After Brown’s Bottom, the UK Dumpster Dives For Gold

The history of a disastrous decision and its modern remedy. August 13, 2024 [WEBSITE]( | [UNSUBSCRIBE]( After Brown’s Bottom, the UK Dumpster Dives For Gold SEAN RING Dear Reader, When I landed in London in 1999, I didn’t know nearly as much as I thought. Sure, I was “armed” with a finance degree from Villanova. Oooooh… But I didn’t know how things actually worked. What’s remarkable about some things is that you know them in your bones. You don’t know why or how it got there. It’s as if we’re not blank slates at all; our forefathers, whether purposely or not, found a way to make an indelible impression on our very viscera. So when I heard the Chancellor of the Exchequer, Gordon Brown, had sold a boatload of the United Kingdom’s gold, I knew something wasn’t right. I didn’t know why. And I certainly didn’t understand anything about gold then. Of course, gold is never included in undergraduate macroeconomic courses. But by the powers of ancestral intuition or inheritance, I knew this was a wrong move. And so did everyone else… except Brown and his advisors. Gordon Brown was a rare bird among arrogant politicians. He’s Scottish, attended the University of Edinburgh, and received his PhD in History. You’d think he’d have known better. He’s shockingly pedantic, often asking people what books they were reading to test them. He rated himself highly as an intellectual. Like Larry Summers, he’d mix these nonsensical word salads and vomit them out publicly. His colleagues would nod and pretend to understand Brown. You were assumed to have less of a brain if you didn't nod in agreement. But of all the hare-brained things to do, Brown authorized the sale of half the UK’s gold reserves when the market was bottoming out. Hence, it’s called the Brown Bottom. How to Get a Brown Bottom Behold, the 'Brown Bottom'—a moment in history when the then-Chancellor of the Exchequer decided to showcase his brilliant financial acumen. Picture this: It's 1999, and gold is languishing around $282 an ounce, clearly a great time to sell off a significant chunk of the UK's gold reserves. Why not? Who needs that glittery metal that's been a store of value for thousands of years, right? Indeed, the world's financial markets were just waiting for the UK to dump 395 tons of gold onto the market to drive prices even lower! But wait, it gets better. In his infinite wisdom, Brown announced this sale in advance, just in case anyone might have missed the opportunity to take advantage of this fire sale. The result? Gold prices plummeted even further – to a low of $252 per ounce – while the UK was selling, ensuring that the country locked in the lowest possible price. How considerate of him to help everyone else buy gold on the cheap! Of course, in the years that followed, the price of gold didn't just recover; it skyrocketed, reaching over $1,900 an ounce by 2011. And where are we trading now? Nearly $2,500 per ounce, or 10 times higher than where Gordon Brown, PhD, sold it. But hey, who could have predicted that? Surely, not anyone with even a basic understanding of market dynamics. Hence, Brown's decision is now lovingly referred to as the "Brown Bottom," a term of endearment for that moment when the UK expertly demonstrated how not to manage a country's reserves. [Attention! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on [claiming this new upgrade to your Strategic Intelligence subscription]( you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind. [Click Here Now]( The Unintended Consequences Now, this plan isn’t to rebuild the UK’s gold reserves. But I wonder if the Royal Mint would need to employ it if they could just tap UK reserves (if it had any). From CBS News: The U.K.'s Royal Mint, the country's official coinmaker, has opened a factory that will extract gold from e-waste to reduce its reliance on traditional mining and encourage more sustainable practices. "The factory underpins our commitment to using sustainable precious metals and providing a new source of high quality, recovered gold," Sean Millard, Chief Growth Officer at The Royal Mint, said in a statement. "It allows us to reduce our reliance on mined materials and is another example of how we're working to decarbonize our operations." It continues: According to the United Nations Institute for Training and Research, the generation of e-waste is rising by 2.6 million tons annually. Less than a quarter of that waste is properly collected and recycled, "leaving $62 billion worth of recoverable natural resources unaccounted for and increasing pollution risks to communities worldwide." That’s no small number. Of course, when gold is trading at just under $2,500 per ounce, it’s absolutely worth going for. After all, the only cure for high prices is high prices. Of course, Peter Schiff at [SchiffGold]( ate this up with a spoon: From governmental entrepreneurship to the pricing effects of conservation, this recent innovation highlights all areas of this intriguing and multivariable world. While the conditions and incentives that drive human action are always changing, the role of gold in civic and private life is ever-present. You can’t argue with that. Wrap Up Gargantuan mistakes like the Brown Bottom have enormous consequences, sometimes decades into the future. The Royal Mint dumpster diving for gold to make jewelry isn’t one of them. But 395 tons of gold at $2,500 per ounce? That would be worth nearly $35 billion or GBP 27.4 billion. Wow. Funnily enough, Gordon Brown may be the only politician I know who’s actually been ostracized in some way. No one buys his books, pays to listen to his speeches, or cares about his opinions. And it’s not just over the Brown Bottom, but a litany of mistakes he made as Chancellor and later as Prime Minister. It’s a shame Tony Blair isn’t ostracized the same way for even worse mistakes. