China's Demand for Gold Has Trapped The West's Central Banks

[Peter Presland]

This audio, sourced from Chris Martenson in the form of an 'off-the-cuff' conversation between him and Aladair Macleod is the best explanation and analysis of the state of the physical gold market that I have come across in a long time.

No matter if you are not into gold because it is about rather more than gold. It explains the cleft stick that western central banks find themselves in, with authoritative, crystal clarity. It's a long listen and the start does take a bit of getting past but, stick with it. From 3 minutes on you'll be hooked - and by the end, shocked.

[Lauren Johnson]

Riffing off of the famous line from Jaws, I'm going to need a bigger brain, AND listen to it again.

Peter, if Germany can't get their physical gold from the US, how can China keep accumulating it? I know, listen to it again. And how did the US get so short on gold?

[Paul Rigby]

This audio, sourced from Chris Martenson in the form of an 'off-the-cuff' conversation between him and Aladair Macleod is the best explanation and analysis of the state of the physical gold market that I have come across in a long time.

No matter if you are not into gold because it is about rather more than gold. It explains the cleft stick that western central banks find themselves in, with authoritative, crystal clarity. It's a long listen and the start does take a bit of getting past but, stick with it. From 3 minutes on you'll be hooked - and by the end, shocked.

Thanks for posting, Peter, this was fascinating. I wonder if China's effective cornering of the gold market is why we are seeing so much of Jim Rickards, a consultant to the Pentagon and the CIA, of late?

http://jimrickards.blogspot.co.uk/

In Currency Wars, my first book, the first two chapters talk about a financial war game conducted by the Pentagon at a top secret weapons laboratory outside of Washington D.C. and a lot of readers really enjoyed that chapter. But what we did in that war game, and I was one of the planners and facilitators and I got to participate in the war game.

With some friends, we cooked up a plan whereby Russia and China would pool their gold in a UK bank with a Swiss vault and issue a new currency backed by gold and say "Henceforth, any Russian energy exports or Chinese manufactured goods exports could only be paid for in the new currency. And if you wanted some, you had to deposit your gold and the bank would give you some of the currency."

In other words, it was a way to turn your back on the dollar and dethrone the dollar as the global reserve currency. So that was something we did in 2009 and frankly, some of the other people there, some of the Harvard types, we were ridiculed and people said, "That's ridiculous…"

[Peter Presland]

Riffing off of the famous line from Jaws, I'm going to need a bigger brain, AND listen to it again.

Peter, if Germany can't get their physical gold from the US, how can China keep accumulating it? I know, listen to it again. And how did the US get so short on gold?

It does repay listening to again carefully - and yes, it does answer the above questions.

Short answer to why Germany can't have it's gold back: It's all been leased to bullion banks and others who have sold it as good members-in-standing of a 30+ year gold price suppression program. Where has it gone (the physical stuff)? - China, India and points East.

Paper promises are pretty much all that's left - a bit of an exaggeration maybe but (barring the wild-card of 'black-gold' on which DG is something of an expert) the Fed and the major bullion banks certainly have vastly greater physical gold obligations than physical gold in their vaults to meet them.

Why go to such lengths to keep the price down? to maintain the notional value of fiat currency

Here's a hilarious satire on the German gold repatriation debacle

Bottom line: The Fed may still effectively control the Dollar markets, but China seems to have more or less cornered the physical gold market and the implications of that are vast.

[Peter Presland]

Thanks for posting, Peter, this was fascinating. I wonder if China's effective cornering of the gold market is why we are seeing so much of Jim Rickards, a consultant to the Pentagon and the CIA, of late?

http://jimrickards.blogspot.co.uk/

.....we cooked up a plan whereby Russia and China would pool their gold in a UK bank with a Swiss vault and issue a new currency backed by gold and say "Henceforth, any Russian energy exports or Chinese manufactured goods exports could only be paid for in the new currency. And if you wanted some, you had to deposit your gold and the bank would give you some of the currency."

In other words, it was a way to turn your back on the dollar and dethrone the dollar as the global reserve currency. So that was something we did in 2009 and frankly, some of the other people there, some of the Harvard types, we were ridiculed and people said, "That's ridiculous…"

I'm less up-to-speed on gold than I used to be but I have no doubt that control of the physical market if that is what the Chinese have effectively accomplished, will have major adverse implications for the Dollar.

The thing in that quote that jarred with me though - and I mean seriously jarred - was the idea that Russia and China would use a UK bank as physical custodian of gold bullion. Let them shuffle paper-promises and take their cut by all means (per the recent London and Frankfurt Yuan trading announcements), but the idea they would trust ANY western bank with the physical stuff is quite simply absurd IMO. Some scenario IOW, so what's the guy's game I wonder?

[Paul Rigby]

The thing in that quote that jarred with me though - and I mean seriously jarred - was the idea that Russia and China would use a UK bank as physical custodian of gold bullion. Let them shuffle paper-promises and take their cut by all means (per the recent London and Frankfurt Yuan trading announcements), but the idea they would trust ANY western bank with the physical stuff is quite simply absurd IMO. Some scenario IOW, so what's the guy's game I wonder?

In other words, all the China-cornering-the-gold-market is just so much smoke to obscure an attempt by the core US establishment to further global governance by downing the dollar, and replacing it not with the Yuan, but rather, what, SDRs?