Gold & Silver v Cyber Attack

Posted | 25/10/2016 / Views | 3254
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We are off up to Port Douglas this week to be part of “The Great Repression” conference featuring Jim Rickards, Jim Rogers, Satyajit Das and the Daily Reckoning guys we often reference.  All 650 tickets sold out in the early bird release and it should be a very interesting couple of days and we hope to write a little about it for you.  If you are up there, come and say hi.

Topically, one of the key advantages Jim Rickards talks about with gold (physical not paper) is that it is completely outside the digital world.  You will be hard pressed to name another asset that doesn’t rely on electronics or the net to either exist or at the very least trade.  Even property titles nowadays are held electronically, not in paper deeds.  Why topical?  Well last week we saw yet another large scale cyber attack which brought down much of the US’s internet.  We’ve previously seen still unexplained outages on Wall St demonstrating a cyber attack can bring down the world’s biggest financial market.  Just a couple of weeks ago the already tense relationship between the US and Russia escalated when US Vice President Biden promised a “clandestine” cyber-response in retaliation for Russia’s alleged hacking interference in the US presidential election.  Putin of course did not take kindly with the Kremlin responding “To the backdrop of this aggressive, unpredictable line, we must take measures to protect (our) interests, to hedge risks,”.  What that means is anyone’s guess but highlights the degradation of relations which Russian’s UN ambassador described thus “The general situation I think is pretty bad at this point, probably the worst … since 1973,”.

The point is, should, as some believe, the next war will be as much fought and won electronically (EMP’s and the like) as with weapons that go boom, gold and silver are one of the very few assets immune to an EMP or similar.  History shows too that in times of conflict and even heightened geopolitical tension, gold and silver prices surge.

Don’t get us wrong, whilst many are banging the ‘WW3 is upon us’ drums at the moment, we are not saying that is at all the case however there is no denying the escalating geopolitical tensions at the moment right across the globe.  It highlights the many advantages to a hard asset that has traded freely for thousands of years, that has no counterparty risk, and not only can survive nearly any attack, but actually thrives in that environment.