Rough Textures & Tough Harmonies

Rough Textures & Tough HarmoniesPerched high in the Himalayan range Tibet, Nepal and Bhutan are truly at the roof of the world. A persistent upheaval caused by the Indian subcontinent slowly forcing deep earth mineralization up and over the Asian continental plate has blessed these countries with copious industrial and precious metals as well as important factors for high quality cement. Potentially, the richest of the trio is Tibet. This is likely a primary reason for its annexation by China in 1951.

Annexation formalized what was well underway; much of Tibet’s crop-rich lowland had previously been gradually erased from the historical map of Tibetan territory and integrated into bordering Chinese provinces. The remaining Tibetan high country, which is full of valuable natural resources, was taken during the much more overt annexation of 1951. For 2,500 years regional monasteries and various temples have been adorned with the bountiful gold, silver, and gemstones found here. Only now is industrial resource extraction beginning in earnest. Or so it seems.

Gyantse Monastery & Former Fortress

Gyantse Monastery & Former Fortress

Highly Mineralized Creek Water

Highly Mineralized Creek Water

Mt. Everest at the Roof of the World

Mt. Everest at the Roof of the World

This area along with historical Dzungaria (modern day Kazakhstan, Kyrgyzstan and the Chinese province of Xinjiang) is a region that the Mongol Empire originally brought into large-scale resource production. The Khan developed this region by bringing in countless members of the newly ‘discovered’ mining profession from the conquered territories of Persia, Russia and Europe during 1200 AD to 1300 AD. The common knowledge of 800 years ago regarding this region’s riches is being rediscovered now. This broad region called Central Asia may just be the next significant wealth-generating epicenter of the world.

This historically interconnected region is now becoming a part of the even larger Shanghai Cooperation Organization (SCO), which is comprised of Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Russia and China. Some in the intelligence community consider the SCO to be a worthy challenger to the North Atlantic Treaty Organization (NATO). They should. In addition to the members listed above, the SCO also has the distinction of memoranda relationships with India, Iran, Pakistan, Mongolia and most recently as well as importantly the Association of Southeast Asian Nations (ASEAN). Readers may recall that the ASEAN is a free trade association that brings together as much as 40% of the world’s GDP in one economic bloc. We see this alignment of the ASEAN and the SCO as evidence of an attempt to protectively isolate its participants from the current economic and social ills of the West.

Shanghai Cooperation Organization

Shanghai Cooperation Organization

Due to the newness of the relationship, the nations of ASEAN are not depicted as participating with the SCO.

Another interesting attribute of the SCO is that its members account for substantial precious metals and oil production as well as about half of the world’s population. Many of these nations have been diversifying substantial portions of their currency reserves into physical gold. Most importantly, the SCO has initiated dozens of large-scale projects related to transportation, energy and telecommunications.  It has also held regular meetings to address regional issues of security, foreign affairs, economic development, culture, and banking. No multinational organization with such far ranging and comprehensive projects and plans has ever existed on this scale.

The SCO is a supra organization that has assimilated the entire region into a block with similar wealth and development goals. The overt hostility of the 1951 assimilation of Tibet has been replaced by more subtle strategies for bringing this region’s abundant natural resources into a single unified political block.

While many in the West think of this region only in the context of the ‘free Tibet’ movement or the receding Himalayan glaciers, it is important to be aware of the broader geo-political picture. Tibet is but a pawn in a gigantic orchestration of tough harmonies – harmonies made up of rough textures in a new reality. The SCO policies, which greatly influence this rising economically critical region, should be the focus of attention for investors throughout the world.  The SCO is seeking to decouple its member countries from the excessive indulgences that have driven Western economies during the past three decades. If it is successful in this effort, it could lead the way to the eventual stabilization of more of the world’s economy and thus add value to some of the remaining attractive investment themes on the planet. This is a difficult idea for Americans as well as investors from the world over who have grown accustomed to the familiar names and methods of the West. However, this theme does represent significant investment opportunity and economic hope that is based in reality.