All That Glitters Isn't Gold, Even Gold

New Eastern Outlook
Ulson Gunnar
December 4, 2014

In times of socioeconomic turmoil, gold receives renewed interest. It is seen as a means of exchange with enduring value that can transcend the various currencies that generally displace its use during times of economic growth and stability. However, it must be remembered that gold's value is only as good as the markets within which it is traded. If they collapse, gold's value may become highly unpredictable.

For Gold, Perception is Everything 

Much of gold's value is a matter of perception. Gold's enduring value can be owed to the fact that it has been fully integrated into financial systems since ancient times. Its rarity and aesthetic appeal in ancient times, combined with industrial applications today, have helped it keep its place within international financial systems. While gold holds true value as a natural resource, much of its value still stems from perceived value just like many of the currencies it is seen as an alternative to.

The value of gold is only as strong as the system it is a part of. No matter how valuable gold may be perceived within a functioning economic system, should that system collapse, so too will gold's perceived value. Gold cannot be eaten, used as a source of fuel, nor be used for clothing or housing. Without a functioning market to trade it in, its value becomes highly unpredictable.

Whichever markets survive a hypothetical collapse would serve as one possible means to trade gold. Whether those markets are overseas, or built within the system suffering from collapse, gold's value would depend on the ability for these alternatives to transform physical gold into currency or resources required for maintaining a thriving society. Beyond this, amid a crisis gold could be theoretically bartered, though it would be highly impractical compared to the trading of necessities.

Fighting Back Against Western Sanctions

New Eastern Outlook

Ulson Gunnar

August 24, 2014

While the impact of sanctions leveled against Russia is being debated, one fact is perfectly clear; the dangerous interdependence cultivated by the concept of "globalization" leaves nations vulnerable amid a global order dominated by hegemonic special interests that use such interdependence as a weapon.

Two rounds of sanctions have been leveled against Russia targeting Russian banking, arms manufacturing, and oil industries. Even as the sanctions are marketed to the world as Russia "paying a price" for its role in "destabilizing" Ukraine, Russia has been busy cultivating ties and expanding markets that are increasingly found outside the West's spheres of influence and therefore, beyond the reach of these sanctions. Russia is also looking inward to diversify its markets and seek socioeconomic independence.

Instead of viewing the sanctions as an impassable obstacle requiring capitulation to Wall Street and London, Russia has viewed them as a challenge to sever reliance on unstable markets. More so, Russia's quest for alternative markets is a means of applying its own form of pressure back upon the West. While the West attempts to portray the sanctions as "cutting off Russia," the restrictions do at least as much to isolate the West itself.

Multipolar World Vs Western Hegemony  

In a unipolar world, supranational geopolitical blocs like the EU (European Union), the African Union, ASEAN (Association of Southeast Asian Nations), and regional free trade agreements serve to consolidate and open up the collective socioeconomic potential of the planet to those at the top of this international order. Currently, this constitutes the special interests on Wall Street, in the city of London, and among the special interests converging in Brussels. Interdependence is intentionally cultivated among the various members of individual blocs and between supranational blocs themselves. This ensures that leverage is constantly maintained over each individual national entity, making individual nations incapable of sidestepping collective initiatives of the blocs they are a part of.

China and the Follies of "Megatrading"

New Eastern Outlook 

Ulson Gunnar 

May 12, 2014

As if to stroke the egos of those ruling Beijing, the West's financial journals in chorus announced with enthusiasm that China has become the first 'megatrader' since the British Empire. The Wall Street Journal would report that Standard Chartered economists would even go as far as suggesting Beijing would shed the very economic policies that have led to its rise, and become a champion of 'free trade.'

The WSJ article titled, "Will ‘Mega-Trader’ China Turn Into a Free Trader?" claims, "once a country reaches such an exalted status, Standard Chartered reasons, it recognizes that its interest lies in opening markets overseas and at home."

The Standard Chartered report included a global map showing China's increase in global trade from the 1990's to 2012. It also reveals China's premier trading partner, the European Union, the Middle East and North Africa (MENA) from which it derives its oil, and Africa from which it seeks to procure mineral resources to fuel its expanding production-based economy, all lie along what is known as Chian's "String of Pearls." This global spanning logistical corridor represents perhaps China's largest vulnerability, a vulnerability it is fully aware of and has been engaged in for years attempting to defend.

Beijing realizes that global trade is both a threat and an opportunity. It has taken steps to maximize that opportunity in the short-term, and eliminate the threat in the long-term. This includes attempts to invest in science and technology to reduce its dependency on research and development from abroad, the expansion of its nuclear power network to reduce its reliance on hydrocarbons, and attempts to forge trading partnerships closer to and within its own boundaries. In other words, Beijing is attempting to become as self-sufficient as possible in the long term, while it takes advantage of its "megatrading" in the short term. The latter is providing the fuel for the former.

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