Gold Catalyst: Economist John Williams: Financial Collapse if Russia Sells U.S. Dollar Holdings TNR.v MUX GDX

  With Ukraine in the headlines Greg Hunter discusses with John Williams the complications for the US Dollar Reserve Currency Status of the ongoing Financial War. China has sold the record amount of US Treasuries in December and buying the record amount of Gold. Today US Dollar has crashed below 80.00 again and closed at 79.66. Russia has already warned US that any sanctions will come back to those who will implement it. With China siding with Russia we can expect the acceleration of De-Dollarisation now. 

US Dollar Crashed Below 80.00 - Will Gold Move Higher Now? GLD, MUX, TNR.v, GDX

  

  FOREX market is moving very fast today with US dollar move nothing less than to be called crashing down below 80.00. It stands at the 79.78 at the moment of writing with Euro at 1.3861 and Pound at 1.6544. Will Gold finally move higher now from potential Double Bottom formed this year? 10 Year Treasuries are pushing the all-important level of 3.0% now. All metals are moving higher today with Copper up 1.58%.

The Big Squeeze - Mystery Hand Scoops Up Copper MUX, TNR.v, GDX, CU

"Interesting time comes for the Copper plays. Commodities are so much hated asset class now, that the move could be very unexpected for many people, when rotation starts from overpriced equity markets into the real assets plays."

Jesse: Record COMEX Gold Claims Per Deliverable Ounce of Gold at 92 to 1 GLD, MUX, TNR.v, GDX

 Jesse reports that we have another All-Time-High leverage at COMEX with 92 Owners per one once of Gold.

Jesse: Record COMEX Gold Claims Per Deliverable Ounce at 79 to 1 GLD, MUX, TNR.v, GDX

  "Jesse reports that the Game Of Musial Chairs in the Western Fractional Gold Reserve System is getting into the new stage with the record level of leverage. Now report from Bloomberg can be put into another perspective." 

Bloomberg: London Gold Vaults Are Virtually Empty GLD, MUX, TNR.v, GDX

Bloomberg quite suddenly provides some really interesting information about the state of the gold market and ongoing manipulations around it these days. Could the reports about JPMorgan being Net Long Gold now be correct in the end?

Jesse: Record COMEX Gold Claims Per Deliverable Ounce of Gold at 92 to 1 GLD, MUX, TNR.v, GDX

 Jesse reports that we have another All-Time-High leverage at COMEX with 92 Owners per one once of Gold.

Jesse: Record COMEX Gold Claims Per Deliverable Ounce at 79 to 1 GLD, MUX, TNR.v, GDX

  "Jesse reports that the Game Of Musial Chairs in the Western Fractional Gold Reserve System is getting into the new stage with the record level of leverage. Now report from Bloomberg can be put into another perspective." 

Bloomberg: London Gold Vaults Are Virtually Empty GLD, MUX, TNR.v, GDX

Bloomberg quite suddenly provides some really interesting information about the state of the gold market and ongoing manipulations around it these days. Could the reports about JPMorgan being Net Long Gold now be correct in the end?

Jesse Cafe Americain:

Comex Claims Per Deliverable Ounce of Gold at 92 to 1 - Let Them Eat Treasuries

Luckily for the Comex most of the gold deliveries this month have been taken by JPM for their 'house account.'

January is not an active month for the precious metals on the Comex, so the wiseguys only need to muddle through the next couple of weeks, and then it should be clear sailing until February.

I hear the bullion banks are putting some heavy pressure on the miners to hedge their forward production, and even on some central banks to lease more gold. I am a little surprised that there have not been more acquisitive moves on the miners at these fire sale prices.

This situation on the Comex is not a default scenario per se. There is plenty of gold available, but it might require higher prices for customers to present their bullion for delivery. Unless of course that customer is a big bullion bank which is playing multiple sides of the same market.

Still, it pays to be prepared I suppose, even for the unlikely. CME Seeks To Broaden Cash Options In Clearinghouse Members Default Rules

Have a great holiday.

Gold Manipulation - Kissinger: "Why is it against our interest to have gold in the system?" GLD, MUX, TNR.v, GDX

  

  We continue our research about the Gold price suppression: who is doing this manipulation and why. With Bitcoin crossing $1000 and other crypto-currencies going parabolic we can see the hunger for the FIAT alternatives. We think that despite all very positive developments introduced by Bitcoin it is in a Bubble stage now due to its unbelievable vertical rise. Its bust will bring attention back to Gold and Silver and next step will be the introduction of crypto-currency backed by Gold - it will be the real game changer.

