AuthorTopic: Gold & Silver News  (Read 394242 times)

Online Eddie

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Re: Gold & Silver News
« Reply #2460 on: September 17, 2018, 08:23:27 AM »
These glitches are a pain in the ass. I was pretty sure that's what was going on. I thought those were old posts.

I take GO at his word that he's done very, very well. I don't know his net worth, but I am assured that it's substantial, and that whatever he claims about his financial success is true and correct.

My impression is that in his working life he was a financial services professional, most likely someone who labored at his own trading desk in some big house. He certainly understands stocks and bonds very well, and gold, although I don't always agree with him on every issue. 

My main disagreements with GO (when it comes to savings and investing) have to do with the best way to hedge against the never-ending decline of the fiat currency. An awful lot of experts agree that gold is best, but I am a contrarian on that, to some degree.

I respect his opinion. He does NOT respect mine, but that's okay. I show my work, so anybody can see how my approach works, if they want to do the math.
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Offline Surly1

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Re: Gold & Silver News
« Reply #2461 on: September 17, 2018, 09:08:01 AM »
These glitches are a pain in the ass. I was pretty sure that's what was going on. I thought those were old posts.

I take GO at his word that he's done very, very well. I don't know his net worth, but I am assured that it's substantial, and that whatever he claims about his financial success is true and correct.

My impression is that in his working life he was a financial services professional, most likely someone who labored at his own trading desk in some big house. He certainly understands stocks and bonds very well, and gold, although I don't always agree with him on every issue. 

My main disagreements with GO (when it comes to savings and investing) have to do with the best way to hedge against the never-ending decline of the fiat currency. An awful lot of experts agree that gold is best, but I am a contrarian on that, to some degree.

I respect his opinion. He does NOT respect mine, but that's okay. I show my work, so anybody can see how my approach works, if they want to do the math.

Same thought about the glitches.

I saw them in the wee small hours, and thought something had burped in the belly of the beast, There was one from Palloy and he hasn't been here since end of July. Easy to check.
There were three in a row from GO replying to me, which is odd.

Spontaneous messages from Alpha Centauri?

Messages from Karpatok trying to bust out of hell?

Some rough beast slouching toward Bethlehem to be born?

Ad for GO, I also take GO at his word that he's done very well. His net worth is nobody's business but his own. He certainly is all in for gold, and has made that abundantly clear over the years. He also talks about financial issues from a defined perspective that certainly seems informed, whether i understand it or not. For my part I appreciate his many contributions in areas other than politics: the weekend photo essays, the little forays into art and numismatics and rare coins. He's a person of some refinement with a cranky streak. I can identify.

We'll never agree on politics, and we don't have to. I think that RE has it wrong comparing him to Mking. He adds much more to the conversation than trollery.
"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound

Online Eddie

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Re: Gold & Silver News
« Reply #2462 on: September 17, 2018, 09:47:23 AM »
My good fortune in life was to find a good mentor in Dan A. His recent stuff is amazing, although I'm sure I would understand it better if I got it straight from the horses mouth. His articles are dense with information. He gives the information out for free to those willing to spend time woodshedding. So different than the ZH butt pirates like Casey, Porter Stansberry and the rest.

It is true that I looked for someone LIKE him for many years, and recognized his genius when I ran across it. He is speaking again in lovely downtown Schaumberg (this is a joke for anyone who's been there) next month.  If I had real money, I'd book us both a ticket, and force my son to go with us, kicking and screaming. He already turned down one attempt for me to pay for the two best days of education he'd be likely to get in his lifetime. You can't really teach your kids much. They have to figure out stuff the hard way...(sigh).


Downtown Schaumberg
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Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2463 on: September 21, 2018, 02:47:23 AM »
Russian Central Bank Adds 1,000,000 Ounces Of Gold To Its Stack In August

          Russia added a record 224 tons of gold to reserves in 2017.

Russia has added over 161 tons of gold in 2018, through August.

At current pace the Central Bank of Russia will add 240 tons in 2018, the most ever.

Since June 2015, the Central Bank of Russia has added nearly 700 tons of gold to reserves.


