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Financial news and economic items of interest
Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?
Japan’s Finacial Services Agency (FSA) announced last Friday that they are endorsing 11 different cryptocurrency exchanges. This sets Japan on a path to becoming the headquarters for everything Bitcoin, especially since China recently crippled their crypto market by banning exchanges. This means Japan now represents one of the most cryptocurrency-friendly countries in Asia. – Bitcoin NewsHong Kong:
Initial coin offerings are the most talked about, if not the most popular, form of fundraising for cryptocurrency projects around the world – and Hong Kong is starting to get in on the action. In fact, evangelists for cryptocurrencies see ICOs as a way for Hong Kong to regain its place at the forefront of the Asian, and even the global, financial services industry. – South China Morning PostOne nation and market seeks to dominate cryptocurrency trading while the other is working towards dominating the ICO markets. And together they may soon come to be the epicenter of the cryptocurrency industry, especially as more and more governments seek to impose or enforce strong regulations on them.
In the year-to-date the gold price performance has matched the S&P 500, climbing over 12%.
Gold's matching of the S&P 500 is particularly impressive when you consider the record-breaking performance of the benchmark stock market index in the last year. Yesterday it advanced 0.1% to 2510.06, a new all time record high price.
It is also impressive considering sentiment towards stocks is shall we say "irrationally exuberant", while sentiment towards gold remains muted despite gold eking out gains in 2016 and now again in 2017.
The precious metal has performed well predominantly due to rising uncertainties regarding North Korea, Trump and the political mess in the U.S. and other geopolitical tensions.
Its strong performance is despite noise from the US Federal Reserve regarding its alleged plans to tighten money supply and increase rates. Other major central banks have also provided similar indications. – Gold Core via Silver Doctors
Goldmoney Inc. (TSX:XAU) (“Goldmoney”) (the “Company”), a precious metal financial service and technology company, today unveiled the addition of vaulted Bitcoin and Ethereum as secure and fully-reserved offline investable assets within the Goldmoney® Holding, a major enhancement that allows qualified clients to buy, sell, and exchange cryptocurrencies with nine global currencies as well as gold, silver, platinum and palladium bullion. With today’s launch, Goldmoney becomes the world’s first publicly traded and regulated financial service to offer insurable, auditable, and Anti-Money Laundering (“AML”) compliant exposure to cryptocurrencies.
For over 15 years, Goldmoney has been the market leader and original innovator providing direct online access to securely vaulted and insured precious metals. As the market for blockchain assets continues to grow, Goldmoney clients have approached the Company seeking ultra-secure and financially transparent solution for custody of blockchain assets, where an institutional-quality solution still does not exist in the digital asset marketplace. As a result of many months of engineering and product development to meet client demand, the Company is pleased to offer the following services and innovations for eligible Goldmoney Holding owners:
- Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
- Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
- Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions. - Globe News Wire
The Renminbi held its spot as the world's fifth most active payments currency in August, according to SWIFT's RMB tracker. The news came just one day after SWIFT said it will start displaying China's Cross Border Interbank Payment System's (CIPS) data on its system. - Global CapitalSince the rise of the BRICS coalition, and the fact that China is now the largest financial center in the world along with being the world's second largest economy, it is surprising that SWIFT took this long to begin tracking the RMB as a primary currency used in global payments. And the use of the Yuan is in this capacity is only expected to increase as they continue forging new bi-lateral trade agreements, and through their planned creation of a Yuan denominated oil contract.
Washington found itself on the sharp hooks of a dilemma…
Dramatically raise the price of gold to limit redemptions — and devalue the dollar in the process — or repudiate its commitments under Bretton Woods.
Dishonor, that is… or dishonor.
It chose dishonor.