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Ukraine’s Lost Cause: It’s Over, but For the Fighting and Dying BYRON KING “People should know when they are conquered,” says Quintus to Maximus. “Would you, Quintus? Would I?” replies the general. Screen shot from movie Gladiator. This scene comes near the beginning of the movie Gladiator ([here]( but please read this article first). Hordes of German tribesmen pour out of the forest to fight against phalanxes of Roman legionaries, backed up by immense, flame-tossing battle engines. Observing the setup, senior commander Quintus is perplexed. He can’t believe that the barbaric opponents foolishly wish to fight against mighty Rome. And he voices his opinion to the boss. General Maximus – played by Russell Crowe – is philosophic because, of course, he’s seasoned and wise, which makes him the star of the film. And Maximus understands that deep within human nature, people fight even when they know it’s for a lost cause. If you’ve seen the movie, you know how it all ends: victory for Rome, the side with more troops, better weapons and endless logistics. Because war is about combat power, and combat power is about people, systems and logistics. Although yes, some people don’t know when they are conquered, or that there comes a point when it’s all over but the fighting and dying. Ukraine’s Desperate Summer Over the past couple of days, I thought of this scene from Gladiator as I followed news accounts of a Ukrainian incursion into Russia proper, in the Kursk region. Map of Kursk region, courtesy of BBC. According to the BBC, “Reports suggest that Ukrainian troops are operating more than 10km (six miles) inside Russian territory – the deepest cross-border advance by Kyiv since Moscow launched its full-scale invasion in February 2022.” As the BBC map shows, over the past thirty months the main conflict zones between Russia and Ukraine have been in the southeast, shaded in pink. (Allowing, of course, for initial Russian moves into Ukraine from the north and northeast in February-March 2022; and the subsequent Russian withdrawal in April-May of that year, pursuant to a sabotaged deal to bring fighting to an end.) But last week, Ukrainian forces apparently caught the Russians by surprise and launched an attack to the northeast, towards the town of Sudzha, on the road to Kursk. Previously, Ukraine had not sent large-scale forces across the border into Russia proper. Right now, details are sparse and it’s best to recall an old maxim of warfare that “first reports from the front lines are usually wrong.” Still, news accounts indicate that Ukraine sent in a brigade-sized force, perhaps more; over 1,000 troops, with several dozen tanks and armored vehicles such as U.S.-supplied Strykers. Ukraine uses U.S.-supplied Stryker armored vehicles. Let’s get real, though: whether it’s 1,000 troops, or 2,000 or 4,000, and whether it’s two dozen tanks, etc. or three or five dozen, that’s not enough to invade Russia. (Ask Napoleon.) Per other accounts, it appears that Ukrainian forces crossed the border into Russia and followed the road grid. They drove straight up the main highway until they met resistance from border troops, and thus had to stop and fight. And this was how far? Six miles, per BBC, or perhaps more but not much more. Again, it’s not enough to invade Russia. Meanwhile, what’s the logistical plan? How will Ukraine keep its thousand (or whatever) troops and couple dozen vehicles supplied with fuel, ammunition, food, other supplies? Is the idea perhaps to stop at roadside Lukoil convenience stations and gas up? And considering that this is a combat action, what of medical evacuation of wounded? Yeah, right; good luck. Frankly, it’s difficult to see any military logic to this Ukrainian incursion, other than to grab headlines for a few days with a tactical PR stunt. But even that hasn’t worked, considering that European and much global media are focused on the Paris Olympics, while U.S. media are consumed with presidential politics. Ukraine? Huh? What? At higher levels of military thought, what’s the operational method here? That is, what is Ukraine’s goal with this assault, other than to send troops on a suicide mission, kill some Russians, and lose a bunch of irreplaceable equipment? I’ve seen media speculation that Ukraine intended its forces to seize a Russian nuclear power plant near Kursk; but from the map it’s a long reach, about 75 miles away. I’ve seen other