The Monetary Race Between the Federal Reserve Cryptocurrency and a Digital Gold Yuan
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First, let’s talk about gold since gold has fallen out of favor with nearly everyone in the past year due to the continuous price suppression efforts of the US Federal Reserve, the Bank of England, its puppet bullion banks on Wall Street and the complicit regulatory agencies (SEC, CFTC, ESF, etc.) To illustrate how vital gold price suppression is to the imposition of US dollar hegemony around the world, the CFTC recently awarded a whistleblower a staggering $200M as a reward for reporting massive criminal activity at Deutsche Bank in regard to interest rate manipulation, but regulatory agencies and the US justice department continue to aid and abet more egregious banker price manipulation of gold and silver futures prices and to even stymie bankers from going to prison for their crimes.
For example, I’ve written in great detail about criminal gold price manipulator JP Morgan banker John Edmonds for years. Even though Edmonds was originally scheduled to serve prison time in December of 2018, here we are, nearly three years later, and the US Justice Department still has his case listed on their website as “pending” after commuting his sentence numerous times as if he were “untouchable” and certain crimes are unprosecutable. For those that want to point to the near $1B fine JP Morgan received for their criminal racketeering enterprise in smashing gold and silver prices, fines that are a fraction of the wealth gained through illicit activities will never serve as a detractor from future committed crimes. This is why I’ve been calling for minimum prison sentences of at least 10 years with no chance of parole for every single banker found guilty of smashing gold and silver prices lower over the past couple of decades.
As I stated here, anyone that believes that the mortal enemies of sound money are the brand new best friends of cryptocurrencies like BTC and ETH, simply because of their recently issued pro-cryptocurrency statements and due to surface behaviors that appear to be pro-cryptocurrency (like approval of the ProShares BITO ETF), is an extremely gullible person with no knowledge of monetary history. How many in this community are aware that the US Federal Reserve gained support among the public before it was legislated into existence in 1913 through a media campaign that falsely pitched the bank as an institution of “decentralized” power that would protect the interests of American citizens? Often times, bankers undertake actions that appear on the surface level to be of a certain nature while actually being an endeavor of the exact opposite nature in reality. It still remains a little surprising to me that the cryptocurrency community blindly accepts so much of the surface-level banker narrative about cryptocurrency, especially the pro-bitcoin narrative uttered by US banking regulators. Even though I correctly called the top of Bitcoin prices earlier this year (missing the exact top by only a few days) and also correctly called almost the exact bottom of low Bitcoin prices (that compelled my only BTC buy opinion to my patrons, quite correctly, of the entire year), almost no one in the BTC community cares about what I have to say about where BTC prices are heading now. It is still the modus operandus in the bitcoin community to crush and disparage any type of dissent, even extremely logical and reasonable dissent, to all current consensus opinions, even though living within an echo chamber will never birth the wisest decisions.
Because Bitcoin prices have left gold and silver prices in the dust this year, the sentiment and interest surrounding precious metals this year has been extremely low, with even long-time gold bugs abandoning gold this year for bitcoin, an outcome that has pleased Central Bankers to a great degree, as this fits into my theory from the start, that BTC was a Central Banker invention whose purpose it was to divert money away from real sound money. The easiest way for Central Bankers to spring their own cryptocurrencies unexpectedly on nations, especially in the US, is through the execution of a hard fork of Bitcoin. If BTC were a Central Banker Trojan Horse, as I’ve frequently postulated, (and most recently here again), then executing a hard fork of Bitcoin to launch a US Federal Reserve cryptocurrency, should this happen, was very likely their plan since the first BTC traded in January 2009.
Phase One, in which we are currently still embroiled, would have been to sponsor the development of a cryptocurrency to divert investment away from gold and silver while building mass support around the world for a 100% digital currency. Phase Two, which has yet to launch, would be the execution of a hard fork in BTC, on much larger blocks appropriate for global adoption, to launch a US Federal Reserve cryptocurrency. This would be the easiest plan for either the US Federal Reserve or the BOE to unexpectedly launch their own cryptocurrency, accompanied by simultaneous legislation to phase out the original BTC from nations that comprise the largest percentages of the global economy. If BTC were still used in smaller emerging market economies around the world, like El Salvador, US and UK Central Bankers likely would not care as continuing use in tiny nations would not affect their plans to dominate the cryptocurrency world.
There have been more hard forks from BTC than the average BTC investor likely realizes. The two most well-known, of course, are BTC cash and BTC gold, respectively launched in August and October of 2017, but many other less well-known hard forks such as BTC Diamond, Super BTC, BTC Atom, Bitcore, BTC God, BTC Private, and BTC Zeo, to name a few, also transpired during 2017 and 2018. Thus, it is clear that Central Bankers with unlimited resources, could easily execute a hard-fork of BTC to launch their own cryptocurrencies.
