In the middle of this jungle of jaundiced analysis…and jumble of misapplied facts… there is an elephant in the room.
A golden elephant – with enough time and patience, it’s mysteriously invisible presence in plain sight will be made apparent to all.
The theme of China’s(or if you like –Asia’s) growing gold purchases has taken on a life of its own in the gold community… the jist of which is that every ounce of gold which goes from west to east serves to strengthen the price of gold in western markets, and ultimately, bring about that hallelujah moment that westerners have been impatiently waiting for – when the POG skyrockets… to the sound of goldbugs popping champagne corks!
This post is about correcting that narrative… so that western precious metals investors can be better served, by more accurate information.
By Roguefaction, SRSRocco Report:
Part 3 was intended to follow parts one and two of this series with a review of how economic history has been re-written to serve those with an agenda of defrauding westerners of their remaining wealth and liberties… that’s on the back-burner for the moment.
Feedback from those two segments helped me realize that no transplantation of fresh perspective will succeed in taking root without first clearing away the misconceptions which surround the issue of Asian gold purchase. Because in the middle of this jungle of jaundiced analysis…
and jumble of misapplied facts… there is an elephant in the room. A golden elephant – with enough time and patience, it’s mysteriously invisible presence in plain sight will be made apparent to all.
Sometimes it takes a bit of corroboration to be sure of the evidence of one’s own senses. Having seen plainly with my own eyes just how poorly the subject of China is reported by western media, I still needed to read something as clear and simple as this recent guest post on Koos Jansens site in order to be finally sure of the fact.
It’s as if a Chinese television producer were to go to Orlando with a camera crew and create a program around the theme that the USA is a giant Disney theme park!
The reportage is so drastically bad, in other words, that until corrected, there is no use in trying to redirect people’s attention to what is really going on in the East. With this last pass of the brush hog, perhaps a suitable seedbed will have been laid down for the subsequent examination of what several portentous developments are likely to mean for Western precious metal holders
It also became apparent to me that there are a variety of attention spans, reading habits, and levels of curiosity amongst the readership. To deal with this diversity, I hit upon an idea to better serve all. This, therefore, is an abridged edition of the full part three of the series. Those up for it can read the full version here, if this link to my badly hacked original site fails to work… as usual. For those more comfortable with an attenuated presentation, this bullet point summation should be just the ticket!.
Finally, to finish this necessary preamble… once again I have to draw upon another gold-associated blogger… in this case FOFOA, from his latest: –
“I don’t know how long or how many posts it will take me to explain what I have in mind. I’m not working off an outline. But here’s a bit of a spoiler for those of you who are impatient, don’t like to read, or don’t care about understanding it deeply and would rather just have an abstract that can be easily dismissed so you can get back to tradable technical analysis.”
The pithy eloquence of which is too great… and too applicable… not to repeat! So here’s your spoiler… for those who fall into the category…
The theme of China’s(or if you like –Asia’s) growing gold purchases has taken on a life of its own in the gold community… the jist of which is that every ounce of gold which goes from west to east serves to strengthen the price of gold in western markets, and ultimately, bring about that hallelujah moment that westerners have been impatiently waiting for – when the POG skyrockets… to the sound of goldbugs popping champagne corks! This post is about correcting that narrative… so that western precious metals investors can be better served, by more accurate information. There you have it … in one paragraph Those who wish …may go back to their charts!
Lord George Macartney left England in 1792 on the first official British Mission to China, styled as being “for the promotion of science and to secure a more favorable trade agreement and diplomatic ties.” In plainer terms, the mission’s purpose was to convince the Chinese to buy British manufactures, with which to pay for all the silks and teas & chinaware which the commercial houses in England traded widely in for handsome profit. It was causing serious drain on the country’s supply of silver to import those treasured items from the East, anathema to the mercantilist spirit of the financial interests which employed Britannia to rule the waves. Ways would need be found to correct this unfavourable balance of trade, and ways would be found!
Upon reaching the summer palace of the Celestial Emperor a year later, the delegation was received as a tribute mission from another of the barbarous tribes of the west. Being in their own eyes the center of the civilized world, the Chinese of that era viewed the peoples of the western lands as “of a turbulent character, conquering nations by violence and deception!” Macartney was admonished to tell the British monarch to “act in conformity with our wishes by strengthening your loyalty and swearing perpetual obedience,” and to “tremblingly obey and show no negligence!” He was also tasked to deliver the message that China was self-sufficient and had “not the slightest need for your Country’s manufactures. Our Celestial Empire possesses all things in prolific abundance and lacks no product within its borders. There is therefore no need to import the manufactures of outside barbarians in exchange for our own produce.”