                                     <a href="http://www.youtube.com/v/KWOl6b9tpnw" target="_blank" class="new_win">http://www.youtube.com/v/KWOl6b9tpnw</a>


                                       

Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2464 on: October 10, 2018, 04:22:38 AM »
Dear Readers, This recent correlation between Gold and Yuan has become quite noticeable to gold bugs. This is but one view of what it might be telling us.                                       Regards, GO


         


https://www.scmp.com/week-asia/opinion/article/2167132/china-has-golden-opportunity-become-asias-monetary-power  :icon_study: :icon_study: :icon_study:


                                 
 
           

Online Eddie

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Re: Gold & Silver News
« Reply #2465 on: October 10, 2018, 05:27:26 AM »
Dear Readers, This recent correlation between Gold and Yuan has become quite noticeable to gold bugs. This is but one view of what it might be telling us.                                       Regards, GO


         


https://www.scmp.com/week-asia/opinion/article/2167132/china-has-golden-opportunity-become-asias-monetary-power  :icon_study: :icon_study: :icon_study:


                                 
 
         

From what I can see, there are at least two or three take-aways here.

One is that the IMF and China are colluding to control the  gold price. They are pegging gold not to the yuan directly, but to the
SDR. That means that short term, gold is range bound. Long term it means that the IMF is directly attacking USD dominance in an effort to take away the reserve currency status. Another sign Rickards has it more or less right.

In the past one role of the Comex was to make the gold price go wherever the banksters wanted it to go. Now they'll try to do the same thing with the Shanghai gold exchange.

So the thing to watch for is some kind of new extreme dollar weakness, which would signal a real seismic shift. I doubt that will come anytime real soon, but I don't know. It could, I guess.

The thing is that I don't see the interests of the banksters ever being served by a return to to any kind of gold-regulated money. The whole game is still about controlling gold price, not controlling the yuan, which is just a new vehicle for doing the same thing they were doing before. In any case, it ain't good for the dollar long term. I think we can see that much.
What makes the desert beautiful is that somewhere it hides a well.

Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2466 on: October 10, 2018, 06:49:15 AM »
Dear Readers, This recent correlation between Gold and Yuan has become quite noticeable to gold bugs. This is but one view of what it might be telling us.                                       Regards, GO


         
         

From what I can see, there are at least two or three take-aways here.

One is that the IMF and China are colluding to control the  gold price. They are pegging gold not to the yuan directly, but to the
SDR. That means that short term, gold is range bound. Long term it means that the IMF is directly attacking USD dominance in an effort to take away the reserve currency status. Another sign Rickards has it more or less right.

In the past one role of the Comex was to make the gold price go wherever the banksters wanted it to go. Now they'll try to do the same thing with the Shanghai gold exchange.

So the thing to watch for is some kind of new extreme dollar weakness, which would signal a real seismic shift. I doubt that will come anytime real soon, but I don't know. It could, I guess.

The thing is that I don't see the interests of the banksters ever being served by a return to to any kind of gold-regulated money. The whole game is still about controlling gold price, not controlling the yuan, which is just a new vehicle for doing the same thing they were doing before. In any case, it ain't good for the dollar long term. I think we can see that much.

While it is conjecture on everyone's part what China is planning, there are a few items in your reply which will not stand up to scrutiny.

China is being forced into the current posture by Trump's trade war, which has not been carefully thought out as to possible unintended consequences. This article points out  that the trade war with China was lacking an understanding of it's longer term consequences by the administration.

China is not beholding to Western Bankers, China is worried only about China and Asian Banks, many of whom are aware that Gold is money. India, China, and Russia are well aware of this fact.

The gold price has always thoughout history been attempted to be controlled, nothing new there. 

The future exchanges set up by the Chinese do NOT ALLOW for Naked short selling, the common practice for price suppression on the bankster controlled Comex.

The US, mistakenly in my view, decided to use the dollar as a weapon rather than a means of payment. China is not about to take that shit, they are not Iran. You seem to treat this problem as if it is strictly financial. It is not, these currencies are now weapons of war and China is preparing for a confrontation not an SDR game. The trade war and sanctions have changed that focus.

You are correct that the future of the dollar long term is bleak, but that is the future of all fiat currencies so it is not a factor.

Unlike the West, China has counseled it's citizens to buy and save gold for decades. Your view of the situation presented appears to me to be very western and especially US centric. The China Asian centric view of Gold is entirely different, as is the two cultures.

My take on the matter is merely that Trump, unintentionally, has hastened the return of the world to the only real money Gold and unfortunately MAGA is going to be a miserable experience for all US and Western citizens who do not posses adequate gold and silver bullion wealth.

The trade war, started by our president as a logical well intended correction of China's unfair trade practices with us, will be seen in retrospect as ill conceived.

