But every now and then, they are forced to restate the obvious in an effort to maintain credibility. This is why BlackRock took the unprecedented move of recommending very “unwoke” gold to its leading investors earlier this year. Now, State Street and Vanguard have done the same. With geopolitical turmoil, the central banks pushing for digital currencies, and an upcoming presidential election in the United States, it behooves them to talk publicly about the “safe haven” nature of gold because to do otherwise is to pretend to ignore the obvious.

According to George Milling-Stanley, chief gold strategist at State Street Global Advisors, the gold market is expected to remain well supported at elevated levels, despite the Federal Reserve’s plan to maintain restrictive interest rates. In an interview with Kitco News, Milling-Stanley stated that with the Federal Reserve currently on hold, gold prices will be influenced by safe-haven demand due to the increasing geopolitical uncertainty worldwide.

The recent turmoil in the Middle East, caused by the conflict between Israel and Hamas, resulted in a 9% increase in gold prices from their lowest point in seven months. Milling-Stanley emphasized that even as specific risk events fade, there is still enough uncertainty globally to keep the marketplace active until 2024.

Milling-Stanley pointed out the upcoming U.S. Presidential election as a potential catalyst for heightened geopolitical tension, leading to widespread anxiety that is unlikely to dissipate soon. As a result, he sees little downside for gold prices in the near future.

Additionally, Milling-Stanley highlighted gold’s appeal as a safe-haven asset during periods of economic uncertainty. He explained that the Federal Reserve’s goal to reduce inflation and cool down the U.S. economy necessitates maintaining higher interest rates, which in turn puts pressure on equity markets. The S&P 500 has experienced three consecutive months of decline in response to the Federal Reserve’s “higher-for-longer” monetary policy stance.

Milling-Stanley believes that gold can withstand higher bond yields, noting that the 10-year note remains close to 5%. While higher bond yields may be considered attractive for some investors seeking safe-haven assets, Milling-Stanley cautioned against an increasing correlation between bonds and stocks in the past two years, which reduces portfolio diversity. As a result, gold has assumed the role previously played by the bond market in providing protection against potential weakness in the equity market.

Milling-Stanley emphasized the importance of including gold, stocks, and bonds in a balanced portfolio. He mentioned that although many investors have yet to allocate a significant portion to gold, there is a growing recognition of its importance, leading to a shift in portfolio allocations.

Vanguard’s $70 billion flagship emerging markets index fund includes 60 companies on the Chinese military company sanction list by the Office of Foreign Assets Control (OFAC) under the U.S. Department of Treasury, according to the report released by the Coalition for a Prosperous America (CPA) on Oct. 13. CPA is an advocacy organization representing exclusively manufacturers that have productions in the United States.

In addition, the flagship and other Vanguard funds also hold shares of eight Chinese companies sanctioned over human rights abuses in China’s Xinjiang region, where the persecution of Uyghurs has been identified by the U.S. State Department as “genocide.”

The report didn’t provide a tally of all Vanguard investments in Chinese military companies but listed a total of $100 million in three such groups.

While noting that Vanguard’s fund holdings are legal, CPA urged Congress to take urgent action on the “long-festering, structural problem” that “a weak public policy response by the U.S. government has allowed greed within the asset management industry to supersede urgent American investor protection, national security, and human rights concerns.”

“Congress must turn off the tap of American capital flowing to China and stop private and public market investments into blacklisted CCP-connected companies,” Rep. Mike Gallagher (R-Wis.), chair of the House Select Committee on the Chinese Communist Party (CCP), told The Epoch Times in an emailed statement.

“Americans do not want firms like Vanguard and BlackRock to invest their retirement savings in companies building the Chinese Communist Party’s military and implementing its ongoing genocide against the Uyghur people. If we accept the status quo, we are willfully fueling our own destruction,” he added.

Congressional scrutiny over Wall Street’s role in financing Chinese military companies has been on the rise.

Three months ago, Mr. Gallagher’s committee launched an investigation on BlackRock, another leading asset manager, and global index provider MSCI over their role in channeling money to Chinese companies involved in building weapons for the Chinese military. The committee estimated $429 million of such investment against American interests by BlackRock.

In a letter dated July 31 to BlackRock and MSCI, Mr. Gallagher and committee ranking member Rep. Raja Krishnamoorthi (D-Ill.) wrote that, through the companies’ funds, Americans were “unwittingly funding” Chinese companies that fuel the CCP’s military and the two companies were “exacerbating an already significant national security threat and undermining American values.”

