Precious metals volatility in 2021-2022 stemmed from silver approaching $50/oz, with manipulation through margin requirement changes, mysterious market slowdowns, and traders rotating profits into alternative markets like oil.
The Fed’s reserve management purchases of up to $40B/month combined with liquidity issues in private equity/credit drove investors into precious metals as a risk-off monetary asset, then forced exits to address liquidity problems.
The 2025 Israeli attack on Iran (US-supported) destroyed capital and business activity in the Persian Gulf and Levant, disrupting global petrochemical consumption, raising production costs, and putting hundreds of millions at risk.
Persian Gulf states became major gold liquidators due to oil asset destruction/idling, regional exit desires, and discount gold prices in their markets, demonstrating gold’s function as a monetary asset during crisis.
Precious metals markets face decreased demand and increased supply until exhaustion or relief, then market focus shifts to credit crisis, asset overvaluations, and government debt obligations, while gold maintains long-term purchasing power stability in free markets except during government intervention.
Strait of Hormuz closure triggers world economy collapse within 2-3 weeks through nonlinear supply chain breakdown, yet US struggles to reopen it despite military superiority, revealing gap between power projection and operational reality.
Iran holds escalation dominance over Gulf desalination plants supplying 60-70% of regional water to 100 million people, creating humanitarian crisis leverage that constrains military responses in extreme heat conditions.
Australia faces diesel shortage in 8 days threatening iron ore and copper exports, while Taiwan has 17 days of LNG remaining, risking semiconductor production and cascading global supply chain failures.
Gold prices drop as investors liquidate for cash while 10-year Treasury yields stay elevated at 4.4% with no safe haven bid, signaling unprecedented financial market turmoil and liquidity stress.
60/40 stock-bond portfolios fail as correlations break down during crisis, unlike 2008-09 when bonds protected against equity falls, requiring investors to adopt volatility hedges and puts instead of traditional allocation.
Iran’s former IRGC commander explicitly stated strategy to collapse global economy by driving oil to $120 and waiting for US support to wane, treating economic warfare as primary weapon.
Drone warfare revolution renders aircraft carriers obsolete as they can be targeted from hundreds of kilometers away, shifting military advantage from naval to land power comparable to Genghis Khan’s stirrup innovation.
US Treasury unsanctioned Russian and Iranian oil amid Hormuz conflict despite Russia involvement, exposing lack of planning and contradictions in maintaining dollar hegemony without energy leverage.
China operates as only nation actively sailing vessels through Strait of Hormuz while US allows passage, raising questions about actual US power and control in the region.
1956 Suez Crisis parallel shows US undermined UK sterling to establish dollar hegemonic reserve currency, now US faces similar financial and fiscal weakness threatening its own currency status.
Multi-currency payment system with gold settlement emerges where currencies handle transactions but surpluses settle in gold, returning to pre-1922 monetary system and ending currency reserve double counting.
Petrodollar system proves unsustainable as US must generate global dollar demand through deficits that hollow out industrial base, creating contradiction where surplus needed to supply dollars destroys domestic production capacity.
China possesses resources world wants like gold and silver but demands little in return, mirroring opium wars draining UK silver and Roman Empire treasury depletion from silk and porcelain trade.
World shifts from abundant to scarce environment where owners of real assets set rules not buyers, making gold most neutral settlement currency when trust is low and scarcity is high.
Alternative payment systems developed quietly over last 15 years give countries options beyond dollar, forcing compliance with yuan payment demands to maintain trade access with China.
In market declines, project your discomfort onto competing participants to recognize that the same trauma creates more forced sellers than buyers, positioning you as a “lonely bid” with significant advantage over less solvent market participants who must liquidate.
“Buy hate, sell love” means selling when markets are infatuated with an asset and buying when investors react with disgust, as speculators make mistakes both ways by selling at discounts to patient investors willing to act contrarian.
Royalty and streaming companies in mining remain unaffected by capital or operating costs, providing inherent structural advantages through all market cycles that insulate them from the operational risks facing traditional miners.
High-quality precious metals producers like Wheaton represent the most conservative expression of a 5-10 year fondness for gold, warranting purchases even when fully allocated because they function as absolute stalwarts in the gold business with proven durability.
“Buy low, sell high” requires practice to overcome discomfort during market declines, demanding investors focus on long-term fundamentals over short-term price moves while others react emotionally to volatility.
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