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WGC: Chinese Move Toward Gold Backed Yuan

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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

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Was MF Global a Tool?

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And more dirty tricks in the PM suppression story as told by JS Kim (Managing Director, Chief Investment Strategist & Founder of SmartKnowledgeU)

Did bankers use the MF Global to suppress gold and silver prices and create the panicked appearance of collapsing precious metals to give themselves additional precious time to delay the crash of the Euro and the US Dollar? As crazy as this sounds, a closer investigation of some key data seems to imply this possibility.

 

bankers increasingly turned to the paper futures markets to manipulate and control the price of gold and silver and also served up additional bogus derivative products to the public like the GLD and SLV ETFs. Bankers knew that there was no way they could possibly control the price of gold and silver if the supply and demand determinants of physical gold and physical silver had anything to do with the price, so they conspired to fool the world into believing that the fake paper price they set was set by the supply and demand of the physical markets.

 

And here’s where MF Global enters the banking cartel gold and silver price suppression scheme. Today, short-term futures and spot prices of gold and silver have almost nothing to do with the physical supply and demand dynamics of gold and silver, as odd as that may sound. Bankers invented fake paper gold and silver contracts, because they knew that if they could not fulfill contractual obligations to deliver physical gold and physical silver because the contracts were a binding lie to begin with), that they could always renege on these contractual obligations and give the people the nothingness they truly owned in return. And thus, we have the story of MF Global.

 

Source: Aweber

Hint of Gold Price Manipulation

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Those familiar with stories of gold price suppression and manipulation will not be surprised in todays report from GoldCore. There is a hint from the data available from the LBMA that price looks to be fixed. Why would this possibly happen? 😉 This post is an interesting introduction into gold supression by central banks. For futher information on this subject I would recommend looking at GATA who are an action group dedeicated to exposing the manipulation in this market. Another good site, but a little unusual is hosted by USAGold but written by Another (Thoughts).

The London AM and PM Gold Fix (USD) of the last two days in a row have been identical – to the cent – which is highly unusual.  View data from LBMA Website.

On Monday and Tuesday, the 28th and the 29th of November, the gold fix was identical in dollar terms and nearly identical in pound and euro terms.

On Monday, the 28th, gold’s AM and PM fix was at $1,714.00/oz.

On Tuesday, the 29th, gold’s AM and PM fix was at $1,717.00/oz – exactly just $3.00 higher than the day before.

It may be a coincidence but if it is one, it is highly unusual as it happens rarely.

While it has happened twice in 2011 – on January 10th and February 2nd – it has never happened two days in a row. It happened six times in 2010 but again never for two days in a row.

Should it happen a third day in a row today – then questions will be asked as to whether the official sector and or bullion banks are attempting to fix prices at this level.

This was attempted by the London Gold Pool in the 1960’s when the Federal Reserve and seven European central banks capped and artificially suppressed the price of gold for a few years before the controls collapsed in 1968 due to free market realities.

Gold rose 24 times in the next decade from $35/oz in 1971 to $850/oz in 1980.

Obviously, there is a motivation for attempting to cap gold prices due to a real risk of an international monetary crisis due to the growing European and global debt crisis – not to mention an increasingly likely European currency crisis.

It is too soon to jump to conclusions and judgment must be suspended for now.

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