Loading ...April 19th Mark your Calendar
Lots of chatter that China, on April 19th, will start setting the price of Gold in Yuan out of the Shanghai Physical Only Exchange.
“To date, 10 Chinese banks have announced that they will participate in the benchmark Fix at the SGE but no Western banks have indicated that they will participate. In response to this reluctance, China has threatened that if Western banks do not participate they will loose access to the Chinese gold market (http://www.cnbc.com/2016/01/05/reuters-america-foreign-banks-in-china-could-face-curbs-if-they-snub-gold-benchmark.html).
This lack of Western bullion bank interest in the new SGE Gold Fix is understandable as it would create a conundrum that a participating bank would have to explain if there were two materially different spot gold prices posted daily that could not be arbitraged away: one price for spot gold on the SGE for physical gold and a second price for spot ‘gold’ in London based upon trading paper. The market will then progressively degenerate into a much higher global price for gold as the LBMA is pushed to the sidelines.”
http://www.thedailyeconomist.com/2016/02/got-karatbars-rumors-emerge-that-china.html
http://www.safehaven.com/article/41072/moving-to-the-post-lbma-era-gold-price-reset-watch-out
the world appears to be moving towards two parallel financial and banking systems:
1. China and Asia
2. The West (EU and US)
The first may potentially have a gold backed monetary system, and physical market based pricing for gold
The second will remain based on the USD fiat currency and paper gold contracts
This is part of the macro long term move of the financial power and centre to China and Asia, from the West
The Western empires are in decline, and in the long term the next third world countries, if not already there, in some parts of the USA. The American people cannot see it, but every time I visit, I see further evidence of macro deterioration.