Let me announce my prejudices in the matter as a deeply religious gold bug. It is also my strong belief we are on the cusp of world wide financial mayhem which will create a new Tower of Babel with the only two things anyone will understand being an oz of Gold and Silver. 

                                   

                                                  "Gold Will Win"


Online Eddie

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Re: Gold & Silver News
« Reply #2467 on: October 10, 2018, 07:43:04 AM »
China is not beholding to Western Bankers, China is worried only about China and Asian Banks, many of whom are aware that Gold is money. India, China, and Russia are well aware of this fact.

Then why is gold tracking the SDR? At this juncture the pattern is obvious. That is what I base my opinion on. Not thin air. Tell me what I'm missing.

I accept that Chinese and Indian bankers are favorably disposed toward gold. But they seem to be part of the world banking cabal, anyway, from what I see.



The part about the Shanghai exchange not allowing naked shorting is worth considering. That makes it harder to manipulate gold, for sure. This new scam is not something I pretend to have completely worked out.

I'm not a dollar bull. I just know that there are forces that still tend to push it higher at this moment in time. I always recommend holding some gold, just not to the exclusion of real investments. If gold is money, and I'd agree that it is, it behaves like money. Money is an exchange medium and a store of very portable wealth.

What makes the desert beautiful is that somewhere it hides a well.

Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2468 on: October 10, 2018, 08:27:38 AM »
China is not beholding to Western Bankers, China is worried only about China and Asian Banks, many of whom are aware that Gold is money. India, China, and Russia are well aware of this fact.

Then why is gold tracking the SDR? At this juncture the pattern is obvious. That is what I base my opinion on. Not thin air. Tell me what I'm missing.

I accept that Chinese and Indian bankers are favorably disposed toward gold. But they seem to be part of the world banking cabal, anyway, from what I see.



The part about the Shanghai exchange not allowing naked shorting is worth considering. That makes it harder to manipulate gold, for sure. This new scam is not something I pretend to have completely worked out.

I'm not a dollar bull. I just know that there are forces that still tend to push it higher at this moment in time. I always recommend holding some gold, just not to the exclusion of real investments. If gold is money, and I'd agree that it is, it behaves like money. Money is an exchange medium and a store of very portable wealth.

I do not know the answer to your question except to say it is tracking the Yuan closer.

Let me also point out that no one knows, gives the slightest shit, understands anything about the SDR except for an insignificant amount of academics who are mostly ass holes and bs artists with grandiose ideas.

Everyone on the other hand watches and knows what Gold, The US dollar, and Yuan are. SDR's are a concoction of banksters and academics that has no reality to the public, or more importantly the investing public.

Yes the Asian banks cooperate with their counterparts in the west when it is in their benefit.

President Trump, I argue, has ended that cooperative atmosphere. My feeling is you are taking the dollars new role as a weapon too lightly. We are fortunate China keeps a relatively cool head in these matters and moves slowly but deliberately. You will notice that their recent marriage partner with whom they have recently exchanged vows, the bear next door with the nuclear arsenal, has been moving with much greater haste away from the Dollar and towards Gold. Putin, like Trump, does not know how to play chess well. This is a boxing match to them.


                                   



                                   

 

Online Eddie

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Re: Gold & Silver News
« Reply #2469 on: October 10, 2018, 08:33:02 PM »
<a href="http://www.youtube.com/v/MtIDa4YNpjc&fs=1" target="_blank" class="new_win">http://www.youtube.com/v/MtIDa4YNpjc&fs=1</a>
What makes the desert beautiful is that somewhere it hides a well.

Online Eddie

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Re: Gold & Silver News
« Reply #2470 on: October 10, 2018, 08:33:59 PM »
<a href="http://www.youtube.com/v/MtIDa4YNpjc&fs=1" target="_blank" class="new_win">http://www.youtube.com/v/MtIDa4YNpjc&fs=1</a>

This is probably how the Chinese are doing what they're doing, and it explains a lot.
What makes the desert beautiful is that somewhere it hides a well.

Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2471 on: October 11, 2018, 05:49:45 AM »
Dear Readers, fellow Goldbugs, Libertarians, just a reminder of our principles, as well as why the Dim and corrupt government despise and ridicule us. Keep the Faith.                                          Regards, GO

           

https://acting-man.com/?p=53589  :icon_study: :icon_study: :icon_study: :icon_study: :icon_study:


                                     

Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2472 on: October 11, 2018, 05:54:44 AM »
The Sun is shining again. :icon_sunny: Gold is up over 20 dollars.