Price again:
To continue under the Bretton Woods monetary system would have meant that the U.S. would have been forced to raise the price of gold to an enormous figure in order to reduce the amount of gold payable to the Saudis to a tolerable level. But raising the dollar price of gold in that manner would have constituted a great devaluation of the dollar and collapsed its international prestige; that in turn would have ended the predominance of the U.S. as the No. 1 power in the world. The U.S. was not willing to accept that outcome. So Nixon “closed the gold window” on Aug. 15, 1971.
If China is willing to trade gold for oil under its latest plan, a similar dynamic enters play.
Consider:
China takes aboard some 8 million barrels of oil a day.
That’s 2.92 billion barrels per year — nearly 3 billion in all.
But China holds only a few thousand metric tons of gold (officially about 1,850. Some estimate the true figure much higher).
You see the problem, of course.
China rapidly depletes its gold reserves if too many oil exporters choose to exchange yuan for gold.
If the plan’s to be sustainable at all, gold must rise — drastically — in order to balance the vast amounts of oil it’s supporting.
As Price explains, “To balance the mass of oil received by China against a limited amount of available gold… it will be necessary for gold to skyrocket upward in yuan terms and, necessarily, in dollar terms as well.”
Price crunched the numbers…
One ounce of gold (about $1,300) currently fetches 26 barrels of oil (about $50 per).
One barrel of oil is worth 1.196 grams of gold.
Price calls this ratio “an unsustainably low purchasing power of gold vis-a-vis oil.”
Only a drastically higher gold price would render the plan plausible.
How far would gold have to climb before the relationship was stable in Price’s estimate?
Ten times. Thus, Price arrives at a reasonable gold price:
$13,000 per ounce. – Daily Reckoning via Silver Doctors
A new investment platform and manufacturing projects will be announced during the visit to Russia by the King of Saudi Arabia, said the Director-General of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev.
King Salman bin Abdulaziz Al Saud is expected in Moscow early next month and will be the first Saudi monarch to visit Russia in almost a hundred years since the two countries established relations.
"The largest joint achievement of Russia and Saudi Arabia, which together provide about a quarter of world oil production, was the conclusion of an unprecedented agreement by OPEC +, which allowed to stabilize the world market," Dmitriev said as cited by TASS.
He added significant results have been achieved regarding investment cooperation since the setup of a joint $10 billion platform by the RDIF and the Saudi Kingdom’s Public Investment Fund (PIF). - Russia Today
As the NFL's feud with President Trump continues to dominate headlines, a feud which has effectively turned ESPN into a politically-themed talk show, the league has decided to recruit additional talent to "provide crisis communications counsel to leagues executives." Per a job listing posted to Daybook, the NFL says they're looking for a "Senior Communications Strategist" to be based out of New York City who can assist with "crisis communications" and "devise a strategy and long term vision to strategically position the NFL in the sports marketplace." Here are some highlights:
Responsibilities:
The senior communications strategist will be responsible for proactively developing plans and strategies aimed at publicly positioning the NFL to key audiences through all communication channels, both traditional and emerging media. They will work closely with communications department leadership to create messaging to reflect the league's wide variety of priorities and expedite organizational decision-making.
Additionally, the strategist will:
- Provide crisis communications counsel to leagues executives.
- Devise strategy and long term vision to strategically position the NFL in the sports marketplace.
So, what kind of skills are required for such a position? Well, you'll need to be an "expert" in "storytelling" and you'll need to be "comfortable working in a diverse environment"...so, no Trump-supporting racists allowed, please.
- Provide guidance to senior leadership, including executive vice presidents and COO to achieve desired reputational results and develop metrics to measure success.
Required Education and Experience:
- Bachelor's degree in related field and a minimum of 8+ years of experience in communications or journalism with expertise in storytelling, issue management and long term planning
- Successfully demonstrated ability to lead, participate in, and support cross-departmental activities.
Excellent working knowledge of the PR field including documented experience working in public, fast paced, high-pressure situations. - Zerohedge
- Strong written and verbal communications skills, excellent organizational skills and strong interpersonal skills.
