Looming Independence Referendum in Kurdistan Reminds Why You Need Gold
There are too many reasons among the geopolitical fires raging in the world today to have grave concerns for the future of your investment and retirement portfolios. One of these is an upcoming independence movement referendum slated to be held in September in Iraq. Specifically, it is the Iraqi autonomous region of Kurdistan that is attempting to break with Baghdad.
This is a serious concern for the region and the world as the national government is violently opposed to this independence movement and any talk about independence referendums. Iraq has threatened to stop secession by any means necessary, including violence if required.
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Kuridstan Referendum Threatens Iraq's Oil Revenues and Global Oil Prices
The most serious challenge to global financial markets (from upcoming independence referendums) proves to be the Kurdistan referendum regarding their future in Iraq. The reason this is so critically important is because Kurdistan encompasses the oil-rich region of Kirkuk in the north of the nation.
In fact, the Kurdish military has completely controlled this crucial province and other disputed northern Iraqi territories since the summer of 2014 when they became cutoff from the rest of the country by the rise of the Islamic State.
To their credit, the Kurds liberated the region and ensured its protection from ISIS since then. Yet the Kurds have also long considered this territory to be an integral part of their anticipated homeland state which they have been seeking to establish in their millennial home of the Kurdish people.
Since at least the end of World War I and the collapse of the ruling Ottoman Empire, the Kurds have been desperate to reclaim a sovereign land for themselves. Their hopes of achieving such a step took a giant leap forward in the wake of the American-led overthrow of brutal dictator Saddam Hussein's government back in 2003.
Now that ISIS is all but vanquished in Iraq, the Kurdish forces have sharpened their demands for independence and for keeping the oil land spoils of Kirkuk. Next week's September 25th referendum is virulently opposed by the government in Baghdad. In fact, Prime Minister Haider al-Abadi has recently called this vote both “unconstitutional and illegitimate.” The threats have only increased since then.
Last Tuesday, the central government gave the prime minister full authority to “take all measures” in order to preserve the fraying unity of the post-Islamic State country. Yet the Iraqi Kurdish leader Massoud Barzani is having none of it. Director for Middle East and North Africa Ayham Kamel of the Eurasia Group consulting firm warned:
“In Kirkuk especially, Baghdad will not accept a scenario in which all of the territories are annexed.”
Fully 20 percent of the entire Iraqi population (around six million Kurds) live in Iraq. As the overwhelming majority of them are located in the landlocked northern areas, it makes their impassioned appeals for their own state all the more potent. The five million Kurds allowed to vote are united as one in their longing for their own sovereign nation. There can be little doubt on the ultimate outcome of this referendum.
This is their first realistic hope that they may finally achieve their ultimate aims since the British and other colonial European powers took out pencils and drew literal national borders on the maps of the Middle East. For some inexplicable reasons, they left the Kurds divided into the competing nations of Iraq, Turkey, Iran, and northeastern Syria in the process.
Kurdish European and American Allies Against Dividing Iraq
Unfortunately for the freedom-loving Kurds, their allies in America and Western Europe are not in favor of their long-stymied dreams for their own independent homeland. Germany, Britain, France, and the U.S. all are vocally against the referendum as well.
The great powers argue that such a vote will only divide the allied forces in their ongoing efforts against uprooting the remainder of ISIS, escalating already-exacerbated tensions with the national government. Israel is a lone supporter, as it much prefers the Kurds as neighbors to Iraq and the Arab countries.
More importantly on the ground, the neighboring nations of Iran, Turkey, and Syria are all violently against any referendum that may encourage their own native Kurdish populations to demand similar referendums for independence.
Research Fellow Michael Stephens from the Royal United Services Institute think tank warns about the likely outcome of such a scenario as the regional neighboring powers becoming involved to stop the Kurds and quash their dreams:
“I think the instability of this dynamic is particularly worrying, and regional interference could serve to raise tensions and potentially ignite conflict, rather than dampen down the chances.”
Turkey's opinion on the matter is crucial to the Kurds, since their pipelines are the only significant means of exporting Kurdish territorial oil. The choice to hold such a referendum represents a potential land mine in the ongoing dispute between Kurdistan's regional capital Erbil and Baghdad on Kurdish oil revenue sharing and oil exports.
It matters enormously for world financial markets, you, and your portfolio because Iraq proves to be the second biggest OPEC oil producer, pumping out a sobering 4.32 million barrels in oil every day, per the Iraqi Oil Minister Jabar Al-Luaibi. The Kurdish region in the north amounts to about ten percent of this by itself.
Yet Principal Analyst for the Middle East and Northern Africa Torbjorn Soltvedt of Verisk Maplecroft the risk consultancy group opined:
“Independent Kurdish oil exports are still a long way off covering what is a very large and expensive public sector. In the current oil price environment, the economic foundations for independence look shaky. It would be wrong to assume, however, that the issue of independence will be governed by economics alone.”
Yet the Kurds have been cutting their own oil development and production deals with foreign multinational oil companies for years. Chevron the American oil giant has been operating in this Kurdistan area since signing an agreement on oil with its partner the semi-autonomous government back in year 2012.
Baghdad was also vehemently opposed to this move, arguing that oil companies working in the north of the nation either had to obtain the consent of the central government in the capital or face black listing from the country's oil industry.
Chevron is wisely staying as far out of the independence debate as it possibly can, with their spokesman's official statement that it:
“seeks to work constructively with all stakeholders in any country in which it operates (and) with regards to any referendum, it is a decision to be made by those directly involved.”
The Kurdish Referendum Warns You to Stock Your IRA With Gold
This referendum is going ahead next week. Nothing short of an all-out military invasion of Kurdistan will stop it now. The results are already a foregone conclusion too. The question is how likely is it that the Kurds will put their proverbial “money where their mouth is” and unilaterally declare their independence following the referendum.
You can not afford to take unnecessary risks with your retirement portfolio. This is why you must obtain gold to hedge today's many geopolitical nightmare scenarios plaguing the world. Gold outperforms traditional asset classes during market crisis periods, which is why it makes sense in an IRA. Look into the various Gold IRA storage options now while you still can.