politics is an interesting new jargon in literature.
It refers to how the commodities within the earths crust
impact the positions of power that possession of these commodities
brings. Of significance in this geopolitics is the possession
of precious metals and oil.
Gold and platinum, two of the most precious metals on the
commodities market, are priced higher than ever before. Gold
is trading at USD 708.3 per troy ounce. Gold has not been
priced so high since the 1980s.
Platinum is now priced at USD 1235.50 per ounce. With oil
quoted at USD 70.80 per barrel, savvy investors follow a belief
that precious metal prices tract the price of oil, and hence
One of the relevant factors is gold and precious metals have
always been a hedge against inflation and rising oil prices.
What makes commodity trading such a store of power is the
fact they have a value that is greater than the values of
stocks and bonds.
The underlying edge in commodity trading is that this sector
of the market thrives on political crises, uncertainty, bad
weather and the threat of war. This makes them independent
of single companies and single governments.
It is what separates them from the trade in stocks and bonds.
Companies can go bust and governments can so mismanage finances
and remain heavily indebted for decades. Investing your dollars
in companies that issue stock and governments that issue bonds,
therefore, can result in negative returns and net losses for
The commodities market is not a popular one for the average
investor. This is principally because of the risk return trade
off. Typically, the risk is very much higher, in the commodities
market, than the risk in the bond or stock market sector.
Remember the rule of thumb in the market is that higher risk
engenders higher returns or alternatively higher losses.
Somehow the neo-savvy investors get caught between the devil
and the deep blue sea all the time, and the day trading phenomena
appears to be a prescription for failure, on the one hand
or on the other: acute good luck, at best.
But if you have the solid base from years of conservative
savings, inheritance, wise investments and if youve
covered all your risks through the protection of insurance
and taken the requisite measures to conserve and preserve
your estate, the commodities sector skill resides in the knowledge
of what is happening in the geopolitics.
Who is at risk for war? What resources and commodities do
they possess. Where are the trade deficits among the political
powers? Who are the currency manipulators? What is happening
with short interest rates in the US, and why. These are indicators
of positions of power.
The experts are now looking at China, India, Syria, and Iran
as centres of controversy. Syria and Iran seem to be at odds
with other world powers. Is there a chance of war in these
regions? What is the national preparedness for war in these
China is being viewed as a massive net exporter, much to the
detriment of trade relations with other world powers. Will
the strength of their army prove a deterrent for war? Or will
new policy positions have to be mediated?
These are really the questions that lie beneath the power
positions in the realm of geopolitics. Knowledge is power
in a mundane sense!
But how you use knowledge really determines how much money
you get to keep. So if you want to swim with the sharks, you
must learn to second guess the policy plays on the political