speculation that Ukraine’s move might force Russia to shift troops away from other areas of the current front lines in the southeast. Well, no because Russia has nearly half a million combat troops – yes, an entire other army – in reserve positions scattered across the western part of the country, not currently engaged with Ukraine along the lines of contact. And as for strategic effect? Well, not to put too fine a point on things, but this Ukrainian attack is in the order of magnitude of zero. It changes nothing and looks kind of foolish in the process. At strategic levels, the outcome of this Russia-Ukraine conflict is already decided. Russia has far more people than Ukraine and can raise a much larger army. Russia has more and better military systems; tanks, artillery, etc. And Russia’s logistics effort is right next door, based on internal lines of communication, well-developed road and rail corridors, and well-practiced military hierarchies that date back to the Crimean War of the 1850s. Indeed, as previously noted, for Ukraine the war is over except for all the fighting and dying. Although it’s fair to ask, if the war is “over,” then why isn’t it yet finished? How do things conclude? Well, all in due time. [Man Who Predicted Biden's Drop Out In October Issues Shocking New Election Prediction]( After calling Biden's withdraw, former White House advisor Jim Rickards issues an even more shpcking election warning... [Watch This Video To Learn More]( Russia’s “Continental” Way of War With over a thousand years of history behind them, Russians definitely know a few things about fighting wars on their own territory. (Recall Vladimir Putin’s long explanation of Russian history to Tucker Carlson during that famous interview last spring.) Indeed, Russians have a distinct mindset towards warfare, certainly versus the U.S. approach. In general, the U.S. way of doing war is what’s called “expeditionary.” That is, pack up the Army, load it onto the Navy (or more recently, onto Air Force transport), and send it far away to fight, all with a very long and expensive logistics train. Think of the Spanish-American War, World War I, World War II, Korea, Vietnam, Cold War in Europe, and serial wars in the Middle East since the 1990s. The fronts and the fighting were always somewhere else, not here at home. But Russia is different. Per geography and history, Russia approaches warfare in what’s called a “continental” sense. That is, historically, war has always come to Russia, specifically via people from the west who marched east: from Sweden in the 1700s, Napoleon and France/Western Europe in the 1800s, Germany in the 1900s. Deep in their collective national memory, Russians understand that they must remain vigilant to outside threats, certainly from the west. And as historical cycles unfold, Russians constantly prepare to fight on their home turf. For example, in March 2014 Russia justified its seizure of Crimea because: a) Crimea has been part of Russia since 1783, via a treaty with the Ottoman Empire; and b) Ukraine was setting up a NATO base in the old Russian port of Sevastopol. In other words, Russia wanted back its historical lands, and the trigger point was a clear military move by NATO. Closer in time, Russia’s invasion of Ukraine in February 2022 was not based on some sort of ethnic dislike of that country or its people, a belief that now appears to have changed by 180 degrees. Instead, Russia was alarmed that Ukraine had clearly become a de facto arm of NATO, which is an unallowable military threat to Moscow. Think like a Russian, and this is not that hard to figure out. Looking back over the past thirty months, anyone who paid attention has had a daily, close-up look at the current Russian “way of war.” And no, it’s not flashy or grand, but instead careful and methodical. Characteristically, Russia’s military doctrine focuses on destroying the enemy via massive firepower, artillery, armor and aviation. And this combat capability is based, in turn, on a militarily productive Russian economy rooted in minerals, mines, energy, basic industry, heavy machine building; all that, plus a superb, national-scale education system that turns out large numbers of people suitable to the cause. (Long story.) In other words, Russian military power is the first derivative of Russia’s national energy and industrial economy. A Purposeful, Methodical Grind Of course, Russia has taken casualties in its Ukraine operation, and cemeteries across Russia are filled with recently dug graves. But overall, from the General Staff in Moscow to the front-line rifle squad in the field, everything Russia does is militarily purposeful. One sees no PR stunts from the Russians. In recent months, the statistics are that Russia has methodically eliminated about 1,800 to 2,200 Ukrainian troops per day (KIA) with about the same number of Ukrainian wounded. Over the past thirty months, Ukrainian dead are easily in the half million range, and likely more. Also, every day Russia destroys about one to two dozen Ukrainian tanks and other armored systems, while Ukraine’s air force is all but grounded because Russian air defense and aerospace forces control the