China Vs. The Gold Cartel – No Contest!

There are so many places I could start – on this, the day before Miles Franklin’s Ft. Lauderdale Q&A Rap Session, to be hosted by my good friend, and fellow New Yorker, Kerry Lutz of the Financial Survival Network.  As of yesterday, we had nearly 200 people registered to attend, and 400 to listen to the online, interactive webcast.  This FREE event still has space available, and we invite you to either attend, or listen online.  Now that the Cartel is clearly “on the ropes” – as starkly evidenced by yesterday’s “unexpected” silver breakout – the time for the “Precious Metals Community” to coalesce its anti-Cartel forces, is NOW.  This event is just a piece of the puzzle, and I expect more and more “pieces” to fit into place throughout 2016, and beyond.

That said, the Cartel is still, per the title of my March 15^th Audioblog, “fighting to the monetary death.”  Which is why their manic defense of the $1,250/oz “line in the sand” – since first being breached by the “unexpected” $60/oz up day on February 11^th – has been so obvious to anyone with a pulse; such as yesterday, before and after gold surged to $1,256/oz; and today, after gold had the nerve to rise to $1,255 again.  Heck, they even – at “2:15 AM” of course, for the 625^th time in the past 717 trading days – took silver down, after it had just had a massive technical breakout, by $0.50/oz in a half hours’ time – before it rebounded back to $17.10/oz as I write, at 9:20 AM EST.

I know, I’m a “small fish” in the giant world of global finance.  However, when it comes to Precious Metals, I’m as aware as anyone on the planet.  Having been fully invested in not only the sector, but – from the “front lines” – the war against the gold Cartel for the past 14 years, my senses are as attuned to what’s going on as anyone.  Such as, just three days before said $60/oz up day on February 11^th, penning “the biggest news in gold market history”; when, after the historically fraudulent “silver fix” of January 29^th – when the “price” was set 6% below the prevailing market – 10% of the LBMA’s “Category five” clients, including the world’s second largest miner, Rio Tinto, abruptly re-signed their exchange seats.

Or realizing throughout February, that rising institutional demand was causing the discounts to net asset value of the closed-end bullion funds to vanish – and consequently, predicting March 7^th that “Admiral Sprott” was positioning to attack the Cartel with the first PSLV offering in five years – which he did on April 8^th, in what I deemed a “major, major blow to the Cartel.”  Well, here’s what silver has done since said “biggest news in gold market history,” and “major, major blow to the Cartel.”  Not to mention, Deutschebank admitting it has manipulated (read, suppressed) the gold and silver markets for 15 years on April 14^th; and the “Shanghai Fix’s” establishment on April 19^th (i.e, yesterday) – as the Chinese government, in no less than MSM lackey Reuters’ words, “took an ambitious step to exert more control over the pricing of the metal, and boost its influence in the global bullion market.”

And by the way, here’s another “view to the future” – which I assure you, no one else is talking about.  Which is, that the Central Fund of Canada, ticker CEF, whose $3.3 billion market cap is bigger than the Sprott gold and silver bullion trusts combined, now trades at just a 3.7% discount to Net Asset Value, compared to the 10%-15% discounts it has traded at for the past three years (which, I might add, I predicted in this February 2013 article).  This, as the discount on the Sprott physical gold trust (ticker PHYS) has recently become a 0.5% premium.  In other words, said institutional demand – which one only needs to observe the surging mining shares to spot – is growing stronger; to the point that, I have little doubt, both CEF and PHYS will join PSLV in executing Cartel-crippling offerings by year-end – just as they regularly did on the way to $1,920/oz gold and $50/oz silver in 2011.  Not to mention platinum, which remains historically undervalued, in my view.

As for today’s “view to the future,” it occurs as the headlines feature Mitsubishi following Volkswagen in admitting it has been lying about emissions data for years (say goodnight to Mitsubishi’s U.S. sales, FOREVER); Intel firing 12,000 workers, or 11% of its labor force (but don’t worry, they’ll all get waiting and bartending jobs); United Healthcare, the nation’s largest HMO, announcing it will exit essentially all states’ Obamacare Exchanges next year (don’t worry, higher healthcare premiums will add to GDP); API oil inventories, two days after the Doha clusterf**k – “unexpectedly” surging (don’t worry, in the “new normal,” rising inventories are bullish, LOL); and the day after an historic impeachment vote, Brazilian Olympic officials declared Rio De Janeiro “close to social chaos.”  Which is, the growing realization – by the entire world – that not only is China the world’s largest consumer, producer, and purchaser of Precious Metals, but that it will rule the gold and silver realm for decades to come.

Not that this should come as a shock to Miles Franklin Blog readers.  However, the mosaic built over two decades of decisive actions – from opening the gold and silver markets to the Chinese public; covertly – and now, overtly – building massive reserves; producing gold at a loss, no matter how many fiat Yuan it takes; opening numerous physical exchanges; and as of yesterday, establishing the aforementioned Shanghai Fix, clearly points to China’s increasing domination of real money, to the chagrin of the Western “powers that be’s’” increasingly futile attempts to maintain a global destructive, fiat dollar-anchored, status quo.

Of course, China’s current leadership has a stake in maintaining said status quo, too – as I assure you, they will be unceremoniously replaced when the historic stock, bond, real estate, and industrial bubbles they created crash; which in many areas, has already commenced.  However, they are irrespective working toward a long-term view of replacing the West as the world’s economic power – which assuredly they will, as China will by far have the most gold when the historically destructive, dollar-anchored fiat Ponzi scheme collapses upon the entire world.

Thus, in the coming months and years, you can anticipate both proactive Chinese actions to support gold prices – like the Shanghai Fix, for example; and reactive actions, like the imposition of capital controls, and devaluation of the Yuan.  And now that the epic Chinese bond bubble is deflating – following the stock market, and to a lesser extent, the soon-to-implode real estate market – capital controls will assuredly follow.  Let alone, now that the “Panama Papers” has cast a blinding light over illicit “safe haven” tax jurisdictions – per yesterday’s extremely astute Zero Hedge comment.

“When Chinese capital flight into Canadian real estate and offshore tax havens is curbed, we expected that gold could well follow the path of bitcoin, which has doubled since our article presenting it as an attractive alternative to avoiding Chinese capital controls.”

Last but not least, the sheer weight of billions of Chinese (and Indian) civilians running scared from their hyper-inflating currencies into history’s only real money – per yesterday’s reporting from Reuters, regarding the cause of yesterday’s “unexpected” Precious Metal surge.

“There is heavy silver buying in Shanghai – which has triggered buying in gold as well.”

Ladies and gentlemen, now that the dollar-priced gold and silver bull markets are UNQUESTIONABLY back, it is time for all we have learned about the tectonic global economic shifts from West to East to come home to roost.  And nowhere more so than China, the “epicenter” of Precious Metal buying and production.  Thus, in the upcoming, Waterloo-like battle of “China versus the Gold Cartel,” it will be NO CONTEST!Similar Posts:

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