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Why do the current geopolitical conditions present potentially explosive gold prices?

*Jim Sinclair's MineSet, by James Sinclair, January 23, 2006

“The price of gold sits on a few explosive possibilities:

The Iranian situation is extremely dangerous economically and politically. China and Russia have large investments in Iran and will support Iran’s interests. Iran is making fun of the West, perhaps trying to goad it into action. France’s Chirac did not speak of the use of nuclear weapons against terrorists for political reasons as some might want you to think. What he did was to plow the road for the US to surgically bomb Iran with deep penetration nuclear weapons. Israel cannot risk a nuclear capable Iran. Now Israel is using restraint because they know the US will handle the matter for the same reason Israel stood aside before while Scud missiles met Patriot missiles in thedefense of Israel.

UBS, one of the world’s biggest banks, yesterday confirmed it had stopped all business dealings with Iran, advising clients to seek alternative banking arrangements. Who cut ties with who is the real question? Iran is moving out of the euro and Europe and not into dollars. So this brings up the conundrum of what is in fact the reserve currency of choice. It should be kept firmly in mind that the gold-starved Muslin central banks are devoid of the currency of choice (gold) according the Koran. My position is that they won’t be for long.

The replacement of the aging Monarch of Kuwait is accompanied by an unclear order of succession. Sources say this will cause significant delay in the re-entrance of international oil and oil service companies back into Kuwait who were booted years ago. That in turn means the expansion of Kuwaiti production facilities will not occur.

All that is in the face of strong indications the Kuwaitis have been lying like bandits about their oil reserves. Any cause for delay of the return of international oil and oil service companies serves as a plausible denial for their lies concerning their reserves.

The Spratly Islands undersea oil and gas discovery is being claimed by China although it appears to belong mostly to Japan. Japan is an ally of the US. The US has stationed a nuclear carrier at a Japanese port. This is an anomaly with great meaning. This farce of who owns what is moving quickly towards force.”


*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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