Postings by me will be infrequent until the markets quiet down.   GO

                             

Offline Golden Oxen

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Re: Gold & Silver News
« Reply #2473 on: October 11, 2018, 05:57:31 AM »
<a href="http://www.youtube.com/v/MtIDa4YNpjc&fs=1" target="_blank" class="new_win">http://www.youtube.com/v/MtIDa4YNpjc&fs=1</a>

This is what I meant about a Tower of Babel II forming in a previous posting on the matter. 

Online Eddie

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Re: Gold & Silver News
« Reply #2474 on: October 11, 2018, 06:17:39 AM »
I'm trying to absorb this and understand what the real effects will be on us dollar spenders. I think it's basically correct.

The global reset has already happened.

The thing is that regular Americans are not sitting on piles of cash. Here it's always about equity prices and real estate prices and oil prices.  The call to get out of dollars doesn't mean much to people who have no cash.

I have some cash denominated assets that I could turn into gold, if I really thought gold would blow out. So far, the effects of this new system are that gold is range-bound.


As The Currency Reset Begins – Get Gold As It Is “Where The Whole World Is Heading”
2, July
As the Reset Begins, Get Gold

by James Rickards for Agora Financial’s Gold Speculator

This may be the most important commentary I’ve ever written. Here’s why.

For years, financial analysts have discussed what’s called the Global Monetary Reset, or GMR. Expectations of a GMR stem from the fact that monetary policies around the world are unstable and unsustainable.


Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos by James Rickards

There is no anchor to the system. There is no limit on money printing. There is no limit on debt creation.

Such a system grows exponentially based on the false belief that governments can spend as much as they want and central banks will pick up the tab or bail out the system as needed.

Politicians love the system because they can buy votes from their citizens. Central bankers love the system because of the power and prestige it brings them. Citizens love the system because they get handouts, bailouts, pumped-up asset values and other goodies seemingly for free.

What’s not to like?

The problem, of course, is that the system is unstable and unsustainable. It’s a huge inverted pyramid of promises poised on a small sliver of real money called gold. It’s bound to tip over and come crashing down as it has many times in the past, from the Jubilees of ancient Israel to the global financial crisis of 2008.

The 2008 panic would have closed banks and capital markets globally but for tens of trillions of dollars of central bank intervention. That bailout money printing has still not been mopped up. The 2008 bailout has sown the seeds of the next crisis.

Viewing this broadly, an objective analyst can see that a new system based on some hybrid of dollars, gold and the IMF’s world money called special drawing rights (SDRs) is inevitable. This new system could even include an encrypted distributed ledger or blockchain, and might revert to fixed exchange rates instead of floating.

The GMR would be a return to something like the old Bretton Woods system (1944–1973) but with 21st-century characteristics and technology. This is what is meant by the Global Monetary Reset.

That much is clear. The open issues for students of the GMR are when it happens and how.

There are two answers to the how part. It can either happen in a proactive way by convening a new global monetary conference similar to Bretton Woods (1944), the Plaza Accord (1985) or the Louvre Accord (1987). Or it can happen in a chaotic fashion in response to a new financial crisis, as occurred at the G-20 Washington summit led by George Bush and Nicolas Sarközy in November 2008.

My estimate has always been that the GMR would be conducted in a panic due to the lack of leadership and foresight of the global monetary elites.

The answer to the when part is necessarily uncertain, but given what we know about the dynamics of complex systems and the scaling metrics of the current international monetary regime, the best answer is probably “soon.”

In a nutshell, a catastrophic collapse is coming, probably sooner than later, and the result will be an entirely new international monetary system in which the dollar is dethroned as the world’s leading reserve currency and something new is put in its place. That’s the GMR.

What if I told you the GMR already happened and no one noticed?

Here I have to acknowledge that some of the information that follows was provided to me by a source. The work of this source is tentative and requires more independent research. Yet it looks solid enough right now to share with readers.

I’ll be writing more about this revelation in my new book, Aftermath, coming Oct. 30, 2018. You can preorder a copy here.

In Aftermath, I’ll disclose more about the origin of this information.

For now, I just want to be fair and acknowledge that it originated with an unsolicited research report sent to me from a correspondent named D. H. Bauer based in Switzerland. We’ll call him “DHB” for now.

