Its been discussed by gold bugs over the last few years but Keith Barron in an interview with King World News talks about  the World Gold Council’s commissioned a report which basically says the Chinese are looking to launch a gold backed yuan. Jim Rickards in his book Currency Wars has written about the obvious move for China to back the yuan with gold and its no secret that China with its large dollar reserves are not happy with how its being debased.  With every major Central Bank flat-out printing money combined with gold repatriation stories and hedge fund Pacific Group converting its holdings to physical gold, one cannot help wonder that 2013 could be a very significant year for gold.

The second thing I want to make KWN readers aware of is the report which was commissioned by the World Gold Council.  This is an incredible document, especially coming from the World Gold Council because it’s basically saying that the Chinese are going to back their currency with gold.  This would, in turn, displace the US dollar and make the Chinese yuan the world’s reserve currency.

 The Chinese are sitting on piles of dollars right now, and while the US continues its decline, the reality is that all of the fiat currencies are in a race to the bottom.  We just saw the Bank of Japan yesterday talk about opening up QE and printing vast sums of money.  This will be an attempt to reverse their deflation with inflation.  This move by the Japanese is very, very bullish for gold.

 But between what is happening with the set up for the coming short squeeze in gold, coupled with the Chinese moving to back the yuan with gold, and the shortages we are seeing in the silver market, the outlook for gold and silver going forward are spectacular.  Quite frankly, the gold and silver bulls are going to begin to trample the bears at some point in the near future.”

Last month Stephen Leeb spoke of a chinese diplomat admitting China’s intention only to backtrack shortly afterwards.

There is a ritual we see in overnight trading.  Gold is usually up $4 or $5 at around midnight or 1 AM east coast time.  I’ll be watching gold trade at this time and I can’t count the number of times that in just a minute or two, instead of gold being up $4 or $5, it’s now down $20.  No one is trading at 12 or 1 or 2 in the morning.  Somebody is doing this and it always happens when there is no liquidity.  So you have a game of desperation going on here and the Chinese are aware of this. 

 I was just speaking to a Chinese diplomat and I said to their diplomat, ‘Your two most important commodities are water and gold.’  And this diplomat said to me, ‘Yes, we need gold to back up the yuan.’  Well this diplomat realized very quickly they had made a terrible mistake in admitting that and began to back off and stated, ‘No, it’s not to back the yuan.  It’s because of jewelry.’  But it was too late, the horse had left the barn so-to-speak.

 So the Chinese get this in spades.  The only way for them to become the world’s powerhouse and continue accumulating materials in the resource war is if they have a currency that’s backed up by gold or they have the actual physical gold itself.

The bottom line here is that when I see gold engaged in one of these drops I know it doesn’t make any sense.  The Chinese let the price of gold dip because they are smart buyers and we are playing into their hands with this ridiculous manipulation.

 This game of manipulation we are engaged in with the gold market is going to stop sooner rather than later.  Time is running out on these schemes and when it does stop and when they lose control, you had better be positioned in gold because this will be a bull market to end all bull markets.”

World Gold Council : – Gold Renminbi Mulit Currency Reserve System

Advertisements