By Dominique de Kevelioc de Bailleul
Gold bears expecting the ‘gold bubble’ to pop must be smoking that funny stuff left over from the two opium wars of the mid-1800s between the British and China. Today’s war with China finds the Son of Britain attempting a variation of the same colonialist trick by forcing, this time, funny money onto the Chinese.
Not only is Uncle Shunyuan not falling for Uncle Sam’s modern-day sharecropper scheme of purchasing real goods with counterfeit money, Americans will soon wake up to the realization that, in addition to their jobs being sent to China, their wealth, too, has set sail for the Middle Kingdom.
Those soon-to-be worthless dollars promised by Uncle Sam to retirees to pay for their golden years are being traded in for gold at an alarming rate in China. Soon, even the gold bears will have to admit they’ve been Shanghaied.
“China’s underlying financial policy is to sideline the U.S. dollar and build its domestic metals inventories, notably of gold and silver and using these to replace its huge dollar surpluses while prices are cheap,” Silver-Coin-Investor.com’s Dr. Jeff Lewis stated in a recent article, China’s move into gold and silver part of global monetary plan.
Lewis goes on to state that irrespective of China’s economy experiencing a proverbial soft or hard landing, Beijing’s near “panic” to acquire as much of the yellow metal as a means of protecting its monstrous reserves—and to protect its citizens from a collapsing 21st century colonialist empire behaving like a cornered rat—is, by far, a more pertinent issue to China’s long-term strategic goals.
“China mined a total of 355 tons, which was by far the largest amount of gold mined for any country,” Stephen Leeb told King World News, Tuesday. “And yet they are still buying every single available ounce they can get in the open market.
“ . . . gold has become increasingly important and China has encouraged its citizenry to buy gold,” added the author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life. “With the stock market already frustrating people in China, the Chinese, interestingly, will not want gold to be added to that list of frustrations for their investing public.”
As a reminder of a WikiLeaks cable released last year, published by its Aussie founder Julian Assange (a traitor, of course—or stooge?), the Chinese are quite aware of the dollar’s role for maintaining the neoconservative goal of complete global U.S. hegemony; and with Russia’s help, along with the other motivated members of the BRICS nations, Uncle Sam’s meddling, threatening, extorting, bribing and swindling ways with its ‘partners’ in the The-World-is-Flat nonsense, the U.S. will assuredly near its MF Global sudden death moment—but on China’s timetable, at the very latest.
US embassy cable – 09BEIJING1134
MEDIA REACTION: U.S.-CHINA-JAPAN RELATIONS, U.S. POLICY, CHINA’S GOLD RESERVES
3. CHINA’S GOLD RESERVES
“China increases its gold reserves in order to kill two birds with one stone”
“The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): “According to China’s National Foreign Exchanges Administration China ‘s gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.” [emphasis added]
Back to Leeb, who believes the Chinese won’t delay its “frantic” accumulation of gold by finessing better gold prices. Instead, Beijing has surreptitiously established a floor under the gold market in the mid-$1,500 area, as it catches as much falling metal from the pockets of the upside-down logic of the gold bears, who still believe (conveniently serving as useful idiots to the Chinese) the safety trade remains with the U.S. dollar. Beijing has high hopes for U.S. investors to remain ‘stoned’ for as long as possible.
“In the past, if the Chinese could step out of the way and let gold tumble in price so they could purchase it cheaper they would,” said Leeb. “Right now I think they just don’t want to add to their citizen’s frustrations with key markets, gold being one of them. If I’m right, then the Chinese will continue to support the price of this metal.”
Sprott Asset Management Chief Investment Strategist John Embry, another regular of King World News, agreed with Leeb. In Embry’s interview with Eric King, Tuesday, he intimated that the Fed must allow the gold price to rise very soon to stop a Charles de Gaulle run on the gold market by the Chinese.
Embry also echoes Goldmoney’s James Turk’s daredevil prediction that August will be the month the Chinese will be stopped from buying “cheap” gold due to apparent shortages of the physical metal seen coming. The theory goes: higher prices create marginally higher supplies.
“We are moving toward a fundamental shortage of gold, and I believe it may start as soon as next month,” Embry proffered. “I think the bottom is being put in right now . . .
“But this action is all just building a massive base in gold. I think the big issue going forward is this growing shortage of available physical gold. I strongly believe one of the reasons for the shortage is a lot of it is headed East. [emphasis added].
“The last four or five months of the year gold should challenge and easily take out its all-time high.”