Having experienced its own interlude of paper money meltdown well before the west had developed its version of such schemes, the Eastern Empire had shifted over to a copper/silver regimen that served well enough through the centuries which followed. It was the high demand for silver brought about by it being currency in China, that had provided the original impetus for western sailing ventures to the Far East. The financiers who backed those voyages received tremendous profit from arbitraging the difference in the gold/silver ratio between east and west. With the ratio in the West varying from 12:1 to 16:1 throughout the centuries, in the Far East it stood at 8:1 to as low as 6:1. . Without the arbitrage trade, there would have been little to support the west’s China sailings, as the Europeans manufactured little of interest to the Chinese to exchange for the commodities they coveted.
The international sea trade of the Orient took place within an Asian commercial zone that spanned many leagues and many centuries. It was bounded by the Red Sea, Indian Ocean Sea of Japan, Straits of Malacca, through which the Islamic, Hindu and Buddhist worlds made their trade with the Far Eastern ports. Contrary to the fancies peddled by some amateur historians popular with the goldbug crowd, little in the way of trade exchange was conducted with the ‘foreign devils of the west before the C19th century. A relative backwater in the global scheme of things, until Spanish silver from the Americas poured into the East, Europe was not a major player in the trade of far Eastern Asia before that time.
Up until gunboat diplomacy of the C19th forced open the gates of the Celestial Empire to the barbarians with their cargoes of opium, silver was virtually the only commodity with which the west could pay for their purchases; so it was that, starting with the Portuguese, ships carried silver on the outgoing journeys to the East, not trade stock! The forcible opening of the “China Trade” to bilateral commodity exchanges was an indirect result of the flood of silver from the Americas which the Spanish had shipped out of Acapulco in such quantities that eventually the ratio reached parity between east and west, and the arbitrage trade was destroyed. Faced with the loss of their rich profits, the commercial classes gradually assuming control of European governments dictated that the English navy act as it’s enforcer in creating and maintaining a “market” for their Indian opium in the Chinese ports of call.
For nearly a century the Asian nations have striven to catch up to the west in the employment of science to the service of technological advancement. Thanks to the wealth they have accumulated from their own recent phase of manufacturing mercantilism, they are now at the point of being able to reexamine their past traditions with an eye to fusing the best of them with the advances of their modernized systems of production. As witnesses to the depredations that western monopoly finance capitalism has imposed upon them in the past, at this point it can be confidently predicted that the Asians will gladly adapt and modify whatever they can of the western worlds technological and financial instruments… but will do so in a manner in keeping with Sun Tzu’s Arts of War. The point should not be missed by the westerner hoping to correctly gauge current events… there is indeed a war in progress.
While the East hopes that this war will run its course in economic form, the governments of the West seem to be itching for a hot war to break out. As the military auxiliaries of those financial interests in longstanding control of the western bloc make every effort to form a wall of containment around China, those same barbarous tendencies towards crude and violent aggression must weigh heavily on the minds of China’s leaders. With the dollar operating in a role similar to how gunboat diplomacy and the opium trade were employed in another era, there can be little doubt the Chinese will eventually decide to divorce entirely from a system based upon hegemonistic western win-lose formulas, so as to cultivate new win-win alliances which favor peaceable trade and mutual gain.
The scientific-technological paradigm that brought the western world to global hegemony has failed to deliver it from a coming collapse, and countries once spellbound by the power of the west’s technological ascendance now re-align themselves to new, freer trade alliances, and multipolar power relationships. As the West is forced to retreat from its various Asian outposts like Afghanistan, the source of illicit black ops funds which supports its various proxy wars and meddling in the Middle East will dry up… leading to a power vacuum to be quickly filled by more adept players.
Watching the west descend into a debt-ridden nightmare of social and economic decay gives the ‘rest of the world’ plenty of reason to look for alternative models on which to base future development. In search of this next global paradigm, the Asian countries will go back to the cultural legacies of their own past – in search of values which balance and compliment the materialist ones underpinning their increasing economic wealth. In so doing, they will doubtless forge new social and economic arrangements that have little or nothing to do with the neo-liberal or social democratic ideologies of the western lands. It may well be the fate of allEuropean- bred ideologies -from ‘capitalism’ to ‘communism’ – to go the way of the dodo in this millennium, as the world tires of the ‘invisible hand’ of the moneypower setting up and knocking down it’s puppets and princelings, time and again!