The world may have already produced the most gold in a year it ever will, according to the chairman of the World Gold Council.
Production is likely to plateau at best, before slowly declining as demand rises, especially given global political risks and robust purchases by consumers in India and China, Randall Oliphant said in an interview Monday.
“It’s not clear how the whole US political system will play out,” said Oliphant, an industry veteran who’s been an executive at some of the world’s biggest gold miners. “All this uncertainty seems very fertile ground for people to get into gold.”
Prices could climb to as high as $1,400 an ounce in the next 12 months, and top record highs in the “medium term,” Oliphant said at the Denver Gold Forum, the 28th annual gathering of mining executives, hedge funds, bankers and analysts that attracted about 1,100 attendees. - India Times
Stories of hyperinflation in various countries have been mounting in recent days. As citizens face the reality that their country has devalued its currency, they are forced to take backpacks of cash to buy a loaf of bread.
Within these devalued currency environments, other forms of money--stable ones--are welcomed. Zimbabwe is one such nation. There, hyperinflation reached a critical point in 2008, and is threatening again. The country appears to be headed toward another bout of hyperinflation and citizens are turning to dollars and Bitcoin.
The use of Bitcoin in Zimbabwe has grown exponentially as the government has begun to stop all credit card payments and has restricted the flow of cash into and out of the country. People wishing to make payments for vehicles have been forced to use Bitcoin and car lenders are happy to accept.
In all the chaos, the price of Bitcoin on the local exchange, BitcoinFundi, has soared to $7,200. This premium reflects a frantic desire to find ways to transact within an economy where government controls have made traditional means impossible. – Coin Telegraph
North Korea’s cyber-brigades have hacked into South Korean bitcoin exchanges both to steal customer bitcoins and demand bitcoin ransom to cease the attacks. North Korea is building up a bitcoin stash to pay for weapons and food as the U.S. ramps up sanctions on conventional banking channels.
This operation reflects the fact that using bitcoin on the dark web is a haven for criminals, arms dealers, tax evaders and state enemies of the U.S. How long will it be before the U.S. joins the effort to shut down, interdict and disrupt bitcoin message traffic on the dark web and the bitcoin exchanges themselves? – Daily ReckongingNorth Korea, even more than either China or Russia, has become President Trump's main focus in foreign affairs, and the President and his administration have even gone so far as to threaten sanctions against anyone who does business with North Korea. Thus if North Korea is attempting to use Bitcoin to skirt American and United Nations sanctions, then we should perhaps ask Saddam Hussein just how far Washington is willing to go to protect their foreign policy agendas.
According to a report by CNN Money, the U.S. Commodity Futures Trading Commission (CFTC) announced this week that it would file suit against a man and his New York-based company over an alleged Ponzi scheme involving bitcoin. This marks a historic (or perhaps notorious) first: the first time that the U.S. government has filed a fraud suit involving bitcoin, the world's leading cryptocurrency. The individual in question is Nicholas Gelfman of Brooklyn, New York, and the related company is a fund called Gelfman Blueprint, Inc. According to the CFTC, the fund "fraudulently solicited more than $600,000 from approximately 80 persons."
Classic Ponzi Strategy
Per the allegations in the suit, the CFTC has suggested that Gelfman, who has been CEO and head trader for the fund, told investors that his firm "employed a high-frequency, algorithmic trading strategy." At the same time, however, the strategy itself was "fake," according to the filing. "The purported performance reports were false, and -- as in all Ponzi schemes -- payouts of supposed profits...actually consisted of other customers' misappropriated funds," the CFTC reported in a statement. The suit further alleges that Gelfman attempted to stage a computer hack as a means of concealing the scheme. - Investopedia
Russia's lower house of the Federal Assembly, the State Duma, is expected to put forward a bill in October regulating the trade of cryptocurrencies. At the moment, bitcoin and other digital money are neither permitted nor prohibited.
