The War in Ukraine is a “Venus Fly Trap”

This is the most difficult time in my 50+ years of investing because the world as we have known it since post World War II is rapidly changing with the West and its very dishonest fiat currencies very rapidly declining toward the dustbin of history. Most all of America’s institutions now are seeking to overthrow the Constitution while pretending to defend it, and that includes the Federal Reserve Bank that talks tough but clearly is manipulating markets to keep equities from collapsing as they should if ever we were to turn away from imaginary money to the real thing. That real thing of course is gold and we know that financial institutions use fantasy money in the futures markets to keep a lid on gold lest the masses run from fake fiat money to the real thing.

I wouldn’t nominate Vladimir Putin for sainthood, but one thing you have to say for the guy is that he understands what honest money is while the PhD economists at the Fedremain clueless. When he required unfriendly countries to pay for oil and gas in Russian rubles or in gold, it was an economic weapon against the West, which, as he said, issues “imaginary money”—meaning it has nothing backing it. Putin is right and I think he is in the process of turning the Western world upside down. The War in Ukraine is a “Venus fly trap” that has sucked the West into its web by responding with sanctions and shutting Russia out of the global economic community. Russia has done nothing but prosper since then and the decrease in food prices there is a metric of this prosperity that resulted from a gas/gold-backed ruble. As David Stockman said on my radio show, sanctions will hurt the West far more than they will hurt Russia. Looks like David was right.

For now, the West is able to keep a lid on gold, but the chart on your left provides a long-term perspective that suggests the yellow metal is on a springboard for the next major rise. But I also wondered if it might need to test the long-term trend line as it did in 2015 and 2018. I posed that question to Michael Oliver and this is what he said, Always possible, but I don’t buy into the widespread market wisdom that the range must break out downside just like 2011 top and produce massive percent decline.  Long-term momentum factors argue that if break below March 2021 low occurs, look for a buy pivot. 

Then Bob Moriarty in an interview posted at based on anti-gold sentiment, said he thinks “we are days or minutes from a major low in gold and silver.” Is this simply wishful thinking or might both of these bullish views be correct?

One thing I think is for sure is that Putin is forcing the West to recognize the fact that the days of “fantasy money” are nearing their end. For decades the U.S. has used its military to force countries around the world to accept the dollar as the world’s reserve currency. Even though our ruling elite seem unable to grasp the reality that money over the long term cannot be based on military force but rather production and value, Putin is forcing the issue. Not only is he ready to let Europe freeze to death this winter unless the sanctions against him are rescinded, but also, Russia and China are preparing to replace the dollar with gold and a basket of commodities. It’s only a matter of time before the West will be forced to come to its senses.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.