Let’s start with a simple analysis we’ve all done ourselves and expand that analysis with information from DHB. Then I’ll provide some conclusions that stem from this presentation.

We all follow the price of gold. We think of gold as about $1,320 per ounce. We say it is “up” or “down” by $10 per ounce and so on. When we do this, we are really quoting a cross-rate between U.S. dollars (USD) and one ounce of gold (GOLD).

Let’s call this cross-rate USD/GLD.

We also follow the cross-rate between the U.S. dollar and the Chinese yuan (CNY). That’s the exchange rate between the currencies of the two largest economies in the world, which combine to produce almost 40% of global GDP.

When China instituted a shock devaluation of their currency in August 2015, U.S. stock markets fell 11% in three weeks and it looked like there was no bottom. Then the Fed intervened with a delay of the liftoff in rate hikes from September–December 2015.

China devalued again in December 2015, and U.S. stocks fell 11% again from Jan. 1 to Feb. 10, 2016. It took the G-20 Shanghai Accord in late February 2016 to put an end to Chinese shock devaluations. This recent history reveals that the U.S.-China cross-rate is one of the most important metrics in world finance.

Let’s call this cross-rate USD/CNY.

Finally, if you’re a geek like me, you take a look at the U.S. dollar value of the SDR every day. It’s not a secret; the IMF actually publishes that cross-rate daily, found here. As of this writing, SDR1 = USD1.419, but that rate changes daily like any floating exchange rate.

Let’s call this cross-rate SDR/USD.

Now, you all recall the transitive law from middle-school math. In short form it says:

If A = B and

B = C, then

A = C.

In other words, if you have two equalities, you can substitute a factor from one for a factor from another and still end up with an equality.

Here’s where DHB’s insight comes in.

He took the known quantities of USD/GLD and SDR/USD and applied the transitive law to calculate SDR/GLD.

While I think about USD/GLD, USD/CNY and SDR/USD all the time, I have to admit I never thought much about SDR/GLD.

Why would I? I don’t own any SDRs and I can’t get my hands on any. The IMF only issues them to member countries, and they’re traded among the members through a secret trading desk inside the IMF.

If I want to buy gold, I use dollars. In China, they can buy gold with yuan. The idea of buying gold with SDRs may be off in the future, but there’s no active gold market priced in SDRs today.

Or is there?

DHB took a look. What he found was shocking. It’s summarized in this chart:

Source: D. H. Bauer

The timeline along the horizontal x-axis runs from Dec. 31, 2014 to March 31, 2018. The price line along the vertical y-axis is measured in units of dollars or SDRs depending on the data series. The units run from 700–1,400.

The red line is the dollar price per gold ounce (USD/GLD). The dark-blue line is the USD/GLD trend. The green line is the price per ounce of gold in SDRs (SDR/GLD). The purple line is the SDR/GLD trend.

The black vertical line indicates the date, Oct. 1, 2016, that the IMF allowed the Chinese yuan to join the “basket” used to determine the value of an SDR. (The rest of the basket consists of dollars, pounds sterling, euros and Japanese yen.)

Here’s what DHB discovered. Before China joined the SDR, both the dollar price of gold and the SDR price of gold were volatile. After China joined the SDR, the dollar price of gold continued to be volatile, but the SDR price of gold exhibited much less volatility, especially after the first few months.

Most importantly, the trend line of SDR/GLD is a near-perfect horizontal line.

In short, world money has now been pegged to gold at a rate of SDR900 = 1 ounce of gold. It’s a new gold standard using the IMF’s world money.

There’s the GMR right in front of your eyes.

It takes a while to sink in. Why did SDR/GLD go from normal volatility to no volatility overnight? The straight-line behavior of SDR/GLD after the Chinese yuan joined the SDR is impossible without some kind of intervention or manipulation. The odds of this happening randomly are infinitesimal.

The SDR/GLD horizontal trend line after Oct. 1, 2016, is an example of what statisticians call autoregression. This only appears if there’s a recursive function (a “feedback loop”) or manipulation or if it’s presented as a fraud. This is how Harry Markopolos spotted the Bernie Madoff fraud; Madoff’s returns were too steady and consistent to be real given the volatile nature of capital markets.

In the case of SDR/GLD, we can rule out a recursive function because gold trades in a relatively free market determined by supply and demand. We can rule out randomness (statistically impossible) and fraud (the data come from public sources; no one is making them up). That leaves manipulation as the only possible explanation.