The long history of metal-based currency systems in nations of the east, and the unbroken custom of its peoples to hold their wealth in precious metals, make it only logical to suppose that part of this process of adapting old to new will be applied to the monetary metals. While much has been made of late about the drive to a global, one world political and economic system, it appears more likely that nation states will continue to be the dominant arrangement, albeit aligned in various blocs and trade unions. Likewise, a variety of currency schemes will most probably arise, with differing emphasis on the use and value of the metals. As the world formalizes into two major power blocs, where writ of the banking interests remains most entrenched, return to metallic-based systems is unlikely. In the western bloc, the current build up of surveillance, tax legislation and currency controls indicates a widening grab for private assets on the part of the state and its corporate handlers.
In sum, not every place on the globe will serve to provide the individual holding a store of gold and silver with protection from the rapacious state or its criminal auxiliaries. Unfortunately for metal holders of the western world, the trend to increasing use of electronic currencies and the willingness of their countries leaders to give up national sovereignty in favor of agreements ofsecret and dubious nature bodes ill for their chances of holding a winning hand in the coming paradigm change.
Back in the 1960′s the phrase “made in Japan” used to convey the same sense of cheap, shoddily- made imports that the term ‘made in China’ does today. That era ended with the arrival of the first Corollas on the wharves of the west coast of North America, and then the flood of cameras, electronics and other well designed and manufactured consumer goods that were the result of a melding of far eastern design aesthetics and western engineering know how. It is only a matter of time till the same process of technology transfer blends with re-fashioned aesthetic principles to guide the Chinese and neighboring countries to a similarpromotion in global ranking in all measurements of quality – most particularly – quality of life!
Nothing speaks to quality of life like being free and clear of debt, holding personal assets that are insulated from depreciation, regime change, and so on. Just ask a citizen of a country like Argentina! While Asian nations like China directly promote the private ownership of precious metals, in the west it is actively discouraged. This speaks volumes to the relative measure of faith that can be put into the intentions of the two international power blocs forming up at the moment… a corrupt, debt-based, increasingly socialized western one versus a dynamically growing mixed economic Asian model that chooses to avoid the excesses of state planned past, while giving market systems a chance to show what they can do to contribute to the overall good of society, instead of to diminish it.
Getting an idea of just how this new system can and will be put together requires more than simply reading second hand reportage in the western media. What is left of the craft of journalism there is reduced by and large to guest pieces in print media or on blogs by travelers whose short stays in Asia allow them but a glimpse of the unfolding future. Far too many of those who go to China and the East in order to report on “business” remain totally blind to the key ways in which that activity is integrated differently into the other aspects of society in the East… making their reports deeply flawed for the purpose of anticipating future developments. This, combined with the studied distaste that westerners have developed for learning about the wider world creates a vacuum of understanding about that increasingly wealthier world building outside of their ken!
As I mentioned in a previous segment of this series, there is no more contrarian class of asset allocation – if you live in the western world – than gold or silver. If one somehow managed to double the number of people there who owned those metals there… you would still be talking about much less than 5% of the population. Contrast that with the situation in pretty much any Asian country – where the tradition of holding those them remains unbroken over time. In the one where I live, the connection to gold runs through every strata of society… all but the very poorest find the wherewithal to buy gold bracelets for weddings, or the 22 karat 170 g coins for savings. Many bouts of currency depreciation and inflation have given them a keen understanding of its economic role!
This huge difference between east and west – and its implications for the future seems to get filtered via the screen of projection which westerners use when looking out upon the wider world. The contrast between countries where gold/silver are an established tradition – and those where they are no longer seen as of financial relevance, is one of much more than merely style or tradition. Those in the west who believe that the current surge in buying on the part of the Asian nations is a phenomena that can only result in an increase to the value of their metals portfolio have created a picture more akin to the reflections in a funhouse mirror than an accurate assessment of where things will lead! I call this charming fiction the CHINA MEME.
