(Kitco News) - Amidst record gold prices, geopolitical strategist Robert D. Kaplan suggests that the rush to hoard gold may signal that major players are preparing for deeper financial instability.
Kaplan, author of 'Wasteland: A World in Permanent Crisis,' observes that central banks buying gold may indicate preparations for capital flight or a "deepening economic-political crisis with the U.S." According to Kaplan, hoarding gold often means one is pessimistic about the near and mid-term future. "That could be a danger signal," he added.
According to the latest report by the World Gold Council, central banks dominated the gold market last year, collectively buying more than 1,000 tonnes of gold for the third year in a row.
In an era marked by escalating geopolitical tensions, economic instability, and the rise of authoritarianism, Kaplan suggests the world is entering a state of "permanent crisis," drawing parallels to the fragile Weimar Republic of the early 20th century.
Key points made by Kaplan:
- Weimar Analogy: Kaplan draws a comparison to Weimar Germany (1919-1933), characterized by hyperinflation, political extremism, and economic collapse. He notes that the legislators created a system "that nobody could rule".
- Interconnectedness: Kaplan argues that technology has shrunk geography, enabling crises to ricochet around the earth. "We've reached the point of global integration because technology has shrunk geography so that a crisis in one part of the world can ricochet around the earth and ignite a crisis in another part of the world like never before," Kaplan stated.
- Decline of Great Powers: Kaplan suggests that the U.S., China, and Russia are all in decline, albeit at different rates.
- U.S.-China Conflict: Kaplan warns that a military conflict between the U.S. and China, particularly over Taiwan or the South China Sea, could have a "really destabilizing effect on financial markets".
- Trump 2.0: Kaplan describes Donald Trump as a "world-historical figure" who, even unknowingly, affects history. He anticipates Trump's second term will be tumultuous and could lead to further disorder in the world.
- Gold as a Hedge: Kaplan notes China's hoarding of gold as a signal of potential financial instability, capital flight, and a deepening economic and political crisis with the U.S. He also notes that the recent upsurge in gold buying is a sign that "markets are trying to hedge against geopolitical risk."
- Instability in Iran: Kaplan predicts the collapse of the regime in Iran within the next four years.