How would you conduct such a manipulation, and who’s behind it?

To peg a cross-rate, in this case SDR/GLD, you need a large floating supply of both components or a printing press to make as much as you need. Basically you conduct open market operations.

If the SDR price of gold rises above SDR900, you sell gold and buy SDRs (or the currency basket). If the SDR price of gold sinks below SDR900, you buy gold and sell SDRs (or the currency basket). By monitoring markets and intervening continually with open market operations in gold and currencies, you can maintain the peg.

There are only four parties in the world who could conduct such a manipulation: the U.S. Treasury, the ECB, the Chinese State Administration of Foreign Exchange (SAFE) and the IMF itself. These are the only entities with enough gold and SDRs to be able to conduct the open market operations needed to peg the price.

We can eliminate the U.S. Treasury and ECB as suspects. That’s because they are relatively transparent about their total gold holdings, foreign exchange reserves and the SDR component of their reserves. (For the ECB we look at the large members such as Germany and France for the data.) If either one were conducting open market operations, there would be fluctuations in holdings of gold and SDR component currencies that would appear in official reports. No such fluctuations appear, so they’re off the list.

That leaves SAFE and the IMF. Both are nontransparent. China has about 2,000 tons of gold (probably much more, but they don’t disclose the excess) and has been acquiring SDRs in secondary market trading in addition to official allocations to IMF members.

The IMF has about 1,000 tons of gold and can print all the SDRs it wants with its SDR printing press. The IMF also makes loans and receives principal and interest in SDRs. The SDRs can be traded through the IMF’s secret trading desk.

Even now, the IMF is preparing to bail out Argentina. When that happens, the IMF loans will be in SDRs. Argentina needs dollars to defend its currency, so they’ll have to swap their new SDRs for dollars. China will be a willing swap counterparty through the IMF’s secret trading desk.

That’s how China acquires more SDRs than its IMF allocation permits. Those “extra” SDRs are crucial to China’s ability to conduct open market operations in gold and SDRs.

The gold can be traded secretly through the Bank for International Settlements (BIS), which traded Nazi gold in the Second World War. The BIS is super-secret and is controlled by the same people who control the IMF.

China can also conduct gold purchases and sales for yuan or dollars on the open market in Shanghai and London and separately buy or sell SDRs for dollars or yuan. China can also buy or sell the SDR basket currencies separately as a synthetic SDR to manipulate the price of the actual SDR.

This kind of intervention by China to maintain the SDR/GLD peg might also explain the mysterious “gold slams” we see in Comex gold futures trading with regularity.

Analysts have speculated for years that China was acquiring gold in anticipation of a new gold-backed yuan. I always disputed that idea because China does not have a good rule of law. The yuan lacks the kind of deep liquid bond markets, primary dealers, repo facilities, futures contracts and other legal infrastructure needed to be a major reserve currency with or without gold backing. The yuan is a decade or more from becoming a major reserve currency

But the SDR is an ideal vehicle for a gold-backed currency because it has the support of every major economic power on Earth through the IMF.

The bottom line is that China has now pegged the SDR to gold. This is highly ironic, because when the SDR was created in 1969 it was originally pegged to gold and defined as a weight in gold (SDR1 = 0.88867 grams of gold). That peg was abandoned soon after, even as the dollar peg (USD1 = 1/35th ounce of gold) was also abandoned.

Since this SDR peg to gold is informal, it can be abandoned at any time. It probably will be abandoned because the Chinese sponsors of the peg have ignored the lessons of 1925 when the U.K. returned sterling to the gold standard at the wrong price. The result was catastrophic deflation that presaged the Great Depression.

The Chinese peg of SDR900 is far too cheap to be sustainable given the scarce supply of gold and the growing supply of SDRs. More to the point, the IMF will print trillions of SDRs in the next global financial crisis, which will prove highly inflationary.

Still, this is a historic development, and we’ll be watching it closely inRickards’ Gold Speculator. Even if the peg is unsustainable in the long run, it’s a clear short-run signal that China is betting on the SDR and gold, not the yuan or the dollar.

My advice under these circumstances is simple. Dump dollars, yuan and SDRs (if you have any) and get gold.

That’s where the whole world is heading.

All the best,

Jim Rickards
Editor, Rickards Gold Speculator

https://news.goldcore.com/ie/gold-blog/currency-reset-gold-james-rickards/
What makes the desert beautiful is that somewhere it hides a well.

 

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