sky. All this, while Russian electronic warfare dominates the spectrum. Add in the fact that, with modern surveillance and communication systems, Russia can identify elements of interest and hit them with a targeting loop that is eye-wateringly fast. If they see you, you die; think in terms of five, ten, fifteen minutes. Over and above her legendary artillery fire for effect, Russian cruise missiles and hypersonic systems are such that, in terms of range and speed, Ukraine has no operational depth. That is, nothing in Ukraine is safe behind the front lines, no matter the distance, all the way west to the Polish border; and the only reason that Russia has not (yet) struck “Ukrainian” targets in Poland is Russia’s political restraint. Along these lines, and to return to Ukraine’s recent incursion into the Kursk area (and allowing for the amount of hype that comes out) I’ve seen reports that, just the other day, Russia dropped two ballistic missiles onto the main command post of the Ukraine incursion. This attack killed the four top Ukrainian commanding generals, and about 75 others. Or so go the rumors. Meanwhile, and elsewhere along the front lines, this war has become, for Ukraine, a Battle of the Somme, except this time up against drones and much else. I’ve seen video and read accounts of Russian drone swarms at the scale of hundreds and even thousands at a time, whizzing across the sky like a flock of passenger pigeons of old. On the U.S. end and based on public comments by senior military and civilian officials, analysts are shocked at what's happening on the front lines. Post Cold War, and now at the end of a 35-year holiday from thinking in terms of history and strategy, the U.S. military has little-to-no workable doctrine with which to confront this kind of “peer” adversary, namely Russia. Per numerous public accounts, the U.S. military – all services, plus senior echelons in the Dept. of Defense – have all but torn up the doctrine and warfighting books from the past three decades of war in the Middle East. The prospect of fighting Russia now is a far stretch from the good old days of beating the tar out of third-rate military forces like those of former Iraq. That entire era, bookmarked by one after another of distant, expensive Middle East wars, was based on ephemeral moments in time, all of which have passed us by. In fact, across the Middle East today, where large contingents of U.S. forces remain stationed, U.S. military and political players routinely perform a careful dance not to engage “too much” against Iran, lest the Iranians shoot back. Look at the current political-military tap-dance happening between Iran and Israel. Meanwhile, don’t overlook recent engagements with the Houthis in Yemen, who proved that they could block the southern entrance of the Red Sea when and how they choose to do so. According to U.S. officials, the entire – still ongoing – episode was the largest sustained combat effort at sea for the Navy since WWII. And in terms of just missiles and bombs in the ready-locker, U.S. forces are playing with a weak hand. Hey, Pay Attention Okay, let’s wrap it up. Final questions to ponder: First, what’s the way ahead for America, in a world where the old ways of waging war have changed so dramatically? Well, it begins with paying attention to and seeing the reality behind the political lies and smokescreens. Our American political class comes across as mostly clueless, if not staggeringly ignorant. The welfare-state defense budget is its own story, with lots of money going to things that have not won wars in a long time. At the cultural level, a cynic might say that U.S. schools and universities do a terrible job of teaching military history; and this is for a reason, which is to keep almost everyone unschooled and unable to understand even the basics of what they can see on a video screen. Then a final query, which is what to make of Ukraine and its recent invasion towards Kursk? At every level, it’s a doomed mission. The soldiers will be killed or captured, and the equipment will wind up in Russian war museums. So for all the loss, nothing will change. The war is over, except that it isn’t. Finally, if the name Kursk seems familiar, that’s because 81 years ago, in July-August 1943, it was the scene of one of the largest battles in history, between German and Soviet forces during World War II. About 800,000 German troops went up against over 1.5 million soldiers of the Red Army in a duel of artillery, armor and airpower. In the end the Germans were overwhelmed, while each side incurred ungodly losses in the range of half a million each. By the end of that fight at Kursk, it was crystal clear how World War II was going to evolve towards its denouement. That continental-style war, of Germany against the Soviet Union, was all over but for the fighting and dying. And as the man once said, “People should know when they are conquered.” To which the other man said, “Would you know? Would I?” Thank you for subscribing and reading. Byron W. King Contributing Editor, Rude Awakening ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. 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