SD Friday Wrap: The CFTC & PBOC will co-regulate gold products on the COMEX starting Monday. There’s just no way to sugar coat it…
Sure, there are a few people who care.
I wish others cared too, but I am not hopeful.
This is, in my opinion, the biggest piece of news in the gold space all year, and hardly anybody says a word.
It’s ironic too, because the very same people who are silent on China moving in on the US gold market are full of the “USA! USA! USA!” chants with the whole “NBA bowing down to China” scandal.
What a shame.
The same people who scream “China killed manufacturing in the US” find no issue with the communist nation doing who knows what in the US gold “market”.
It’s not like the currency wars, the trade wars, the US designating China a currency manipulator, and myriad bilateral tensions don’t matter.
They do (from just today):
Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!
— Donald J. Trump (@realDonaldTrump) October 11, 2019
That’s a pretty bland Tweet if you ask me, even if it does have an exclamation point at the end.
Because let’s not forget we are also talking about Public Enemy No. 1 (or 2):
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
An enemy has something to do with national security, doesn’t it?
Yes, and President Trump knows this:
There may or may not be National Security concerns with regard to Google and their relationship with China. If there is a problem, we will find out about it. I sincerely hope there is not!!!
— Donald J. Trump (@realDonaldTrump) July 26, 2019
And what could be more important, arguably, to national security, than a nation’s money?
OK, “Hey Half Dollar, you don’t get it man, a military is the most important thing to national security!”.
Well, not really.
If you’re military’s being depleted, but you’re on the verge of victory (or defeat), what do you need?
Reinforcements – either official, mercenary, or whatever.
And how do you get those reinforcements?
You have to pay for them, of course.
So money is arguably the most important thing to a nation’s security.
Which is one of the reasons I think this is such a big deal.
Once again, all I get back from Judy is the sound of crickets, and I’ll refrain from commenting on Rickards.
Their silence kind of makes you wonder about their true int…
The CFTC is, in fact, in bed with the Chinese come Monday:
Yes, the same blind-eye turning CFTC at best, or price suppression enabling CFTC at worst, and the PBOC, are co-regulating a “financially settled” gold futures product on COMEX, priced in renminbi.
You can’t make this stuff up.
I’m just starting to think about all the meanings behind this development on the COMEX.
For example, I may be right about China’s role being to offer the logistics of the “just-in-time” inventory as I speculated on Wednesday during our live-stream:
What I really want to do in this Friday Wrap is to share this awesome comment/question sent to [email protected] (I left the following paragraph unedited):
It seems to me that since China has a shit load of gold and silver that they would like the price of silver to be as high as possible. I would like to know why you seem to believe China would cooperate with the COMEX (instead of over-riding the COMEX and the other manipulators) when China and can dump U.S. treasuries if those at the COMEX continue to suppress the price of silver?
Here was my reply (unedited and full of my tpyos):
You make some great points.
As far as the dumping of treasuries, at this point I think the US would just create whatever dollars are needed to purchase those treasuries, which is where I do think we’re headed anyway, only it won’t just be US debt held by China, but straight up debt-demonetization of pretty much any and all debt, and annual budgets, of the US government itself. In my opinion, with the current crop of “elected” officials in Washington, that is, those corrupt, narcissistic, borderline sociopaths (let’s face it, a politician wants to tell others what they can and can’t do, so what does that make a “career” politician?), many of whom weren’t even “elected” but “selected”, in my opinion, they will do nothing for the good of the United States’ debt, deficits and/or finances, and they will only make things worse until the US becomes a failed state, buckling under its own weight.
That is where I think we’re headed. I wish I had a better outlook, but I don’t. And I don’t think the dollar gracefully hyperinflates, but rather, I see much looting, rioting, civil unrest and worse before the US finally falls apart, USSR style.
As far as China moving into the COMEX, there are several dynamics here.
I think in part, China is working with the COMEX as a way of making the logistics more efficient when it comes to sourcing gold in quantity for delivery. This allows China to continue to add to their stack at suppressed prices. In other words, it’s a way for the COMEX to prolong what will be eventual failure due to not being able to source physical gold in quantity without significantly higher prices, and now China is helping in this endeavor all the while stacking at these artificially suppressed prices.
There will also come a time when the Western gold & silver market riggers are unwilling to let any more gold or silver go at current suppressed prices, and by working with the COMEX, China will now be one of the first ones to know when we reach this point.
Here’s something else to think about, and I’m not sure which “royal” it was, but one of the British royals went to Epstein Island, and claimed it was to “end his relationship with Epstein”. I don’t believe that. Nobody who goes/went to Epstein Island looking to reform the place or conduct some drab, lame, personal business. In that same sense, China’s not going into the COMEX to bring honesty back into the COMEX. Just like I feel there is no fixing or reforming there Fed, I don’t think there is fixing or reforming the COMEX. China is going into the COMEX to learn how to conduct, carry out, perpetuate and tweak to their own liking this evil, corrupt, and fraudulently run gold & silver “markets”.