How Does China Fit Into this Equation?
On the other side of the world, the actions of China will shape the future of gold and silver prices, but often it is hard to interpret their actions because (1) the Chinese think in terms of not quarters or years, but in decades; and (2) often their partnerships with the usual Western suspects on their gold trading platforms make it difficult to conclude their independence from the shadowy Western banking criminal elements. Thus, their words and actions often conflict, with their words stating a hardline against corruption in their gold futures markets but their actions indicating at times, an opposite stance from their words, through collaboration with the wholly corrupt CME (Chicago Mercantile Exchange) in launching products on the SGE (Shanghai Gold Exchange). When a conflict between words and actions, exist, I always side with actions over words, so believe that there is some partnership of Chinese bankers with Western bankers on the gold issue, rather than none.
Let’s explore the words for now. On 14 October 2021, the SGE released this scathing memo in which they stated that none of the usual gold price suppression schemes executed in New York and London markets will be tolerated in Shanghai, including the usual “spoofing” that occurs in Western gold markets to artificially create price dumps.
“Shanghai Futures Exchange (hereinafter referred to as ‘The Exchange’) has been on continuous efforts in investigating and penalizing violations of relevant rules and regulations, so as to strengthen the risk management of the futures market, regulate the futures trading activities and protect the legitimate rights and interests of futures market participants. The enforcement against such violations in September 2021 are listed as follows:”
“In the aspect of administration of abnormal trading behaviors, the Exchange has dealt with a total of 71 cases, among which 13 cases were self-trades,57 cases were frequent order cancellations (spoofing),1 case was exceeding the limit of placing and cancellation of large-amount orders. The Exchange has separately notified the relevant clients by phone through members,placed 10 clients and 1 group of accounts with actual control relationship on the Exchange’s watchlist, notified 14 abnormal trading behaviors to all the members. The Exchange has suspended 3 clients from opening new positions on the relevant futures contracts and notified to the market.”
“In the aspect of identification and cooperative investigation of accounts with actual control relationship, The Exchange has identified 177 groups of 495 clients that exist the actual control relationship and urged 6 groups of 18 clients to cooperate with the investigation of the actual control relationship. In the aspect of inspecting cases violating trading rules, the Exchange has dealt with 4 cases suspected of violation trading rules, of which 2 cases were suspected of accommodation trade,1 case for existing actual control relationship but have not reported,1 case was price fluctuation caused by market price order. The Exchange reminds the investors to be in compliance with its rules in the trading activities and report accounts with actual control relationship.”
The above statement appears to be in line with cleaning up manipulation of gold prices in gold futures market in preparation to launch a gold yuan. However, as I stated, since 2019, the SGE has collaborated with the CME in launching new gold derivative contracts on the SGE, even conceding allowances for USD priced gold contracts subject not to SGE rules, but to COMEX rules, to trade in Shanghai. If the SGE were serious about stomping out all fraudulent trading on its markets, why let the thief in your house? However, letting the thief into the house may have been simply a concession granted to the West to prevent an outright attack of hostilities by the Western banking cartel, especially after Shanghai launched petroyuan contracts during Q1 2018, an act that significantly eroded the need of nations to hold dollars in order to purchase oil. However, I don’t believe that the SGE’s concession to the CME was a surface level act only for two reasons:
- The divergence between Shanghai and New York gold and silver futures prices would have been much greater than it has been for the duration of the past year if Shanghai had completely stomped out Western fraud in their markets; and
- The release of their 14 October 2021 memo proves that Shanghai is still catching major fraudulent behavior in their markets, of which I would presume that 100% of it is executed by Western banks operating in their markets.
In addition, all of China’s anti-BTC moves executed in recent years, including a ban on BTC mining, ICOs and cryptocurrency exchanges, a ban of bank ownership of BTC, and finally a ban on crypto trading, while they all support the eventual launch of a gold yuan, also all align with an undisclosed working agreement between Western and Chinese bankers. As I already iterated above, even though my speculations about undisclosed agreements between Western and Chinese bankers behind closed doors regarding influence of cryptocurrency and gold prices are just that, speculation, anyone that believes that the openly hostile relationships in these financial arenas are reality are quite possibly the most naïve of naïve on planet Earth. When, in the history of banking, have bankers ever been transparent and aboveboard in their global dealings?
I will keep a close eye on these developments and announcements to analyze if Shanghai demonstrates a continuing tolerance for this continued fraud (which would indicate a closer partnership than appears on the surface between Chinese and Western bankers on matters of gold prices) or if they increasingly become more hostile to such acts of fraud (which would indicate a fracturing relationship between Chinese and Western bankers on matters of gold). For those unfamiliar with the scope and influence of the SGE on gold’s global price, at the end of 2020, the SGE contained 280 members, comprised of 156 ordinary members, including 31 financial members and 125 comprehensive members; 124 special members, including 7 foreign financial members; and 89 international members including brokers, trusts, and small and medium-sized banks.
