On June 12, a financial analyst and former head trader at the Royal Bank of Scotland issued a communique regarding the ongoing turmoil for gold and gold prices, and in particular, China’s current gambit to dominate and accumulate the remaining supplies of the precious metal. Known in the public sphere under the pseudonym of ‘V’, and labeling himself the Guerrilla Economist, this high level insider stated that China is now moving to corner the gold markets, using a number of programs which include direct purchasing from mining operations, and the creation of holding companies to transfer dollar denominated assets for physical gold.
China for instance in the last decade has set up various Sovereign Wealth Funds through which they are purchasing vast stores of PM from the Bullion Banks themselves. The Main monster in this den of Dragons is the Sovereign Wealth Fund CIC (China Investment Corp) an almost half a trillion dollar monster whose sole purpose was to consume worthless US dollars, and use them to buy valuable assets.
After much careful digging it seem that the Chinese are heading the train off at the pass and purchasing Gold Ingots at point of manufacture paying more than what a refiner would pay. Once again adding a quiver to the long list of strategic metals and rare earth mineral mines, China is cornering the market on Gold. – V via Q Alerts, June 12
When the institutional attack on paper gold and silver prices began in the middle of February, gold spot prices were around $1680 per ounce. Over the next two months, gold fell more than $300 to a low of $1360 as weak hands divested themselves of assets in both the futures and ETF markets. However, all this did was accelerate the disconnect between spot and physical prices for the precious metal, and create a worldwide buying spree, with premiums for gold going as high as 40% in some cases.
Even the U.S. Mint added a 40% premium to sales of 1/10 ounce gold coins when it reopened the physical market at the end of May. Of all the potential indicators that would validate the disconnect between paper and physical gold, the actions by the U.S. Mint is one of the strongest.
J.P. Morgan Chase bank works hand in hand with the Comex in storing physical gold and silver for use in futures trading. However, the investment bank is quickly running out of their supply of gold, so much so that the availability of Comex to continue functioning is now in jeopardy. While the focus of financial analysts and traders remains on the paper markets, physical gold is disappearing fast, and being transferred to sovereign states such as China.
There is a major play taking place for control over physical gold, oil, and the expectation of a new global reserve currency. China has positioned itself wisely, using primarily their massive dollar reserves accumulated from years of export dominance over the U.S. to access and purchase physical gold in both the markets, and at the source. And as the Guerrilla Economist V is pointing out from his well sourced information, it is only a matter of time before China completely corners the gold markets, and will have the primary seat at the table in determining the next global currency expected to replace the dying dollar.
You can find more financial updates by the Guerrilla Economist at Steve Quayle’s website under the Q Alerts section, and periodically on the Hagmann and Hagmann Report.