China is the largest holder of gold in the world. China has purposefully downplayed the actual amount of Gold they hold in reserves, but the reality of their gold holdings will eventually be revealed when they feel the time is right.
China has been voraciously importing gold internationally, as well as hoarding all of the gold they produce domestically for decades. No gold ever leaves China. In addition, the Chinese government is promoting its citizens to buy and hold gold as insurance against a currency collapse.
This means that virtually all of the world’s gold available for trade is moving from the West to the East in record amounts. There is a reason why China wants to control the price of gold, considering they own the largest share of the world’s physical gold.
They know that the global economies are faltering and they also know that when they fall, China will be in a position to back their currency, the Yuan, with gold as the new world reserve currency, thus giving China control over the world’s monetary system, just like the US has had for the past 80+ years.
This will make China the new global economic power as the US falls into 3rd world status. It will take decades before the US dollar will be able to recover from losing its reserve currency status.
The latest step in China’s plan to control the price of gold was the opening of the SGE gold fix on April 19th, 2016. This will soon become the number one source for the gold price fix in the very near future, as they will only trade physical metal on this exchange rather than using a fractional reserve exchange like the Comex or LBMA, which is a Ponzi scheme.
In addition, China has shocked the world by stating that they will not allow conversion, either to or from US Dollars for the new gold backed Yuan. China does not want any additional US Dollars than they already own because they know that the US is broke and the dollar will soon be worthless. In fact, they are dumping their US Dollar reserves as fast as they can.
China will soon dominate the world economy and investors who own gold and silver will reap the benefits of the new price fix, as the price of gold will ultimately head to $10 - $20,000 or more. The Chinese will make this happen for their own benefit.
In last week’s report, I mentioned that the price of gold and silver on the Comex will be arbitraged out of existence. This means that investors will buy gold from the Comex at lower prices than can be sold at the SGE, therefore, physical metal will be bought from the west and then sold in the east for a profit. This is known as arbitrage.
The problem is that the Comex doesn’t have enough physical gold and silver to deliver, therefore; as the remaining metal is demanded for delivery, the Comex has no choice but to default on delivery.
Once this happens, the whole system will come tumbling down because of the revelation that the entire US monetary system is nothing but a Ponzi scheme.
We are so close to this happening that it could virtually happen any day now. It’s time to be concerned and it’s time to get prepared for a complete collapse of the system.
Today is option expiration for the LBMA. We had the Fed speak on Wednesday and option expiration today, so I didn’t expect the metals to do much this week since the Cartel was trying to hold the price down below 1250. However, it appears that they lost control on Thursday as gold and silver broke out and is now headed to 1280 resistance. If it breaks 1280, then expect a rocket launch from there.
Since Deutsche Bank admitted to gold manipulation a couple of weeks ago and agreed to rat out the Cartel members, there are multiple class action lawsuits being organized against the Banks responsible for the price suppression of the last 5 years. As a result, the manipulation is beginning to wane.
You should also understand that although I share this report with a bunch of gold bug subscribers, mom and pop (the public) is still not invested in gold and silver. In fact, just the mention of it tends to still bring vicious replies of ‘conspiracy theorist’ or ‘gold doesn’t provide any return’.
There is nothing we can do for them now. We’ve tried to warn them, but they will be left in the dust, as always.
Once this bull market gets underway, the first price explosion will be from the commercial shorts covering their short positions. This is going to create a huge short squeeze and send the price of metals into the stratosphere.
This bull market is in its early stages and those expecting large pull backs will be left behind. Any pull backs now will be shallow and brief as the market goes parabolic. There is still a huge amount of money that will find its way into this bull market over the coming weeks and that will just add to the frenzy of panic buying into the metals.
Once the bull becomes obvious to mom and pop investor, they will try to get on board, but I think it will be too late and they won’t be able to get a bid.
I believe the Comex and LBMA are on their last legs and soon we should see a default. The homerun in gold and silver we have all been waiting for is coming very soon. You need to get your positions in place now, if you haven’t already, to benefit from the largest transfer of wealth in history.
Stock Market: (SPY) (QQQ)
It’s just a matter of time before stocks turn down with a vengeance. The catalyst in my opinion will be the price of gold and silver going parabolic, as that should signal a loss of confidence in the system.
The roll over for stocks may have started as early as Thursday with the break of the uptrend line. If the price crosses the 50 DMA next week, we should see major downside momentum.
The stochastic is signaling a rollover of this cycle.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
The price of crude is blowing my mind. There is no good news to support this panic buying and the only drivers have to be the decline of the dollar’s value causing all commodities to surge right now in dollar terms.
In addition, there is the manipulation of the headlines regarding OPEC and the fantasy of them freezing production. It’s just not going to happen!
Recent global economic growth indicators are getting worse; there is very poor demand for oil and increasing oil inventories, plus US Shale companies are beginning to increase production to keep from going completely bankrupt.
This is a no win situation for oil as the supply glut and low demand attributes will not support this for long. This price action will have to turn soon. The chart below shows extreme overbought conditions.
US Treasury Bonds: (TLT)
Treasuries have bounced off of oversold conditions and as the stock market tumbles, treasuries will perform well until the time that the dollar really begins to crash. When that happens, treasuries will begin to collapse.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(ABX) January 2017 CALLS
(FNV) January 2017 CALLS
(RGLD) January 2017 CALLS
(SPY) December 2016 PUTS
(IYF) August 2016 PUTS
Is This The End Of The U.S Dollar? Geopolitical Moves "Obliterate U.S Petrodollar Hegemony"