Physics/Precious Metals & Russia ...

 

Gold: Alchemist-hp (talk) www.pse-mendelejew.de/Wikimedia Commons/CC-SA-3.0

We are made of stars, precious metals are made when stars exhaust their primary fuels of hydrogen and helium and move toward heavier elements. like iron. to burn before collapsing, thus producing neutron stars, one byproduct of supernova explosions of entities far larger then the sun. (think black holes) When neutron stars merge, precious metals like gold, silver, platinum and palladium are generated but ... as stated before ... it's complicated. :)

What Makes a Metal Precious?

Precious metals are elemental metals that have high economic value. In some cases, the metals have been used as currency. In other cases, the metal is precious because it is valued for other uses and is rare.

How PMs are made ...

The 2017 neutron star merger that confirmed Schramm’s idea convinced many astronomers that these events, once considered exotic and far-fetched, made nearly all of the gold, platinum, and other r-process elements in the universe. Ji, now at the Carnegie Observatories in Pasadena, CA, says he too thought that neutron star mergers were the answer, and he still leans that way, but he and others are also considering alternate theories. “I think most astronomers outside the field said, ‘Oh, great. This looks like the thing is all solved. Now it’s neutron star mergers,’” says John Cowan at the University of Oklahoma in Norman. “But I think the people working in the field realize there’s still some complications to solve” (9).

In fact, supernova explosions are a necessary part of the solution, says Chiaki Kobayashi at the University of Hertfordshire in England. Neutron star mergers “are not enough” to explain all the r-process material in the universe, Kobayashi says. She and her colleagues recently set out to understand the origin of every element from carbon to uranium. They calculated how stars with different lifetimes endow the galaxy with different elements, then compared the observed compositions of stars from young to old. For example, short-lived high-mass stars make lots of oxygen, so this element appeared early in the Milky Way’s history, whereas iron took longer to form, because most of that element comes from the explosions of long-lived stars. By comparing their models of the galaxy’s chemical evolution with actual observations of europium and other r-process elements in stars of different ages, Kobayashi’s team concluded that neutron star mergers made only a fraction of the universe’s r-process material; some rare type of supernova made the rest (10).

Palladium: Jurii/Wikimedia Commons/CC-3.0

Why all of this background data, well ... guess who has most of this stuff?

Andy Schectman, President & Owner of Miles Franklin Precious Metals

Q: Before our podcast, I asked Andy what the demand for physical looked like since the Ukraine/Russia conflict began.

A: The demand for physical metal over the last two years has been extraordinary, but nothing like the craziness that we have experienced since the Ukraine invasion. For two years, I have publicly talked about the supply constraints, rising premiums and dwindling inventories becoming a serious concern. It is all happening in real-time now.

Getting product used to be the least of my concern and now is the industry's greatest challenge. The market is almost 100% void of any secondary product, nobody sells into this environment. The higher the price goes and the crazier the world gets, only strengthens peoples’ resolve and concern for holding metals to begin with.

It gets better ...

The United States has militarized the dollar by restricting its use by countries the administration wishes to punish, such as Iran and Russia. A reserve currency is supposed to be available to everyone, not just the nations we choose. 

This is the death knell to the dollar. Countries around the globe are coming to realize that the U.S. cannot be trusted and that anyone can be locked out of the swift system at a whim. China and Russia hold the most gold in the world, after the U.S., but that is if you believe that we still actually have the 8,000+ tonnes at Fort Knox and that our gold is not incumbered – pledged to other countries - and that is a big “if.”  

We are now facing World War III, but this time the odds are it will be an economic war, not a shooting war. The phrase, “the enemy of my enemy is my friend” is taking place before our eyes. We have driven Russia into China’s arms and we are their common enemy. If they released a gold-backed Ruble/Yuan, it would spell the end of the dollar as the world’s singular reserve currency.  

Q: Do you think there’s a chance Russia just stops taking payment anything other than rubles or gold?

Yes, it is possible, but for now, unlikely. The exception is the Chinese Yuan. Russia and China recently signed a trade agreement that is decades long, where Russia will provide China with gas and oil and the trade will be settled in yuan (and/or product from China). The two countries could use gold as a settlement for their trade, but it is not likely. One thing seems certain; Russia will stop accepting the euro and the dollar. 

Q: Who do you think has all the leverage in this Russia Ukraine situation? What do you see the eventual outcome being – and when?

Russia has all the leverage.  The war should come to a conclusion in a matter of weeks, or months at the outside. Russia’s goals were to prevent the Ukraine from joining NATO, and they will get their wish. They also want to set up a new government, one favorable to Russia, and they will accomplish that as well. There may well be prolonged guerilla warfare in the Ukraine and a small Russian occupation force, but the end game has always been a win for the Russians. But once these stars form an iron core, the music stops and the party's over.

Rising prices beget rising prices, so once the marketplace comes to realize that gold and silver are winners, the big money will pile in. We believe that this is the most exciting time since the late 70s to be into gold and silver. As the saying goes, “there is no bull market like a gold bull market.” 

It will be the beneficiary of both fear and greed, nothing else has this dual motivation.  If you don’t see this, you are not paying attention.  The bull market is here, it is real, it can’t be stopped.  God help us. 

It's all about the money.