"When will the bill be ready? I think it will have been prepared in October, and then we will discuss it before adopting (into law)," a Chairman of the State Duma Committee on Financial Markets Anatoly Aksakov told TASS news agency.
Aksakov has proposed to start a pilot program of bitcoin trading on Russian exchanges. He suggests such settlements make it possible to bypass sanctions for those who want to invest in Russian projects, including in the Crimea.
Russian Finance Minister Anton Siluanov earlier said that a bill regulating cryptocurrencies in Russia would be ready by the end of the year.
In August, Deputy Finance Minister Aleksey Moiseev pointed out that the government wants to protect the public from bitcoin trading, as it is extremely volatile and resembles a pyramid. – Russia Today
Darico is an exciting new concept quickly coming to life. The Switzerland based project is working towards becoming the first digital currency to combine the benefits of bitcoin's growth potential, security and peace of mind offered by gold into a single cryptocurrency. The team, currently in the process of creating an entire "Investment ecosystem" is soon going to launch a crowdsale, offering an opportunity for people to become part of the new financial revolution.
The cryptocurrency Darico stands for "Decentralized, Asset-backed, Return-focused, Investment-grade Coin". The cryptocurrency is backed by a unique combination of assets to potentially eliminate the volatility, otherwise associated with individual digital currencies like bitcoin and others. By doing so, the virtual currency not only ensures the best interests of the coin holders, but also attracts more people to adopt Darico, and in turn digital currencies.
The multi-asset backed Darico is backed by a combination of gold and bitcoin, alongside Ether which further diversifies the reserves. Bitcoin and Gold reserves make up to 55% and 35% respectively. Bitcoin's assured growth in value over time is combined with the rock-solid price stability exhibited by gold. A small percentage of Ether reserves ensures that Darico is future-proofed, thanks to the growth potential of Ethereum protocol as it gains wide-spread adoption in the decentralized blockchain solutions segment. – Business Insider
All year long, if the gold price has stayed above the 50-day moving average (end of January and again in early August), price has recovered. But, and it’s a big but, if the gold price falls below the 50-day, we have gone lower before recovering in price.
Of course, we could totally blow that call, but here’s a close up of the 50-day to see just how critical that blue line is:
The gold cartel sees this exact same line, and they know what the significance of it is. In the short term, a break down in price would be more of the same old frustrating stuff, but, it is good news for us as this is a line in the sand for the cartel, and they don’t really know if they want to cross it. - Silver Doctors
Eric King: “James, I wanted to talk about the BIS (Bank for International Settlements) mobilizing all of that gold. As you know, the bullion banks, who act as agents for Western governments, were heavily shorting the gold market. And you were saying there were large backwardations in gold and silver, Maguire was talking about how they were getting overrun in the physical market. And then all the sudden the BIS mobilized all of that gold and the smash in the gold and silver markets began. Can you talk about that?”
James Turk: “Yes, we’ve seen this so many times, Eric, that you almost have to expect it. When there is panic behind the scenes by the bullion banks and the governments that are trying to cap the gold price, they go to the vault and they pull out some bars that haven’t seen the light of day for probably decades and then ship them over to Asia. And this just happened again…
James Turk continues: “In fact, what the BIS mobilized was a record amount of physical gold (for the BIS). And that’s an indication of what we are seeing. The physical demand for gold and also for silver has just been huge. It (physical gold and silver) is getting vacuumed up by entities who are moving out of dollars, the stock market, and other assets, into something safe.” – King World News
The battle lines have been drawn between sovereign governments and the legitimacy of cryptocurrencies, warned anti virus software pioneer John McAfee during the first global blockchain technology event in Hong Kong since China imposed a ban on cryptocurrency sales and trading on exchanges earlier this month.
Among core issues in the US$150 billion industry are how nations can apply taxation to cryptocurrency transactions and whether there should be curbs on the ability for bitcoin and other virtual currencies to facilitate global fund flows.
