“The Whole World Is (Not) United!”

  • “Coalition of the unwilling”: Staying out of war
  • Conflating a hawkish early-aughts saying (GWB and WMDs)
  • Jim Rickards on key nations’ right to “just say no”
  • “The most discouraging asset class of them all”
  • Byron King: A massive mining event breaks barriers… A one-of-a-kind vending machine… NYC’s (un)mask mandate… And more!

“Today, I advocate the creation of a ‘coalition of the unwilling’ — an alliance to stay out of the [Ukraine] war,” says Beijing-based economics professor Dr. John Gong in an opinion piece at the South China Morning Post.

If that bit about a “coalition of the unwilling” sounds vaguely familiar, Dr. Gong is turning an early-aughts saying on its head.

President George W. Bush, in fact, used the phrase “coalition of the willing” in 2003 to describe nations that supported the invasion of Iraq on the basis of weapons of mass destruction (WMDs) and Saddam Hussein’s association with al-Qaida.

Er, both of which were disproven…

George Bush

“Nevertheless, over 400,000 people paid with their lives,” Dr. Gong says.

Clearly, Washington looks askance at “neutral” China’s plan for a resolution to the year-long conflict in Ukraine.

Late last month, Biden said: “Putin is applauding it, so how could it be any good?” (A logical fallacy if we ever heard one.)

According to Dr. Gong, the “unwilling” — in the interest of national self-preservation — should continue to recuse themselves from the White House’s current pet stratagem: financial warfare.

“The number of countries that have not imposed sanctions grossly outweighs the number that have,” Gong notes. “Almost the entire Global South” — home to some of the world’s most-populous countries — “is not in the sanctions camp,” he says.

“They are the real majority,” albeit “the silent majority.”

Paradigm’s macro expert Jim Rickards agrees: “A large part of the world has refused to join the U.S./EU/NATO financial sanctions,” he says. “This was best evidenced at the February G20 finance ministers summit conference held in Bengaluru, India.”

“India, which as chair of the Group of Twenty (G20) economies was hosting a meeting,” Reuters reports, “was reluctant to raise the issue of the war but Western nations insisted they could not back any outcome that did not include a condemnation.” (Emphasis ours)

The upshot? “Finance chiefs of the world’s largest economies strongly condemned Moscow for its war on Ukraine… with only China and Russia itself declining to sign a joint statement.”

(However, India — allegedly, the world’s largest democracy — opted to join 31 other countries in abstaining from a U.N. resolution, Reuters says, “demanding Moscow withdraw its troops and stop fighting.”)

“For only the second time in its history,” says Jim, “the G20 was unable to issue a final communique reflecting the consensus of the participants.

“This is a good example of what I warned about a year ago shortly after the Russian invasion…

“The world is far more fractured than the U.S. anticipated, and many key nations are not joining the sanctions regime,” says Jim.

Accordingly, The New York Times reports: “At first… a U.S.-led campaign, which included 37 countries, rattled the foundations of Russia’s financial system by freezing its foreign-currency reserves and targeting its main banks.”

But the article takes a sharp right turn: “The West never won over as much of the world as it initially seemed” — with some 47 countries declaring their neutrality (and four countries siding with Russia).

Not only that, “even some of the nations that initially agreed to denounce Russia… have since started moving toward a more neutral position.” In total, these 11 countries, once aligned with Western sanctions, have openly started trading with Russia.”

Which is something the U.S. didn’t bargain on… but should have.

“If developing economies won’t align with U.S.-led sanctions, that leaves far too many trading partners with Russia for sanctions ever to be effective,” Jim says.

“The U.S. may be the world’s largest economy ($25 trillion), but its share of global GDP, measured as a percentage of the total, has been shrinking,” he adds.

“The world’s four largest developing economies (China, India, Russia and Iran) have a combined GDP larger than the United States’. When the next three economies (Brazil, Mexico and Indonesia) are included, the gap over the U.S. grows by another $4.6 trillion.”

Jim continues: “The individual developing economies may be smaller than the U.S., but collectively they are far too big to ignore,” especially since they “influence world prices in key commodities such as oil, natural gas, soybeans and manufactured goods including automobiles and communications technology.

“And the more these neutral economies trade with Russia, the less any of them will need U.S. dollars as a medium of exchange,” he summarizes. “The U.S. sanctions are not only failing… but they are contributing to the long-term decline of the dollar as the world’s leading payment currency.”

Turning to the market today, the staid DJIA is down 0.70% to 32,630; meanwhile, the S&P 500 is down 0.35% to 3,970 as the tech-heavy Nasdaq is down 0.20% to 11,500.

In fact, most every asset class is in the red today — with the exception of No. 2 crypto Ethereum, up nominally to $1,550. Bitcoin, on the other hand, is down 0.40%, under $22,000.

