Long before Germany sought to repatriate its gold reserves, China knew the Western central banks had rehypothecated their reserves. China was aware that the related bullion banks, who have gold accounts at the Bank of England, were grossly mismatched to the underlying physical assets. So the Chinese knew that by employing a strategy of stealthy accumulation, not just though the LBMA, they could rely on the Western central banks' continued interventions in the gold market to cap the rise of the price of gold.
This gave China the perfect opportunity to accumulate large amounts of physical gold without disturbing the market, while at the same time quietly divesting U.S. assets, without driving the price of gold higher. Eric it’s this simple: Selling gold means you are long the dollar, so the recent dollar strength has given the People's Bank of China (PBOC) the perfect window to divest these worthless dollars for real gold.
China's Grand Strategy
China has now accumulated enough physical gold that they are nearing the point where they will seek to revalue the price of gold significantly higher. This is now obvious as they are openly putting up billboards about a gold-backed global RMB currency (see below).
Eric you and I talked about this 2 years ago, but now we have reached the inflection point where China is close to revaluing gold significantly higher, which will be an earth-shaking event. They will do this by surprising global markets when they announce their real reserves. This will be the knockout punch that floors the Western paper market game, run by the LBMA Ponzi participants.
There is only one backdoor for these Western bullion banks and that is a cash settlement. The only question is: Are investors properly positioned for this earth-shaking announcement? I have been warning everyone I know to allocate aggressively into physical gold, outside of the LBMA bullion banking system.
China Now Making The Rules
The western central banks have cornered themselves, realizing too late that the PBOC have stealthily dislodged the western central bank's golden anchor. The PBOC has already gained this major victory and is already implementing the next phase of a divide and rule strategy, drawing in non-U.S. Western central banks such as Britain, France, Germany, Italy, Australia, Luxembourg and several others, into the new Asian Infrastructure Investment Bank (AIIB). The Chinese are now setting the rules, and the U.S. is demonstrating how it views China as an enemy by opposing this Chinese initiative, viewing it as a shot across its hegemony bow. Well, that's exactly what it is.
The PBOC has established China as the global hub for trading gold bullion. As soon as the Chinese fix is launched, it will challenge the paper-centric markets such as London and the United States. The new physical facing exchange is also going to be launched next month. This new exchange will both influence and be influenced by the Asian physical market fixes, unlike the joke of a London dilutive paper settled fix.
Trouble For The LBMA And Comex
The bottom line here is this arbitrage will force the LBMA/Comex exchanges to either become obsolete, or radically alter their platforms. I still see a cash settlement as the only way out, to save the mismatched too-big-to-fail Western bullion banks from collapse. Of course this will reset the price of gold significantly higher, as gold seeks to establish its true market price, free of Western price suppression. Sentiment will see as few specs invested in gold as possible when this cash settlement is effected, so we are most likely closing in on this historic event now."
at http://kingworldnews.com/andrew-maguire-letter-exposes-hsbc-vault-closures-as-war-in-gold-continues-to-rage/
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