“Today will go down in history as the beginning of the war between the proponents of cryptocurrency and the world governments,” McAfee told the South China Morning Post of the growing conflict between governments and the “fugitives” subculture who back the development of virtual currencies.
What’s more, bitcoin’s status varies in different jurisdictions. Australia said it would remove the double taxation on transactions involving cryptocurrencies like bitcoin, while China has yet to define the legal status of virtual currencies.
“If governments aren’t able to know what the movement is they will be unable to collect revenues. That’s going to cause panic in some countries. China sees it already,” McAfee said. – South China Morning Post
The irony of course with McAfee's view here is that he is a extremely strong proponent of Bitcoin and cryptocurrencies, but as a corporate CEO he has the pragmatism to realize that governments will not stand idly by should de-centralized currencies threaten their authority and hegemony.
"Right now these crypto things are kind of a novelty. People think they're kind of neat. But the bigger they get, the more governments are going to close them down," Dimon said during an interview with CNBC-TV18 in New Delhi, India, on Friday.
Dimon was concerned that with bitcoin, ethereum and various Initial Coin Offerings (ICOs), there are now cryptocurrencies everywhere.
"It's creating something out of nothing that to me is worth nothing," he said. "It will end badly."
Dimon warned that governments will eventually crack down on cryptocurrencies and will attempt to control it by threatening anyone who buys or sells bitcoin with imprisonment, which would force digital currencies into becoming a black market. - CNBC
The Chinese have announced that they have perfected a scheme, to be launched formally in the market by the end of the year, by means of which exporters of oil to China will accept the Chinese currency, the Yuan, in payment for the oil; for this deal, the Chinese have added an incentive: the Yuan received by the oil exporters will be exchangeable for gold. This gold will be “sourced” i.e. “purchased” outside of China, for the oil exporters.
Thus, the oil exporters’ Yuan will be offered in payment to the so-called “Bullion Banks” in London, who will provide the gold in exchange for Yuan.
What follows is my understanding of the situation:
The Bullion Banks are the financial entities that control the price of gold by selling futures contracts, i.e. “paper gold”, that promise to provide gold at a certain price, to speculators who buy the contracts, and who only wish to make a profit in Dollars on their bets that the price of gold will rise, and do not intend to take delivery of physical gold.
Sometimes the speculators win some Dollars, but the vast majority are perpetual losers, because the Bullion Banks can move the price down at any moment and clear out the speculators who were “long” gold. This game has been going on for years and years.
I suppose that the Bullion Banks are not going to want to accept Yuan, in exchange for the delivery of physical gold. They will first convert their Yuan into Dollars, and the only likely provider of Dollars will have to be the Bank of China, and which, by the way, in any case desires to reduce its Dollar holdings. Thus the Bullion Banks will offer Dollars for gold.
This operation kills two birds with one stone: the oil exporters get their gold from London and China reduces its dollar holdings, which they wish to do.
As I see it, here is where the fun begins.
First, the amount of gold which the Bullion Banks can provide will put a very unusual strain upon them. The Bullion Banks are accustomed to control de price of “paper gold” in such a way that they make it extremely difficult for the holders of “paper gold” contracts to obtain delivery of physical gold.
Secondly, the amount of oil that goes to China is enormous; China is the largest importer of oil in the world, eight million barrels a day. Saudi Arabia sells about one million barrels a day to China, for Dollars. If only Saudi Arabia decides to take Yuan and gold for those Yuan, we are talking about one million times $50 Dollars per barrel = $50 million Dollars a day; at $1315 Dollars per ounce, that comes to 38,023 ounces of gold – 1.183 tons – which Saudi would take off the gold market every day. Millions of barrels of oil will have to balance in value against a very limited amount of gold available.1.183 tons a day means the Saudi will be taking 431.8 tons of gold off the market every year, and they are not the only oil exporters that China is wooing; other oil exporters accepting Yuan payment for conversion into gold, might very easily increase the departure from London of 1,000 tons or more of physical gold, every year, whose destination will be Hong Kong or Shanghai, in addition to the gold London has been providing normally.