It’s use, in attempting to leverage the simple fact of a surge in Asian precious metal buying –into a supposed counterweight to the message this series presents, is just another…
ruse/strawman argument. Employed as preemptive strike by those who prey upon the blind spots of the western metal holder, it serves to confuse and distract rather than enlighten. As balance of power shifts steadily eastwards, the mechanisms of true price discovery that develop there will not be so easily instituted in the benighted west.. Either a continuation in some form of the current corrupted financial system, or a breakdown into chaos is likely to be the short term fate of the western world… either way, the orderly evolution of a metallic-based currency system is not a high probability. Having no gold left with which to negotiate entry into the new international trading system now being built, the majority of the formerly first world will be reduced to poor cousins looking in from without.
More than anything else, what all this Asian gold buying means for the western investor is that the world is about to become divided into two very different halves – only one of which will be a safe refuge for the metal holder! The other, ruled over by the BIS and other instruments of the financial interests who control virtually ALL media outlets in their half of the world –MSM or otherwise, will continue the sequence of measures by which wealth can be stripped from the populace. By fraud – in the form of MFG style judicially-sanctioned operations… or by stealth – in the way of laws that target the metals with hoarding and/or windfall profit taxes… or throughoutright theft, as in a confiscation/nationalisation scenario… the corporo-fascistic governments of the west can be counted upon to aim for the wealth of those who hold precious metals, or any other tangible assets… in pursuit of their cherished return to a neo-feudal order.
The entire western world is now effectively one massive TERROR state… one OBAMANATION (under DOG -where every sane human value is inverted to its opposite) … the ‘citizens’ of which have nothing to look forward to other than the EXTRAORDINARY RENDITION of their person & property into the hands of a clique of Khmer Rouge-like communo-fascists operating at the behest of the usual shadowy interests. In the deadly game of ‘gift-exchange’ that takes place between the western NATO-NAZIS and their puppet “ISLAMIC TERRORIST” proxies, the flow of stock is the the blood of innocents. Can anyone be so foolish as to think this circulatory system will go in only one direction? Every staged “Sandy Hook” is a step closer in the psychological preparation of the western psyche for the full outbreak of state-sponsored violence – of the kind which people are accustoming to watch happen on their tv screens in other places – to other people…. until the moment is deemed right for the inception of Baghdad on the streets of Baltimore.
Where a tiny minority of the populace has tangible wealth in the form of gold\silver, it is credulous in the extreme to believe that a) a hard money based system is likely to be a part of their nations’ future… b)that state mandated confiscation of that wealth will not be employed… with the approval of that 98% who have no stake in precious metals. In the aftermath of systemic social breakdown, wealth-stripped refugees from these former ‘first world’ lands looking for a new nest are more than likely to find themselves viewed as international pariahs by their intended hosts. Freedom to travel… minus one’s wealth… is the ‘freedom’ of the runaway slave.
In contrast to all of which, in nations where the great majority of the population is possessed of some measure of metal holdings, even were there the will to do so, the ability of the state to confiscate is greatly reduced. Because of their familiarity with precious metals as stores of wealth it is not at all hard to imagine that in the Asian bloc, some form of monetary metals system will arrive to replace the discredited paper ponzi system…perhaps for both for trade settlement and domestic currency… and that these nations can adapt relatively easily to a new international gold-based trading system which is antithetical to the western financial hegemony of the moment. Jim Willie believes that the activities of the Euroasian Economic Forum appear to be signaling the forthcoming of a standardized gold currency which will have writ across the major portion of the globe, like a new form of Byzantium Bezant, which for centuries was accepted from the far East to farthest West! Only the (greatly reduced) zone until direct control of the western banking elite will not be switching over to this probable dollar replacement currency. It remains to be seen how the Euro will fare under the new system… and how much of Europe remains under the control of the Atlanticists! Much will depend on whether the European nations’ gold stored with the Anglo-merikan Empire actually exists or not.
In addition to a living cultural tradition, many Asian countries still have the advantage of a religious heritage which mandates the use of precious metals, and prohibits the use of debt and usury instruments. Though western-backed ‘reformers’ instituted a modernization of Islam, as with Christianity, by which these strictures have been diluted to almost nothing, there still exist on the books of Islamic jurisprudence and in their holiest scriptures the outlines of a metallic money system just waiting to be reactivated when the petrodollar falls.