  So far China is using all these games with Gold price suppression to accumulate Gold and this year we see the record buying. Announcement of its Gold reserves can bring the very sobering reality to the financial markets. China will not accept Bitcoin for its Treasury redemption and it is not going to increase its reserve holding any more. US Dollar is losing its Reserve Currency of choice status and all recent "flyover games" just confirm U.S. financial vulnerability in line with Sirya and Iran developments.

Bitcoin vs. Gold: The Future of Money - Peter Schiff Debates Stefan Molyneux GLD, MUX, TNR.v, GDX

We have a great conversation about Bitcoin between Peter Schiff and Stefan Molyneux. You can find a lot of additional information on Bitcoin from Stefan's video. Everybody decides for themselves where is the Intrinsic Value and where is the Bubble. We are siding with China here - who is buying record amounts of Gold this year with Thailand, Turkey and other Asian countries.

Peter Schiff: On Taper, China's Bombshell Announcements For Treasuries, Dollar And Gold GLD, MUX, TNR.v, GDX

"Peter Schiff talks about the bombshell of the year - China has announced the Mother Of All Tapering -  PBOC Says No Longer in China's Interest to Increase Reserves. China is ready to reduce its balance sheet and they do not have to sell any US Treasuries - during the operation Twist they have used the golden opportunity and rolled over the long term treasuries into the shorter maturities. China can just allow US to repay maturing US Treasuries. We do not think here that they will accept Bitcoin. They have made this announcement after the record buying of Gold and some people are estimating that official Gold reserves are much higher than officially recognised today.

  It means that if China leaves to its commitment - there will be no China's bid for US Treasuries of MBS - how FED can Taper now? They will have to increase the amount of QE just to keep the market from falling! US Dollar will go down with rising Interest Rates and additional strain on the economy and fiscal budget and Yuan will appreciate - and it was another bombshell: China will allow it to do so now.

  Market is still in over dose mood with Bubbles popping everywhere and All-Time-Highs and does not pay any attention to this news. But US Dollar continues to print very Bearish candles on Daily chart below and next few weeks will show the magnitude of this Chinese move for the global finance system. Gold will benefit the most from this shift once the Market will realise the magnitude of this situation and tectonic shift in the global financial system.

  US dream about the Stronger Yuan is happening now for real, but be careful what you wish for! US Dollar will go down relatively to Yuan and it will push Commodities and Gold prices higher in dollar terms. China will stimulate Internal Growth and will lose some Export. Inflation will pick up with rising Import prices in U.S. And if it is now FED's wish: to have more Inflation - this very delicate balance will be very hard to keep. Absence of China from Treasury market and lack of speculators without the Bernake's put from FED can make much higher Interest Rates reality very fast."

GATA:

State Dept. minutes confirm that whoever has the most gold makes the rules

Friday, November 29, 2013

Dear Friend of GATA and Gold:

Gold researcher Koos Jansen tonight calls attention to the minutes of a U.S. State Department meeting in April 1974 summoned by Secretary of State Henry Kissinger to consider the danger that the price of gold might get beyond the U.S. government's control.

The objective of U.S. policy about gold during this time has not been secret; GATA has cited government records demonstrating it. For example:

http://www.gata.org/files/ArthurBurnsLetterToPresidentFord-June1975.pdf

http://www.gata.org/node/12551

But the minutes published by Jansen tonight are especially remarkable for making explicit the U.S. government's recognition of what some gold advocates call "the golden rule" -- that is, whoever has the most gold makes the rules.

The meeting is addressing what is perceived as the increasing desire among Western European countries to revalue their gold reserves upward, thereby increasing gold's role in the international financial system, while U.S. policy has been to demonetize gold so as to leave the U.S. dollar unchallenged as the world reserve currency.

Secretary Kissinger asks the meeting: "Why is it against our interest to have gold in the system?"

He is answered by his assistant undersecretary of state for economic and business affairs, Thomas O. Enders.