Inevitably, the very first operation carried out under the Chinese scheme will produce a noticeable rise in the price of gold. When the Yuan belonging to the oil exporters is offered to the Bullion Banks in London, they will convert the Yuan into Dollars, and their bid for gold will have to rise immediately, and with it, the Yuan price of gold at the prevailing exchange rate.
A higher and rising Yuan and Dollar price of gold, means a smaller and diminishing quantity of gold is exchanged for the oil provided by the oil exporters.
As the oil exporters see that they get less gold for their oil every day, they will all hasten to sell their oil before they get even less gold for their oil. The oil exporters in doubt about this deal, will all pile in to sell oil for Yuan and get gold.
To balance the mass of oil received by China, against a limited amount of available gold in London, it will be necessary for gold to skyrocket upward in Yuan terms, and necessarily, in Dollar terms as well.
In effect, the Yuan will suffer a tremendous devaluation against gold, and so will the Dollar. I cannot imagine at what price the gold/oil trade will finally stabilize, but I think it will have to be at many thousands of dollars per ounce. – Plata.com.mx
While major international events, like nuclear tests carried out by North Korea, affect gold prices and result in a situation when investors prefer to invest their money in the noble metal, economic expert Dimitri Speck believes that there are other, more important factors that play a crucial role in influencing the global financial market.
Gold prices have been subject to constant manipulations since 1993, German expert on the gold market Dimitri Speck told Sputnik Germany.
According to him, the manipulation of gold prices has been presented by the media as if it has been initiated by a couple of malicious traders just recently, but this idea is wrong.
"When the gold price manipulation started on August 5, 1993, these were central banks that initiated the process, and namely the then head of the US Central Bank Alan Greenspan. He did not want to let the gold price rise over $400," Speck said, adding that Greenspan feared that a significant increase in gold prices might affect the "inflation thermometer."
The expert noted that the US Fed had arranged an agreement among the central banks to keep the gold price below $400 dollars. This was done for several years by means of sales and loans.
Drivers of Gold Price Manipulation
Central banks, which often belong to the state, do not act alone, but work closely with private banking and financial institutions, Speck continued.
"With the help of price shocks, they [the institutions] shortly knock the prices down to drive other buyers out of the market. The state is the first to get benefit from all this, and this primarily concerns the United States. Well, and the dollar. These are the main beneficiaries of the gold price manipulation. Because the US dollar, as the main world currency, looks good in this case," the analyst noted.
Explaining how the manipulation process actually takes place, Speck noted that this happens "very simply," namely by "damaging other competitors."
In this case, gold is the main rival to currencies based on loans, such as the US dollar and the euro.
"The positive development of the price of gold as such exacerbates the debt and other economic deficits of the United States," he stated. - Sputnik News
Over the years Paul Volker has made it no secret that the Federal Reserve has assumed a policy in which it seeks to control the price of gold. From his memoirs, excerpted by “The Nikkei Weekly” in reference to the dollar revaluation of the dollar by the U.S. Treasury on February 12, 1973 (Volker was the Treasury’s undersecretary for international monetary affairs at the time) November 2004:
That day the United States announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake. – source link
And then there is the story Jamie Dimon of JP Morgan will sack any of his bankers who own them. (Hah.. we’ve heard them bragging in the pub about how much they’ve made from holding Bitcoin.) - Bill Blain, Mint PartnersThen there is the argument being made by Bitcoin evangelists that cryptocurrencies are the 'new gold', and are taking over the purpose that gold has had regarding wealth protection for the past 5000 years. But this premise is quickly refuted by the fact that Bitcoin's volatility is so great that one can gain or lose upwards of 20% of their wealth in a single day, which is no different that what citizens of Zimbabwe experienced in their stock markets two decades ago during their country's hyper-inflationary period.