Another thought is this: How do “financially settled” only, yuan denominated Shanghai Gold Futures products, with price regulated by the PBOC, have anything to do with the original intent of a physical commodities “futures” market. If the purpose of a futures market in metal, and any metal, which could be copper, gold, or whatever, is to facilitate producer hedging and other mine-to-market functions, China going into the COMEX has with a purely financial product priced in a foreign currency has nothing to do with what this market is supposed to be all about.
It all boils down to the “if you can’t beat ’em, join ’em” way of thinking, so for now, China is content on joining forces (because I think China knows it still cannot beat the United States militarily, at least not right now). As an added bonus, they will be learning more of the intricacies of “how to manipulate (suppress) the gold price after this whole thing goes down (fiat currency crisis, reset, etc), so there is no doubt in my mind that the Chinese government will want to control the gold price as much as possible in much of the same way the West has. “On-the-job-training” if I may. Gold is the money of nations, and the Cartel is looking at China as the Masters of Efficiency who can keep the flow of money for just a little while longer, and China is looking at the cartel as Masters of Market Rigging, a power which China surely wants to have, especially if we are to believe the hard-line communism stuff where the state has all of the power, we can be certain the red state will want to be all over control of money, gold.
Those are just some thoughts for a reply. I hope they help? These aren’t all of my thoughts on this development, but just a few points.
I’ve only started thinking this through myself, and I’m not sure why I feel I need to do the thought exercises, but maybe it is because I don’t hear others talking about this at all, and I do think it is a big deal, even if we don’t really understand what is being done since, well me anyway, am only an outside observer looking in at what they’re telling us in their documentation. So far, this is all my working theory on the matter, but it was only this week when I literally just started looking into this and thinking about China moving into the COMEX, so I’ll likely change and tweak my theory as I come to learn and understand more.
Nothing fundamentally has changed, however, but the mechanics of the suppression could be changing next week.
Note: These charts were set-up around 11:30 a.m. EST on Friday and do not include price action after that time unless stated.
There is a clear down-trend in the gold-to-silver ratio:
We have a second lower-high, and if we roll over here, which I think will be the case, then we’ll be en route to a second lower-low.
Silver is holding up at support at $17:50:
It really is amazing to see silver’s price falling with all of the market, economic, political and geo-political uncertainties around the world.
Gold is starting to break-down again:
On Monday I said gold still had plenty of room to run before screaming “oversold” on the RSI, to which the casino gamblers get all warm & fuzzy about jumping back in on the long side, and we can see that today, Friday, we still do have plenty of room to run to the downside.
Check out palladium’s new all-time high just today:
Fundamentals matter, and palladium is proving that sooner or later, the fundamentals win.
Platinum is sitting right on its 50-day moving average:
Assuming we don’t break-down much lower than $860, it’s hard to argue that platinum hasn’t carved out a choppy but massive bottom over the last year.
Iranian oil tankers get hit by missiles near Saudi Arabia, and we still have crude oil priced under $55:
The technicals are set-up in a way that we could really see some spikes in price that catch oil traders off guard.
Copper had a strong two days to finish the week:
The all-important higher-low is in the making.
I know I’ve been talking about the Russell 2000 this week, but I’d like to end the week with the Dow:
We’re right back at Dow 27,000!
Wow, just wow.
Of course, there’s not a concern in the investing world right now as evidenced by the plunge in the VIX:
Everybody must be thinking “why worry”, much less “why put on a hedge”, now that the Fed has now officially announced the start of QE4?
What is worrisome, however, is this massive volatility in yield on the supposed safest of the “safe haven” assets:
This is not the kind of volatility one wants in the “safety” of US treasuries.
The US dollar index has been worked back below 98.5:
I would not be expecting the dollar to strengthen yet again once this QE begins in earnest.
What’s the bottom line as we find ourselves here this beautiful Friday in mid-October?
The PBOC is about to waltz in on the US gold futures “market”, yet nobody cares.
To me, it is a big deal that speaks to the difficulty of finding real physical gold.
The Fed is also announcing the start of its latest money printing schemes.
To me, it is a big deal that speaks to the difficulty of controlling rates.
So the bottom line is the gold & credit markets are a total mess!
Sheeple, however, have no idea what is coming for them.
The sheeple aren’t supposed to get it, they’re sheep!
Sheep are really only meant to be slaughtered.
And we’re about to see wholesale killing.
For the 3rd time in only two decades.
In the markets & in the economy.
It will be particularly ruthless.
Because it will be global.
And it will be the end.
The end of what?
The US dollar.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.