Taking a peek at commodities, a barrel of West Texas crude is down 1% to $76.76; gold is stuck at $1,818.10 per ounce and silver is down 0.40%, just above $20.

“Gold is the most discouraging asset of them all as bulls and bears battle for control following another sloppy, trendless month,” says Paradigm’s market analyst Greg Guenthner.

“The promising rally off the October lows hit the wall once the calendar flipped to February. This time around, gold hit the wall at $1,975, then dropped four straight weeks.

“It’s important to understand what went wrong with the gold rally,” Greg says. “The dollar has an inverse relationship with stocks and commodities. Dollar up, stocks and commodities down. Simple!”

And after losing steam for the last three months, February was a turning point for the U.S. dollar index. “The move stalled the gold and silver rally and slammed the miners,” Greg points out.

Buck Break Down

“The February rally has lifted the dollar index back to 105, an important pivot going all the way back to last summer. This is the same level where the buck failed in December. It’s also where that short relief rally turned south in early January.

“What happens next is critical for gold (and stocks, for that matter),” says Greg. “If the dollar index can’t break above 105 and turns lower, there’s little doubt we’ll see a rally in precious metals.

“We can also assume this would be a significant rally with some staying power, since a rejection at 105 would probably lead to the continuation of the dollar’s downtrend.”

And in other gold-related news, we turn to Paradigm’s chief mining and minerals expert Byron King who’s our eyes and ears — as well as a guest speaker — at the Prospectors & Developers Association of Canada (PDAC) event in Toronto.

“This is not your dad’s PDAC, let alone granddad’s,” Byron says. “Now mining is rebranding as the ‘critical minerals’ sector.

“It’s not just me saying this,” he continues. “It was Sinead Kaufman, chief executive of minerals at venerable mining giant Rio Tinto, who delivered a keynote address on Monday morning.

“The real message of her talk,” says Byron, “how Rio is positioning itself to be part of a massive global industrial transformation in the realm of decarbonization and increased electrification. And it’s not just the end products like selling more copper, although that’s right up with where things are evolving.

“Rio is also decarbonizing internally. It’s working to increase use of ‘green’ electricity, via solar and wind power, if not traditional hydro. It’s also working to reduce diesel fuel burn, which is saying something when you run a global fleet of very large mining equipment, many the size of a house. [Rio’s also] working on projects to ‘capture’ carbon from the air and waste streams and isolate it.”

Byron adds: “Rio is putting its money where its mouth is, with immense new investments in research and development.” Per Kaufman: “We know that for many of our goals, the technology doesn’t exist even to begin to do what we want.”

“So Rio and partners will have to invent the technology or enable the invention downstream,” says Byron. And speaking of downstream, lest you think traditional gold and silver investors weren’t in attendance at PDAC…

“Sprott is selling gold and silver here,” Byron reported Monday from the Metro Toronto Convention Centre. “$1.3 million worth.

“They take credit cards…

Source: Byron King
A one-of-a-kind vending machine…

“Meanwhile, PDAC is mobbed,” he says. “Not certain of attendance numbers, but well over 20,000 would not shock me. And it’s a worldwide audience.

“On Monday morning, there were so many people entering the center that one of the main escalators broke.”

Byron returns home from PDAC on Thursday, and he promises more news from the precious metals and “critical minerals” sectors later this week.

Call it an about-face of epic proportions: “We are putting out a clear call to all of our shops, do not allow people to enter the store without taking off their face mask,” said NYC Mayor Eric Adams on Monday.

“Let’s be clear, some of these characters going into stores that are wearing their mask, they’re not doing it because they’re afraid of the pandemic, they’re doing it because they’re afraid of the police,” Adams said.

Gee golly whiz, ya don’t say!

Mask No Entry

At the same time, an aide to Mr. Adams clarified that there is “no legal requirement” to not mask up. (Dizzy yet?) So it sounds as if the mayor is placing the onus on shopkeepers to police customers, which, honestly, sounds like a recipe for disaster.

Another plot twist: “The city has seen reduced rates of crime across most categories,” says the NYT, “from murder to petit larceny, for the first two months of 2023 compared with the same period last year, Police Department data shows.”

But uniting with fellow power trippers and control freaks, Mayor Adams can’t stop ratcheting up the fear factor, going as far as saying he’s “never witnessed crime at this level” — even though he was a NYC transit cop in 1990 when there were 2,262 recorded homicides in the city.

It’s as if Adams has gotten trapped in a paradox of his own making… and we can’t help relaxing into a pool of schadenfreude.

Come on in, the water’s just fine…

Best regards,

Emily Clancy
The 5 Min. Forecast

Emily Clancy

Emily Clancy

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