Today, on the 20th of September, GoldMint is launching its ICO. The GoldMint ICO will mark the birth of a new means of exchange for physical gold, with transactions leveraged over the blockchain based platform. This platform will utilize the private and individual gold trading market and potentially the management of larger physical stocks such as those in central banks. It will also provide an electronic payment solution backed by physical gold and a system for gold-backed peer-to-peer lending.
GoldMint is celebrating the beginning of its ICO by attending 3 major events on the same day the crowdsale kicks off. One of these events is BlockchainLive in London – Europe’s leading Blockchain conference bringing together over 75+ global experts in various fields.
Another one is Moscow’s ICO Event which this time mainly focuses on how legislation will impact the cryptocurrency space.
Today GoldMint is also present at the Global Blockchain Summit in Hong Kong gathering iconic speakers from various industries to discuss about the real-world applications of blockchain technology, as well as its potential benefits, risks, and regulatory concerns. - Coin SpeakerAs the world begins to de-dollarize, and China gets ready to implement a new oil contract convertible to gold, it appears more and more that gold will see a return to the monetary system in some form of fashion. And when you add in the rise of the blockchain and cryptocurrenies to the mix, melding gold and cryptos is the most economical way to get the best of both worlds and be able to move onto the cutting edge of what is very likely to become the future financial system.
I wanted dig into the BIS financials and add some evidence from the GATA consultant’s assertions because, since 2009, there has been a curious inverse correlation between the amount of outstanding gold swaps held by the BIS and the price of gold (as the amount of swaps increase, the price of gold declines). You’ll note that in the 2009 BIS Annual Report, there is no reference to gold swaps so we must assume the amount outstanding was zero. By 2011 the amount was 409 tonnes.
The gold swaps enable the BIS to “release” physical gold into the banking system which can then be used to help the Central Banks manipulate the price of gold lower. This explains the jump in BIS gold swaps between March 2016 and March 2017 and the drop in the price of gold from August 2016 until early July 2017. It also explains the rise in the price of gold between July and September this year, which correlates with a decline in the outstanding gold swaps between April and July . Finally, the hit on gold that began earlier this month coincides with a sudden jump in BIS gold swaps in the month of August. (Note: there would be a short time-lag between the gold swap operation and the amount of time it takes to “mobilize” the physical gold)
As you can see, the total amount of the gold loans outstanding increased by 14.1 billion SDRs (note: the BIS expresses its financials in SDRs). The accompanying note explains that most of this gold loan is comprised of an increase in the BIS’ gold swap contracts outstanding.
Furthermore, it appears as if the BIS gold swap activity continued to increase between March 2017 and August 2017, as the BIS’s August Account Statement shows another 2.2 billion SDR increase in amount of outstanding gold loans (a BIS monthly account statement only reports the balance sheet with no accompanying disclosure). These loans primarily are swaps, per the disclosure in the 2017 Annual Report.
In my view, there is a direct correlation between this sudden leap in the amount of gold swaps conducted by the BIS between July and August and the price attack on gold that began two weeks ago. The gold swaps provide bullion bar “liquidity” to the bullion banks who can use them to deliver into the rising demand for deliveries from India, China, Turkey, et al. This in turn relieves the strength and size of “bid” on the LBMA for physical gold which in turn makes it easier for the same bullion banks to attack the price of gold on the Comex using paper gold. This explains the current manipulated take-down in the price of gold despite the rising seasonal demand from India and China. - Silver Doctors
The country is studying the “market rules and mechanisms of pricing commodities in yuan [to] satisfy demand from domestic and overseas investors,” Pan Hongsheng, deputy secretary general of the People’s Bank of China’s monetary policy committee, was quoted as saying by the official China Securities Journal.
Pan’s comments, made on Monday at an international oil and gas conference in Hangzhou, capital of eastern China’s Zhejiang province, came as China is about to launch a yuan-denominated crude oil futures contract in Shanghai that has been almost seven years in the planning.