The minutes, found by Jansen in the State Department archives in Volume 31 of "Foreign Relations of the United States, 1973-76," record Kissinger's exchange with Enders this way:

* * *

Mr. Enders: It's against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings -- about $11 billion -- a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We've been trying to get away from that into a system in which we can control ...

Secretary Kissinger: But that's a balance-of-payments problem.

Mr. Enders: Yes, but it's a question of who has the most leverage internationally. If they have the reserve-creating instrument, by having the largest amount of gold and the ability to change its price periodically, they have a position relative to ours of considerable power. For a long time we had a position relative to theirs of considerable power because we could change gold almost at will. This is no longer possible -- no longer acceptable. Therefore, we have gone to Special Drawing Rights, which is also equitable and could take account of some of the less-developed-country interests and which spreads the power away from Europe. And it's more rational in ...

Secretary Kissinger: "More rational" being defined as being more in our interests or what?

Mr. Enders: More rational in the sense of more responsive to worldwide needs -- but also more in our interest. ...

* * *

So there you have it. Whoever has the most gold can control its valuation -- and implicitly the valuation of every currency -- and thereby create the most "reserves," the most money, money being power. The interest of the United States, at least as it was perceived at that meeting at the State Department in April 1974, was to dominate the world through the power of money creation.

Few observers would deny the success of that policy from 1974 and earlier right up to the present day. The current war over gold, a war raging nearly everywhere today except in the mainstream financial news media, which strive desperately to overlook it, is a war for world domination through the power of money creation. Whoever gets the most gold will control its valuation, control the valuation of other currencies, and make the rules for the international financial system.

The minutes of the April 1974 meeting at the State Department are posted at Jansen's Internet site, In Gold We Trust, here:

http://www.ingoldwetrust.ch/minutes-of-kissinger-meeting-on-gold-1974

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc."

US Dollar And Gold - PBOC Says No Longer in China’s Interest to Increase Reserves GLD, MUX, TNR.v, GDX

  

  We are following the groundbreaking changers coming out of China after The 3rd Plenum and PBOC drops another shell-bomb on the US Dollar today. We are witnessing the end of US Dollar as the Reserve Currency of Choice now. Who will be buying all these US Treasuries after that? How can FED Taper now? We can be assured about much higher interest rates with very far reaching implications for the economy and the U.S. fiscal budget.

  Timing of this release is very interesting - just yesterday Gold was killed after the release of FOMC minutes. We are entering the new dramatic stage of the Currency Wars, when China picks the old Austrian economics truth - strong currency means strong country. How long Gold Smashing can keep it down with COMEX running on fumes and record high leverage?

And another move by China is reported by ZeroHedge:

China Fires Shot Across Petrodollar Bow: Shanghai Futures Exchange May Price Crude Oil Futures In Yuan

FOMC Minutes Reveal Taper Likely In "Coming Months" - Almost Definitely In Coming Years. Gold Smashed For Conviction

Gold: PBOC to ‘Basically’ End Normal Yuan Intervention, Zhou Says GLD, MUX, TNR.v, GDX

  "Now we have a better insight into the recent record level Gold buying by China. Head of PBOC talks about currency flexibility and acceleration of yuan convertibility. All announced reforms target to jump start the new phase of Chinese economic growth with Internal Consumption becoming the main driver. In this situation stronger Yuan means stronger purchasing power in China, less US Treasuries buying (which is happening already) and higher commodity prices in US Dollar terms."

RJ Wilcox: China’s Central Bank Gold Reserves are Growing Rapidly GLD, MUX, TNR.v, GDX

"We are monitoring the situation with Gold demand from China as it is the main driver for the Gold market now. So far this demand has backed Gold to withstand the numerous attacks in the paper market to allow Janet Yellen to implement even more aggressive easing polices at the FED. 

  Rising Gold price indicates FIAT currency debasement, pushes real interests up, which economy and fiscal budget can not sustain at the moment. These official Gold holdings numbers are already out of date and the question is how much Gold China really already holds now and you can add to it the state level encouragement for citizens to accumulate Gold in China."

Bloomberg:

PBOC Says No Longer in China’s Interest to Increase Reserves

The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuanwrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.