Furthermore, the seemingly unrelated news of China’s successful hypersonic missile test this month in which China launched a missile that traveled around the world before only missing its intended target by 24 miles, may have been related, believe it or not, to this ongoing struggle over control of gold prices. Perhaps Western military forces have threatened the PBOC with warnings not to permit gold prices to rise too fast in Shanghai markets and China’s response to such a threat was to show the world that their capabilities in long range missiles exceed even the capabilities of the US. China’s hypersonic missile test was described as “astounding progress on hypersonic weapons and was far more advanced than U.S. officials realized.”
Despite this, Pengyu Liu, a Chinese representative for the China embassy in London, stated, “We are not at all interested in having an arms race with other countries,” a statement that accurately reflects China’s strategy of dominating the global economy not through war but through monetary and economic dominance (i.e. through the OBOR initiative) and one that has been iterated multiple times by Chinese President Jinping Xi. Consequently, perhaps the above display could have been military puffery before a decision to break off whatever behind-the-scenes agreements may have been forged earlier in preparation to launch a gold yuan, despite the severe opposition from Fed Reserve and BOE central bankers to such an event. In essence, the display may have been a covert message from the PBOC to the Western banking cartel that they will no longer abide by their wishes, and instead of an arms race, the real race may be between the Feds and the BOE to launch their own cryptocurrencies and the PBOC to launch a gold yuan (backed).
It is self-evident that the future price behavior of gold and silver in futures markets, a continuing divergence in futures prices in Shanghai and the West, and a continuing divergence in paper synthetic prices with physical four nine fine prices is extremely complex, and involves not only spoken partnerships between East and West, but unspoken, publicly undisclosed partnerships, and an undisclosed role of the military industrial complex as well.
With gold, silver and platinum remaining among the most underpriced assets today, especially as these assets have severely lagged in price behind many other commodities like copper, iron ore, coal, oil and fertilizer, the question everyone wants answered is what lies ahead for precious metals prices? Obviously, the bullion banks and the major regulatory agencies in the US have an incentive to keep gold/silver/platinum prices low and bitcoin prices high until the US Central Bank is ready to launch its own cryptocurrency. As I stated in this article, I believe that this event could come much sooner than expected, either in the form of events that I discussed in this podcast, or in the form of events I discussed in this article. And when this happens, this will finally launch an about face in the current fortunes of cryptocurrencies and the misfortunes of precious metals.
Something is definitely brewing very quietly but very strongly underneath the terrible surface level reporting that comprises mass media “journalism”. Earlier this year, People’s Bank of China (China’s central bank) decided to allow domestic and international banks to import significant amounts of gold into the country after carefully controlling the amount of gold imports every month. This policy falls in line with Chinese authorities loosening individual gold ownership restrictions in 2003, when they abolished the law that made private ownership of gold illegal and then ran commercials in the fall of 2009 urging its citizens to buy physical gold and silver. And even though gold and silver have risen nicely since that time when their prices were respectively about $1,000 and $16-$17 a troy ounce, the fact that silver futures prices had dropped back to this same level as recently as Q1 2020 places more pressure on the PBOC to support silver prices more in the coming years.
Though I know, as an Asian myself, that we look at the long game, and think of life in terms of decades and not in terms of annual quarters as is often the case in the West, a rise in silver prices over the last decade that is inadequate to overcome real rates of inflation over this time period will start requiring the PBOC to be more active in uplifting silver prices soon if it wants to save face with its hundreds of millions of citizens it urged to buy silver back in 2009. Saving face is one of the most important concepts of life in Asia. Even in homicide cases, many times, Asians that murdered another person stated as their motive “saving face”, simply because, as childish as this may sound, the person they murdered caused them to “lose face” through some action. This is a cultural phenomenon that Westerners often fail to ever fully comprehend that plays a heavy role in the policy decisions of Asian governing bodies. Trust me when I state that the PBOC must actively support silver and gold prices in future years to “save face” with their citizens, due to their aggressive message to buy gold and silver in 2009, and they know it.
Will this happen in the form of a gold-backed digital Yuan next year? Though gold imports did not soar in China as predicted by many news outlets with the loosening of gold import restrictions earlier this year in China, especially when compared with the multiple months of gold imports well in excess of 100 metric tonnes throughout 2017 and 2018, the fact is that China’s sovereign gold reserves are undoubtedly many multiple times in excess of their “official” reported reserves.
This conclusion can simply be drawn from documented numbers every year of China gold imports from Hong Kong, not to mention likely additional imports for decades from the largest gold refining nation in the world, Switzerland, that are kept off book and remain undisclosed. Something is afoot, and whatever is brewing underneath the surface will precipitate, I believe, within a year or two, and possibly as early as in the next six months.