Having more commodities priced in yuan would be beneficial for China not only in terms of giving it more pricing power, but also as it seeks to build an effective foreign exchange mechanism for the currency, according to a local analyst.
“Such a move would diversify trading entities and increase yuan products to pave the way for a more market-oriented exchange rate mechanism,” Zhang Jun, chief economist at Morgan Stanley Huaxin Securities in Shanghai, said.
“It would help domestic firms to manage forex risks and would also boost the internationalisation of the yuan.” – South China Morning Post
Russian President Vladimir Putin has instructed the government to approve legislation making the ruble the main currency of exchange at all Russian seaports by next year, according to the Kremlin website.
To protect the interests of stevedoring companies with foreign currency obligations, the government was instructed to set a transition period before switching to ruble settlements.
According to the head of Russian antitrust watchdog FAS Igor Artemyev, many services in Russian seaports are still priced in US dollars, even though such ports are state-owned.
The proposal to switch port tariffs to rubles was first proposed by the president a year and a half ago. The idea was not embraced by large transport companies, which would like to keep revenues in dollars and other foreign currencies because of fluctuations in the ruble.
Artemyev said the decision will force foreigners to buy Russian currency, which is good for the ruble. – Russia Today
As news continues to come in from the nation of India following the government's order to eliminate certain currency notes from their monetary system, the rush to both trade in, and move money out of banks has been the singular thought for hundreds of millions of people.
And as part of this monetary transfer has been the massive demand for gold, especially since Modi pushed for a suspension of imports of the yellow metal last week. And according to many sources, the price of gold in dollars has now reached over $3600 per ounce as the people move to get rid of their rupees and into the one tangible asset that weathers all crises. – The Daily EconomistYet before Modi saw fit to demonitize a large portion of the nation's currency, his administration had also embarked on a scheme to try to con the Indian people out of their gold by offering to 'lease' it from them using an interest bearing vehicle denominated in you guessed it...
All-out efforts are being made to revive the Gold Monetisation scheme, which failed to take off since its launch two years ago.
The aim of this scheme was to mobilise “idle gold” with households, estimated by the World Gold Council at 25,000 tonnes or almost half the value of this country’s gross domestic product. However, the scheme has not even attracted 10 tonnes since the launch in November 2015. Even this has mostly been from temples, not homes.
Suggestions on how to revive it are being discussed by a panel formed by the Niti Aayog. These include involving jewellers as collection centres, addressing of issues that banks have been facing and using domestically available gold for giving metal loans to jewellers for domestic sales. – Business Standard
Cryptocurrency trading volume reached a new milestone on Friday, crossing $11 billion for the first time amid regulatory uncertainty in China.
According to data obtained from CoinMarketCap, the combined 24-hour trading volume of all cryptocurrencies rose to $11.5 billion shortly after 16:00 UTC. The only other time daily trading volume has surpassed $10 billion was on August 19, when it briefly spiked to $10.5 billion.
Bitcoin topped the charts with $4.2 billion in volume, while ethereum and litecoin posted $1.9 billion and $1.5 billion, respectively. In all, 10 different currencies posted volume greater than $100 million. – Crypto Coins News
The U.S., as is custom when the petrodollar system is threatened, wasted little time responding to Venezuela’s decision to forsake the dollar in its oil transactions.
The same day that Venezuela’s decision to drop the dollar was announced, U.S. President Donald Trump announced that he will host his counterparts from Peru, Colombia and Brazil on Monday to discuss Venezuela. The U.S. is set to lead military drills with the three countries in close proximity to Venezuela in November of this year.
In addition, Venezuela’s decision to drop the dollar was immediately followed by Trump’s signing of an annual determination of countries considered to be “major drug transit or major drug producing” areas. Venezuela was singled out and “blacklisted” in the document for failing to adhere to counternarcotics obligations. – Mint Press News