Enlarge image

Yi Gang, deputy governor of People’s Bank of China and head of the State Administration of Foreign Exchange, said in the speech that the appreciation of the yuan benefits more people in China than it hurts. Photographer: Brent Lewin/Bloomberg

5:00

Nov. 20 (Bloomberg) -- Robert Hormats, former U.S. undersecretary of state for economic growth, talks about the outlook for China's planned economic reforms and outlook for talks in Geneva between world powers and Iran over a nuclear deal. Hormats speaks with Tom Keene on Bloomberg Television's "Surveillance." Judd Gregg, chief executive officer of the Securities Industry and Financial Markets Association, also speaks. (Source: Bloomberg)

6:27

Nov. 19 (Bloomberg) -- Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, talks about China's economy. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)

5:35

Nov. 21 (Bloomberg) -- Simon Derrick, the London-based chief currency strategist at Bank of New York Mellon Corp., talks about global currency market imbalances and China's yuan policy. He speaks from Singapore with Angie Lau on Bloomberg Television's "First Up." (Source: Bloomberg)

7:07

Nov. 19 (Bloomberg) -- Pauline Loong, managing director at Asia-Analytica, talks about China's reform plan and the outlook for the nation's economy and financial system. She speaks with Angie Lau on Bloomberg Television's "First Up." (Source: Bloomberg)

China’s foreign-exchange reserves surged $166 billion in the third quarter to a record $3.66 trillion, more than triple those of any other country and bigger than the gross domestic product of Germany, Europe’s largest economy. The increase suggested money poured into the nation’s assets even as developing nations from Brazil to India saw an exit of capital because of concern the Federal Reserve will taper stimulus.

Yi, who is also head of the State Administration of Foreign Exchange, said in the speech that the yuan’s appreciation benefits more people in China than it hurts.

‘Less Interventionist’

His comments are “consistent with the plans to increase therenminbi’s flexibility so they become less interventionist,”Sacha Tihanyi, senior currency strategist at Scotiabank in Hong Kong, said by phone today. The central bank may widen the yuan’s trading band in “the coming few months,” he added.

The yuan’s spot rate is allowed to diverge a maximum 1 percent on either side of a daily reference rate set by the People’s Bank of China. The trading range was doubled in April 2012, after being expanded from 0.3 percent in May 2007. The band could be widened to 2 percent, Hong Kong Apple Daily reported today, citing an interview with the Hong Kong Monetary Authority’s former chief executive Joseph Yam.

Capital inflows into China accelerated in October, official data suggest. Yuan positions at the nation’s financial institutions accumulated from foreign-exchange purchases, a gauge of capital flows, climbed 441.6 billion yuan ($72 billion), the most since January.

About half of October’s increase in the positions was attributable to surpluses in trade and foreign direct investment, with the rest accounted for by inflows of “hot money,” Goldman Sachs Group Inc. Hong Kong-based analysts MK Tang and Li Cui wrote in a Nov. 18 note.

Stronger Yuan

The yuan has appreciated 2.3 percent against the greenback this year, the best-performance of 24 emerging-market currencies tracked by Bloomberg. Non-deliverable 12-month forwards rose 0.2 percent this week and reached 6.1430 per dollar on Nov. 20, matching an all-time high recorded on Oct. 16. The currency was little changed at 6.0932 as of 10:33 a.m. in Shanghai today.

“It appears that many in the People’s Bank think the time is about right to scale back currency interventions,” Mark Williams, London-based chief Asia economist at Capital Economics Ltd., wrote in an e-mail yesterday. “But China has got itself into a situation where stopping intervention will be very hard to do” and comments such as Yi’s will spur speculative inflows, he added.

Less intervention and smaller gains in foreign-exchange reserves may damp China’s appetite for U.S. government debt. The nation is the largest foreign creditor to the U.S. and its holdings of Treasuries increased by $25.7 billion, or 2 percent, to $1.294 trillion in September, the biggest gain since February. U.S. government securities lost 2.6 percent this year, according to the Bloomberg U.S. Treasury Bond Index. (BUSY)

Yi’s comments didn’t imply China will be cutting its holdings of U.S. government debt, said Scotiabank’s Tihanyi. “They are probably going to keep their allocations reasonably stable unless there’s a big policy shift, but it means they will possibly be buying less at the margin,” he said.

To contact Bloomberg News staff for this story: Xin Zhou in Beijing at xzhou68@bloomberg.net; Fion Li in Hong Kong at fli59@bloomberg.net"