Tag Archives: Shanhai Gold Exchange

Why Was Gold Slammed And The Dow/SPX Pushed Higher?

Something ugly could be hitting the financial/economic system soon. To blatantly hit gold like this when no one is around is a sign of desperation. The FANGS had an brutal reversal today despite the squeeze higher in the broad indices. TSLA soared early on Elon Musk’s shameless puffery – which often borders on outright fraud – and reversed to the downside, while the SPX and Dow were being pushed higher by the Plunge Protection Team.  Both indices closed well of their higher.  Auto sales for June were once again well below expectations.  GM’s inventory soared despite a stated goal to reduce it inventory from over 110 days to 70.  A lot of workers will lose their jobs.  Household debt – mortgage, auto, credit card – will go unpaid…

The Trump Presidency is floating on the fumes of questionable sanity as an impeachment Bill is being sponsored in the House by 25 Reps. The case to be made that Trump is not mentally competent enough to have his index finger on the red button that launches nukes at Russia grows stronger by the day.

Doc and Eric Dubin invited me on to their weekly Money and Markets weekly market recap/analysis to discuss – today notwithstanding – very interesting trading action in the gold/silver paper “markets” in the west and the physical, real markets in the eastern hemisphere:

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SoT Ep 30 Craig Hemke: The U.S. Has Come Off The Rails – Mass Civil Unrest Is Coming

In a time of universal deceit – telling the truth is a revolutionary act. – George Orwell (Eric Blair)

All China has to do to flush our system down the toilet is to tweet out: “bid wanted in comp for $1.2 trillion Treasuries.” That’s it. Our system is done – we’re dust. – Shadow of Truth

They’re at the point now (the central planners) where they are just openly making things up and manipulating data just to game whatever they want to do. It is surreal to watch. – Craig Hemke, Shadow of Truth

When a nation owes another nation a million dollars, the debtor has a problem. When a nation owes another nation $1.2 trillion dollars the creditor nation has a problem. How does the creditor nation, China, handle this fact? What if China began using the interest payments from the debtor nation, the United States, to finance a new global bank, like the BRICS Bank and the AIIB? What if the creditor nation, China, began using the interest payments, roughly $300 billion annually, to build a New Silk Road that solidifies relations with their neighbors, creates commerce for both the neighbor and China and used some of the funds to build up their military? This would create a natural exit strategy for China that allows her to walk away with a clean break from the parasite nation, the United States. No harm, no foul.

Isn’t this exactly what we are seeing unfold today? Each of the scenarios described above are in motion and racing towards completion. This is unfolding as the Chinese, along with the Russians, are acquiring all the gold and silver that is being made available on the planet. The Chinese have been encouraging their citizens to acquire gold for several years. If you think for a minute the Chinese are acquiring this gold to make more jewelry you are in for a rude awakening. “He who has the gold makes the rules.” – Anonymous.

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As Chris Powell explained in a recent interview the Chinese are not acquiring all this wealth in the form of gold for the benefit of the goldbugs. The Chinese are acquiring all the gold they can find to reign in the power. Gold is loyal to everyone and to no one. Gold is money and has been money for approximately 5,000 years. “He who has the gold makes the rules.” – Anonymous

Will tomorrow look like today? Will there always be “just-in-time” delivery of groceries, gasoline and every other aspect of current U.S. economy? What if one small piece broke, like an interest payment to the Chinese? What about something a little smaller, like a dirty bomb that explodes at the wrong time in the wrong place, like somewhere in a Chinese province? What effect would this have on the flow of goods from China, the manufacturer of the world, if it were determined the U.S. government was involved with the “dirty-bomb”? Where would you get your “stuff”? What would your world look like?

Gold and silver are manipulated markets. They are tiny markets, especially in comparison to something like the Dow Jones or bond market. The impact these tiny markets have on their giant sized brothers is enormous. Why else would the banking cabal devote so much time, resources and manpower to their manipulation. The reason is very simple. Gold and silver are real, tangible money and a representation of real wealth.

Chinese Gold Buying Stampede

It seems the longer the Federal Reserve and its representative bullion banks keep a manipulative lid on the price of gold using paper gold naked shorts, the more physical gold the Chinese buy:

We can see elevated gold purchases on wholesale level (SGE withdrawals) of late, rapidly being sold to end consumers in the shops at the moment. China Gate News Channel reported on January 3rd a “stampede phenomenon” in a shopping mall in Beijing, were gold was sold at a rate of 400,000 yuan per minute (Bullionstar.com)

On the Shanghai Gold Exchange itself, another 59 tonnes were withdrawn last week (Bullionstar.com).  That makes a total of 374 tonnes YTD, which is up 17% year over year.  Please note:   This does not take into account the amount of gold being accumulated by China’s Central Bank, The Peoples Bank of China.   The PBOC is the only entity in China that is not required to source its gold from the SGE.   Here’s a snapshot of the of the massive gold accumulation going on in China (source:  goldchartsrus.com):

SGE

It is highly probable that China’s gold accumulation, including whatever amount the PBOC is taking down, exceeds the annual global mine supply. While the Fed/US Government maintains a tight policy of using paper gold to suppress the natural market price, the eastern hemisphere continues to gorge on cheap gold. By the time the mainstream in the west wakes up to what is going on, it will be too late.

While everyone is currently worried about what will happen to the euro and the EU if Greece defaults on its debt, one has to wonder what will happen when the west – specifically the Fed/bullion banks – defaults on its massive paper/leased/hypothecated gold short position, the size of which dwarfs the amount of outstanding sovereign Greek debt…