EUROPE HAS TWO OPTIONS: ADAPT OR DIE.

4 March 2025

Europe at a Crossroads: Stuck in the Past While the Future Moves On

European leaders have been living under the stone of American protection for too long, detached from the realities of power, from any sense of real responsibility for the future of their Union, seemingly unaware of the changing global order. Decades of passive reliance on the U.S. security umbrella have dulled strategic thinking, creating a leadership class that clings to globalist ideas and outdated alliances rather than adapting to the new multipolar world made up of self directed nations. This is despite America making it plain that it wishes to withdraw from Europe in order to focus on Asia. It seems that Europe clings to its belief and demand that America come to its rescue. 

Trump emphasised to Zelensky in the Oval Office Friday that "security guarantees" would inevitably drag America into direct conflict with Russia and risk world war three. Bear in mind that this only repeated what Biden said back in 2022, and Obama said in 2015 that Russia has "escalation dominance" given Russia's geographical proximity and feeling of threat if Ukraine were to be used as a base for American missiles.

So in short, nyet means nyet and no means no, but Europe doesn't seem to get it and is threatening to go it alone, however risky or

Impossible that seems, powered by stolen Russian assets.

Denial and Stagnation: The Struggle to Adapt

This is a classic case of denial syndrome. Instead of embracing change, European leaders struggle to maintain the status quo, even as the ground beneath them shifts. Keir Starmer’s comfort embrace of Zelensky at the London Summit last Sunday was a telling moment - not a gesture of genuine strategic calculation, but a comfort-seeking reflex, clinging to familiar narratives rather than exploring real solutions.

The irony is painfully clear when looking at the European Union. The EU operates as a bureaucratic machine, obsessed with process, detached from outcome. It follows established frameworks, oblivious to whether they actually serve Europe’s long-term interests. The EU’s lack of vision is how a once-dominant continent becomes sidelined.

The Future: A New Security and Economic Order

For those willing to see straight, the future is ripe with opportunity. What if Europe rethought its security architecture to remove the threat - and cost - of perpetual war? What if it forged new economic ties with Russia and China, integrating into global supply chains rather than isolating itself? The Belt and Road Initiative (BRI),  digital trade networks and payment systems (Swift, MIR.. ) offer openings that could redefine Europe’s economic position - if only its leaders had the courage to pivot.

Meanwhile, America is "eating their lunch.” While Europe wastes time in summits, the real power realignment is happening elsewhere - between America, Russia, and China. Whether Europe likes it or not, that is where the future lies.

This is a time of macro economics and

government finances over geopolitics. Trump wants to reindustrialise America, restore competitivity through tariffs lower costs and increases in productivity, balance the books, end mass immigration and recreate a coherent society based on more traditional values and the work ethic.

Elon Musk, the Disruptors, and the Future of Power

Figures like Elon Musk - quite possibly America's next president - exemplify this new paradigm - a world shaped by technology, logistics, and pragmatic geopolitics, rather than outdated ideological commitments. Over the next decade, the rise of AI agents, the linking together of digital economies, the completion of transport channels and payment systems, and the expansion of space industries, will mark out the  superpowers. Europe, locked in self-referential politics, suffering from severe russophobia, is failing to see where history is going and despite its wealth and size, cannot be in that list of superpowers.

This isn’t personal - it’s not about a grand conspiracy or a secret program. Sure, America is leading that way for its own survival, but it’s just progress unfolding before our eyes. The world is reshaping itself, still under American leadership, though we are now in a multipolar world. A multipolar world requires listening and cooperation. The BRICS would be happy with that and with the dollar as reserve currency, if America could be trusted. 

It is a world full of emerging opportunities, but does Europe want to learn from its mistakes and join in, or not?

Thinking about it, what could happen is what Europe fears the most, which is a Russian takeover - but not by military means, it doesn't need to, by default it could simply fill the vacant position of leadership in Europe today and be welcomed in by the people. Seems unlikely? Well look at politics in central east Europe today...

Europe: On the Wrong Side of History

Watching the recent London Summit, one thing was painfully clear: Europe is barking up completely the wrong tree. It is doubling down on old alliances, clinging to U.S. dependency and imagining that the U.S. will intervene militarily in a war on its behalf. It is ignoring the shifting tides of power and in the case of Ukraine, realities on the battlefield. 

Meanwhile, those who see what’s coming - the integration of East and West, the rise of economic pragmatism over ideology - are preparing to ride the next wave of history.

In the end, it’s simple, it's about how you manage change: adapt or die.

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UNDERSTANDING ZELENSKI'S HISSY FIT

2 March 2025

Well, that's right—it's very difficult to make sense of what's happening here. We can understand the events as they unfold, but explaining the thinking behind them is much harder.

To me, the simplest way to understand the relationship between a metropole and its vassal states is to see it as a parent-child dynamic.

The metropole acts as the responsible authority, making decisions and providing stability, while the vassal behaves like a dependent child—lacking responsibility, struggling to pragmatically assess consequences, and making demands based on emotion rather than a well-thought-out strategy.