Two months later, BlackRock closed its China-focused offshore fund. All shareholders would have to redeem any outstanding shares by Nov. 7 before the fund’s liquidation. BlackRock previously told The Epoch Times that its products “comply with all applicable U.S. government laws” and it’s one of 16 asset managers offering U.S. index funds with investment in Chinese companies. The company didn’t directly comment on the closure of the China fund.

In an emailed response, a Vanguard spokesperson told The Epoch Times, “Vanguard maintains the highest levels of compliance with all applicable laws and regulations, including sanctions law. We welcome additional clarity from policymakers who are in a position to determine sanctions through the formal OFAC process.”

“As one of many asset managers offering investors a range of funds to invest internationally, our clients’ investments in China are primarily through U.S.-based passive index products that provide diversified exposure to many developed and emerging economies,” the spokesperson added.

In August, President Joe Biden issued an executive order (EO), prohibiting U.S. outbound investments to China in industries such as semiconductors and quantum computing. The Treasury Department has published preliminary rules, which listed index funds as excepted transactions under the EO. The public commentary period closed on Sept. 28.

During the last two administrations, two of the world’s biggest investment managers, Blackrock and Vanguard, were allowed to purchase huge stakes in local utilities, which is a problem because in most cases around the country, there is only one utility company that serves a wide swath of the population.

The Epoch Times reported:

In April, the Federal Energy Regulatory Commission (FERC) approved a request from BlackRock to increase its ownership up to 20 percent of a public utility’s voting shares without being deemed an “affiliate” and incurring the regulatory scrutiny and disclosures that come with that. To gain FERC approval, BlackRock and Vanguard promised they’d be “passive” investors and not use their share ownership to influence management.

Oh, well, good. They ‘promised.’ But why else buy into these utilities?

Due to the monopolistic nature of utility companies and because they hold so much importance over people’s lives, any investment of more than $10 million has to be approved by FERC. However, as The Epoch Times noted further, “BlackRock and Vanguard received blanket approval in 2019 to surpass this limit for three years, and BlackRock was just given blanket approval for another three years.”

So, that will make six total years that the federal agency set up to protect against outsized investments in utility companies has allowed outsized investments in utility companies, completely negating the agency’s purpose. And why? Money, of course — it’s always about money.

Nevertheless, the investments have begun to set off alarm bells in the offices of both conservative and liberal state attorneys general. Last month, 13 AGs petitioned FERC — obviously unsuccessfully — to deny the investment firms’ request for the three-year extension, claiming that their citizens would be harmed if the utility companies are then compelled to stop utilizing fossil fuels in lieu of wind and solar.

“Vanguard is not entitled to a blanket authorization to acquire substantial equity and voting power in utility companies,” the AGs argued.

“Vanguard’s own public commitments and other statements have at the very least created the appearance that Vanguard has breached its promises to the commission by engaging in environmental activism and using its financial influence to manipulate the activities of the utility companies in its portfolio,” the petition said. “A hearing in this matter is warranted to determine the extent to which Vanguard has violated the 2019 authorization and whether granting Vanguard a blanket authorization is contrary to the public interest.”

Some FERC officials echoed the concern. FERC Commissioner Mark Christie stated: “The claim that huge asset managers such as BlackRock, State Street, and Vanguard are merely passive investors in publicly held corporations, investing purely for the benefit of their beneficiaries—many of whom are retirees receiving pensions—is no longer credible.

“BlackRock, in particular, has been openly aggressive in using its massive financial power to influence corporate policy in areas far attenuated from the legitimate money-management goals of protecting the incomes and investment interests of its beneficiaries,” he added.

Charlie Munger, the vice chairman of Berkshire Hathaway—which is chaired by Warren Buffett—agreed, stating in February that “we have a new bunch of emperors, and they’re the people who vote the shares in the index funds. I think the world of [BlackRock CEO] Larry Fink, but I’m not sure I want him to be my emperor.”

Republican senators agree.

“A retail investor who buys an index fund does not own the stock in the fund,” said a December report by the Senate Banking Committee’s GOP members. “Those stocks instead are owned by the fund, which means the fund’s manager may vote those shares. Even though they buy that voting power with other people’s money, that voting power gives asset managers like the Big Three enormous influence.”

“What these activists have figured out is that any radical policy that they can’t get enacted through government can be advanced through corporate America by hijacking trillions of dollars in voting rights from everyday Americans’ retirement accounts,” noted Sen. Bill Hagerty (R-Tenn.).

The economy of a first-world power cannot sustain itself on wind and solar power. Just ask Germany.

Sources include:

• TheEpochTimes.com
• Banking.Senate.gov
• NATURAL NEWS