Among the geopolitical challenges right now are the massive protests that have gripped major cities worldwide. Across South America, Africa, the Caribbean, Europe, the Middle East, and the Far East, there is massive unrest in what are often considered leaderless movements of disgruntled citizens. Some have sought to draw parallels between the conditions that have festered in each region which have led to these protests. While each situation is unique, there does appear to be common themes of excessive government corruption and lack of economic opportunity for ordinary citizens. Some of this unrest is related to distrust of local currencies, which have begun to devalue against the US Dollar and Gold. It is one reason why Gold has reached new all-time highs in 73 currencies world-wide.
While unrest is bad for business, war can be terrible. And with rockets raining down on Israel in between retaliatory strikes against Syrian and Iranian assets, some fear this could lead to a much broader conflict. Such a conflict could potentially involve larger powers such as the United States, Russia, and China. This is because over 1/2 of the world’s oil reserves are in the region, with nearly 1/4 of world oil output shipped through the Strait of Hormuz annually. Most of the oil shipped through the region is heading for China, and any conflict with Iran threatens oil transit through the Strait. Any disruption in the oil markets will mean higher world oil prices, which often correlates to lower stock prices, and higher values for precious metals.