We armchair analysts can observe these moves from our Olympian heights, where action and reaction are easy to interpret. But for the "child" vassal, subject to the authority of the parent metropole, the bigger picture is often misunderstood. Instead of strategic reasoning, emotions guide decisions—leading to hissy fits when demands aren’t met or sulking or self-harm, when things don’t go their way.

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WHERE IS THE GOLD

26 February 2025

WHERE IS THE GOLD?

Where is australia's gold

We all remember when Germany asked for its gold back, in 2013, and was told delivery would take seven years. 

Are the countries asking for repatriation of their gold from the LBMA being told the same thing? 

And if LBMA runs out of gold and goes bankrupt, what happens to the owners of ETFs with unallocated gold? Eg SGLN? SGLN is backed by physical gold, valued at spot prices, held in LBMA and certified by  Blackrock. It is the most convenient and least risky ETF.... But what happens if the LBMA vault turns out to be empty. And it goes bust?

In fact, this hypothecation and rehypothecation is how governments manipulate the price of gold.The paper gold market (COMEX, LBMA) trades maybe 20 times more contracts than there is actual gold. It is done on futures contracts. Means banks can massively short-sell gold futures, artificially suppressing spot prices.

Why do banks do this?

The truth is that their currencies are devaluing all the time. A fiat currency is a currency that is not tied to the value of any asset. So governments* can just borrow all they want, they can print as much as the desire. They can have these mad spending programmes where there's no proper fiscal control, i.e, spend more than they tax. The States is doing two trillion of extra debt every year.

* with their own currency.

So why do these fiat currencies devalue all the time? 

Devalue means that they buy less and less of what people want in the real world. And this is because the governments are constantly expanding the money supply, so more and more money is available for the same amount of goods, which inflates the currency.... more and more currency is needed to buy the same thing.

Fiat currencies are not tied to an asset in the real world, this is the trouble and the blessing, but gold is. If central banks didn't keep shorting the price of gold, then gold would rise in value according to the inflation in the money supply and be worth an absolute bomb, and people would see gold as a reliable store of value - as it has been since the time of stonehenge - and put their money into gold and not into government issue treasuries, which are promises to pay, packed solely on the credibility of the government..

So if gold was only traded in physical form - ie if you buy at the spot price and take delivery of the physical gold itself - prices would without doubt be much higher. And when the day of reckoning comes, this is the day where the government can no longer borrow enough to meet its obligations, which in includes paying interest on it's treasuries, then we'd expect gold to rise to its real price, while paper assets burn.

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HAVE MARKETS PEAKED, OR IS THIS JUST A PAUSE

22 February 2025

There's something going on in the markets. They are set to pause, perhaps worse. Why?

Markets seem to be topping. Take VHVG, SGLN, ZPRW and WSML, draw a horizontal line at what looks like the top, and then mark in a stop loss 7% below that. As / if price dips towards that stop loss, we should be thinking about what to do next if we are to preserve wealth.

For example, this chart, taken from 11 February, shows that for YTD, VHVG (developed world markets) has been trying without success to breakthrough 92.30. It's much the same for the others, and it's still the same today.

So it seems that after reaching new peaks, financial markets have decided to take a breather this week, spooked by the spectres of a trade war, the possible return of inflation meaning at that interest rates will be on hold, and the ongoing geopolitical uncertainties in Ukraine, Palestine and the Middle East, and China. 

The major indexes may have paused, but overall momentum remains intact. There is confidence from continuing positive fundamentals and earnings results, a process both started in Riyadh to end forever wars, to judge from volumes investors keep buying. Markets on the march often pause to rest and when good news emerges they recover and continue up - recall the taper tantrums of 2013, the covid crash of 2020 and the fed hike fears of 2023.

For a good understanding of the  macroeconomics of the moment, listen to Luke Gromen. Interesting answer on revaluing gold to question two. It's hard to see how this could ever happen. For a fuller explanation, listen to Joseph Wang. 

The baseline understanding of the price of gold. is that 

•  rising inflation would be dealt with by rising interest rates, which would strengthen the dollar and increase its attractiveness as a safe haven vis-à-vis gold

• remember too that, as a safe haven in times of geopolitical attention, investors prefer gold - safer them treasuries. But note that with the arrival of Trump, tensions are lessening. 

• And thirdly for reasons - the narrowing interest rate differential between Japan and the States - although the dollar has been weakening against DXY, this has not led to a decline in the value of gold.

• So the conclusion would seem to be that gold is at a high and possibly an all year high, and it might be worth switching to silver.

With significant events on the horizon this weekend, German elections being one, and next week, investors should brace themselves for some volatility, but the overall message is continue as you were, cautious commodities, keep an eye on the Japanese Yen as this could likely be the main driver of US equity markets for the next few months.

Footnote - risks are building:

It's worth noting that margin balances are increasing and investors are piling into ETF, with leveraged ETFs getting more attention than normal. 

This is okay as momentum is still there, it is a sign of confidence. But if there is a reversal, the losses could be big and then you get what's called margin call and traders could be forced to sell assets in order to cover their borrowings. This will reduce liquidity and have a downward effect.

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