to try and reduce that liability because they can see what's going on. They may not be the brains of America or Britain, if you like, in terms of understanding the difference between money and credit, but they, I mean, when you get the major banks in America, virtually all saying they expect gold to be higher at the end of 2026, and in some cases, you know, significantly higher by the end of the year. Bear in mind that their managed accounts, which in some cases are over a trillion dollars, got no gold in them at all. You know, there is a huge mismatch in the whole thing. So, you know, if you're running the trading desk and you understand the position, if you like, from your investment managers, they haven't got any gold whatsoever, and you see that, uh, I mean, for example, the pro-dollar is now dead and buried because, um, anything coming out of the Middle East, basically now has to go into pro-yuan. You know, you may not analyze this terribly, um, carefully, but you, you know, your gut tells you don't be short of gold. So, what do you do? You bang the price in order to scare everybody out, everybody else out, so that you can buy it. Unfortunately, um, there is very, very little speculative interest in silver. Open interest is the lowest it's been for over 20 years. The level of speculative interest in gold is equally very low, where I think I'm right in saying that the level of open interest is as low as it's been since about 2014-15. So, you know, again, um, you know, the speculators are basically not there. If it's going to go any lower, then you've got to persuade punters to go and short it so that you can close your bear position. I wouldn't rule that out. I wouldn't rule that out because nobody's challenging anything in these markets. You can move things how you want in a sense, um, because, uh, you know, we're all too frightened to deal. Are we going to deal ahead of the weekend?
I don't think we do.
But my goodness, this is mana from heaven for stackers. It really is. They'll never see it this cheap again.
A profound shift is taking place beneath the surface of global finance. In regions like Asia, demand for physical gold is accelerating rapidly, driven by rising savings and declining trust in paper currencies. Banks are struggling to meet demand with shortages leading to rationing and even allocation systems. At the same time, Western markets remain underinvested in precious metals, creating a significant imbalance.
As liquidity flows out of traditional financial assets, it is increasingly being redirected into tangible stores of value. This silent migration could mark the beginning of a new era where hard assets reclaim their role at the center of the global financial system.