The New Year began on a down note. From economics to geopolitics, neither joy nor prosperity rang in 2015.
World equity markets rattled on the first days of trading. By mid-month the shock waves intensified. The Swiss pulled their currency peg on the euro, pushing it to an 11-year low against the dollar. The Shanghai Index plunged 8 percent. Brent Crude, selling at $115 a barrel in June, was under $50. From Venezuela to Russia, Nigeria to Norway, from Canada’s tar sands to the Marcellus Shale, oil rich nations and the financial sectors that tbankrolled the energy deals were being battered.
It was a sign of the times that was not only apparent in the price at the gas pump; copper, iron ore, nickel and other natural resource commodities tied to global growth, industrial production and personal consumption were also hitting five-year lows. In the US, hailed by economists as the engine for global growth potential, retail sales, which account for some two-thirds of its GDP, fell in December compared to last year and projections, despite the falling gas prices that “experts” said would energize sales, were grim.
Just nine days into the new year, the world was treated to dawn-to-dusk coverage of the attack against Charlie Hebdo-a satirical French weekly with a long track record of printing cartoons mocking the prophet Mohammed-which left 12 people dead. The two men responsible for the crime were identified as radical Islamists by authorities. Paris was on lockdown and much of Europe went on full terror alert with military troops swarming the streets.
In solidarity against what was being labeled a global war on terror, world leaders went to Paris, marching arm in arm to declare their commitment to hunt down, destroy, degrade and dismantle terrorist networks.
By the end of the month, Yemen, Nigeria, Syria, Iraq, Pakistan and Afghanistan were just a few of the major geopolitical flash points wracked by war and washed in civilian bloodshed. The list goes on.
In his State of the Nation speech, President Obama declared America would support the “opposition” in Syria (i.e., enemies of President Assad), oppose “Russian aggression” by “supporting Ukraine’s democracy,” and that US-imposed sanctions and his actions had left Russia “isolated, with its economy in tatters.”
With wars heating up and economies going down, gold, historically the most popular precious metal safe-haven asset, hit four-month highs. Priced in sinking euros, gold was trading at early 2013 levels. The Trends Research Institute had forecast that gold, bottoming at the $1,150 mark, would trend higher as economic and geopolitical conditions deteriorated. Equity markets are extremely volatile. Combined with escalating global unrest, the forecast for gold is… higher prices ahead.