Shifting World Financial Currents: Global Economic Uncertainty

Global Economic Uncertainty

Economic issues are troubling enough here in the United States, but our issues pale to those in the EU.  We can vote politicians out of office, but in the EU, many wide-ranging decisions are now made by unelected bureaucrats in distant forums.  They have the worst of all worlds and there is no real turning back because the EU members gave up their currencies to join, and reestablishing a sovereign financial structure is nearly impossible.  Only Great Britain had the foresight to keep the Pound Sterling so that they could leave.  Whatever short term struggles they may have will far outweigh the problems with collapsing EU economies in the future.

We may think that we are insulated from European decision making, but we now see how the bureaucrats in Brussels or Berlin can make horrible energy decisions that sap our resources and raise prices here.  We can see how poor decisions concerning military preparedness across all of Europe can weaken our military stockpiles, reduce our ability to meet other international challenges, and have the risk and replenishment fall to the American taxpayers.

Without a doubt the growing number of economic issues around the world are becoming a personal issue for Americans.  The interconnectivity of all nations for goods and services makes contagion a real possibility.  We need to intelligently digest what we hear and read, and be informed enough to draw our own conclusions, but changes are coming.

  • The Bank for International Settlements recently warned about the ballooning of derivatives and settlements where counterparties are unidentifiable.
  • After decades of negative interest rates, the Bank of Japan blinked and raised rates to save the Yen.
  • To curb inflation the Federal Reserve had to start raising interest rates, knowing the resulting interest payments are unsustainable.
  • Congress and the President are either so ill-informed or so ignorant of economics that they pass bills that insult one’s intelligence and result in more economic pressure on every citizen.
  • Lebanon recently devalued their currency by roughly 90%, and more nations in the region and beyond are headed there.
  • Seventeen African nations are being given debt relief/forgiveness by China, further cementing their hold over those nations.
  • As many as twenty-three African nations are at risk of defaulting on their sovereign debt and the creditor nations are not equipped to deal with the fallout other than with more deficit spending.
  • The BRICS consortium (Brazil, Russia, India, China, and South Africa) is working hard, every day, to dethrone the dollar as the world’s reserve currency and building their own reserves to bolster their claims.
  • Many central banks are now talking about their own digital currencies, an ominous and poorly understood development that will empower bureaucrats to spend even more with no real debt limits.

All these changes can and will have some effect on our own domestic financial picture.  One may think these events are far away and/or have no effect on them.  But the interconnectivity of world financial issues now makes us vulnerable to crises we would only read about in past generations.  Clear examples of the connectivity challenge are the supply chain issues experienced during the Covid pandemic, and our supplying military materials for the Ukraine.

Unfortunately, Congress is adding fuel to the fire of uncertainty, and our own domestic spending practices now make foreign actions a personal issue for each of us.  We cannot reasonably supply all the military support for the free world.  European nations, Japan, Taiwan, Australia, and Great Britain will need to step up their spending and rely less on us for protection. 

Stopping Russia from invading the Ukraine is a European issue, not an immediate one for the United States.  But over the past six decades politicians here and abroad have allowed us to become Europe’s standing army.  Now that they need to stand up for freedom they lack the will, manpower, and military might to do so.  Europe has slowly turned into a socialist continent with little willpower to face any threat to freedom.  Their military readiness has been subjugated to the desire for social programs and fostered a collective weakness in the face of danger.  Great Britain is marginally better, but only because of their exit from the EU, maintenance of their own currency, and at least some recognition of the need for a standing army as a deterrent to the rest of Europe and Russia.  We can only hope that there will not be a repeat of World War I and World War II with Russia as the aggressor nation.

We face similar challenges in Japan, Taiwan, and Australia.  Only Australia comes close to defending themselves, but they are dependent on us selling them used military hardware to have even the hint of a deterrent against China.  Australia, which we used to think of as rugged and independent, has now fallen under control of many socialists and far left leaning politicians.  Their youth often copy what happens here, and what is happening here is not always positive.  Australia’s economic picture would take a serious turn for the worst if China were any more aggressive.  As in the United States, youth and politicians are driving a climate agenda that will weaken them financially.

China and Russia are playing a better political game than the free, democratic countries around the world, and it shows.  They are not smarter, but they are more focused and united behind a plan to dethrone the dollar and create financial chaos.  They are using our freedoms to turn our citizens against each other.  They have infected our youth with anger, arguing about nonsense like pronouns, genders, and climate change, while they push a political and economic agenda that only favors them.  Global financial movements eventually become local issues when your own politicians lack the ability or understanding to build a strong financial backing for your currency through sound political decisions.  The movements can become even more dangerous and generational when we let inexperienced young people set the agenda for political, social, and financial matters.

This article and series were completed with the collaboration of freeman.

Research Source Materials

Saint Louis Federal Reserve Economic Data (FRED Database),, Various Dates, tables, and Charts.

World Gold Council 2022 Year End Report,, December 31, 2022.

Various Sources of broadly disseminated Market data and Central Bank data..

Three Part Series

This article is the second in a three part series on economic stability and the usefulness of gold in this environment.  The full series can be seen here.

DISCLOSURE: This commentary is being communicated as general information and observations only and should not be taken as investment advice.  It is not investment research or a research recommendation, as it does not constitute material research or analysis.  The actions that you take as a result of information contained in this document are ultimately your responsibility.