Had the plans of the western based financial hegemonists gone smoothly, these residual cultural zones of metallic money tradition would have been all terminated by now. “Muslim extremism,” middle eastern tensions, Arab Springs? Forget about oil…forget about “religion” or the ‘clash of civilizations! This is and always has been about the confrontation of the western debt/usury reserve banking system with the ultimate enemy of fiat feudalism. The current conjunction of interests… whereby the two great Asian powers of Russia and China are aligning both commercially and militarily with the Islamic states is a nightmare coming true for the international banking manipulators. Heading off this conjunction has been the major foreign policy task of the political front men that pose as leaders in the USA and Nato allied countries… whose intelligence services have been dedicated to stirring up rifts between not just Islam and the West, but equally Islam and the East… via their Chechen, Albanian, Uyghur and Al-CIada proxies trained and armed to create the conditions of upheaval by which the desired ‘clash of civilizations’ can finally come about… and the peoples of the west and those of Islamic Asia destroy themselves to the benefit of certain parties hidden to the contemporary eye but known to the careful reader of the historical record.
As the phrase American boots on the ground in Iraq once more enters the daily news cycle, it’s clear that those who have hijacked western governments and their taxpayers as proxies for the defense of debt-usury based monopoly capitalism have no intention of letting go their mad plans for brinkmanship and all out war. The battle lines are forming, between a west unwilling to let go of its chokehold on global power and resources, and the Eastern alliance that sees its chance at last to diverge from the financial system which underpins that chokehold. The more they lose their power and influence over the rest of the world, the more the corporo-fascistic elite ruling the west will crack down on and oppress its own population, of whom no stone will be left unturned in extracting the last ounce of wealth!
While all of this may sound improbable, it should not be forgotten of Russia a hundred years ago, that none of those who were in any way well off prior to 1918 ever imagined themselves becoming victims of a ruthless foreign ideology and police state apparatus. It should be better known that the parties who bankrolled the Bolshevik extinction of over nearly half a hundred million Russians are the same bankster clique who bankrolled the ascent into office of an alien born Trojan Horse President of unknown provenance mentored by that same Weatherman terrorist cell which proposed the ‘elimination’ of those Americans recalcitrant in accepting their revolutionary putsch! History not only rhymes, it races to repeat the reduction of all who remain heedless of its lessons! The shifts in power from this point on will be swift, breathtaking, and irreversible. Think 1990s fall of the wall in reverse!
In creating this series it’s been my aim to counteract the appalling lack of informed analysis in the precious metals sector – where simple cheerleading and chart pornucopia substitute for a reasoned interpretation of outside events having great bearing on gold and silver holders. The western investor is held hostage to facile and misleading second hand stories peddled by persons with little direct knowledge of areas of the world of key importance to those who hope to survive the coming storm!
Prior to my own escape from the Americas, the most vexing hindrance to making up my mind to go was the almost total absence of objective, first hand information available from those who had already transplanted themselves to distant shores. Remembering this lack, and having learned just how different things look from outside the fishbowl of the western worldview gives me cause to offer those with a hunger for fresh perspectives the few morsels I can muster. Those who remain unconvinced that their interests as precious metals holders are best served by the fuzzy and abstract notions of a return to ‘honest money’ in the West deserve this chance to reflect upon their futures, with the perspective which can only be provided via glimpses from the post-western world!
I am not here to rain on anyone’s parade. If you think that you will be profited by holding precious metals while holding onto your place in the western scheme of things… that is no problem for me! These postcards from a post-western world are addressed to those who are not so sure about that future. As always, critique of the presentation delivered free and clear of resort to mindless invective and strawman argument is warmly welcomed. At the end of the day, we should be free to consider all points of view in the spirit of mutual education and the cross pollination of ideas. I make no claim to knowing all the details of what secrets lie behind the doors of the worlds movers and shakers… but willingly share this thought experiment so as to encourage others to come forward and contribute to a puzzle which can only be solved via a collective effort on the part of those honestly seeking to inform themselves to the greatest degree possible, in a world of deception and disinfo.
The first two parts of this series were spent in search of the key which unlocks for readers the door to the goings on of the wider world – outside of their comforting but asphyxiating media-made tranquility tank… so as to best help those intent on adapting themselves to rapidly changing realities. In part Four, an examination of the way in which the real nature of gold price suppression has been hidden in plain sight… as the golden elephant in the room… will help guide us towards a realistic understanding of where it’s all leading and who will be the beneficiaries of the coming global seismic shift!