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Showing posts with label yuan. Show all posts
Showing posts with label yuan. Show all posts

Tuesday, June 6, 2017

Chinese investors looking for any and all safe havens out of Yuan as gold imports soar to highest level since 2013

While Chinese regulators attempt to tweak Bitcoin and other cryptocurrency use within its borders, the virtual money is not the only save haven investors are seeking to move into as a way to get out of the Yuan.  In fact, 2017 has once again seen a surge in gold imports and purchases after a slight slowdown last year.

China, the world’s biggest gold market, may boost imports through Hong Kong by about half this year as local investors seek to protect their wealth from currency risks, a slowing property market and volatile stocks, according to the Chinese Gold & Silver Exchange Society. 
Mainland China is set to import about 1,000 metric tons from the territory in 2017, said Haywood Cheung, president of the century-old exchange in Hong Kong which trades physical gold and silver. That compares with net purchases of 647 tons last year and would be the biggest since 2013, data from the Hong Kong Census and Statistics Department compiled by Bloomberg show. - Bloomberg
With the ongoing frenzy in the cryptocurrencies encompassing not just China, but all of Asia, gold is looking like a under-valued asset in comparison to Bitcoin which is now more than twice the price of an ounce of gold.  And couple this with geo-political chaos in the Middle East and in Britain over the past month, and it appears more and more that trust in sovereign currencies are losing favor as the shift to alternative wealth protections outside the Yuan had become a high priority.


Monday, May 1, 2017

Silver, not gold, was the basis for monetary systems across the world including the U.S. and China

Despite the fact that the United States was primarily on a gold backed monetary system until 1973, and where it was also the foundation for a global monetary system through the Bretton Woods accords of 1946, an interesting piece of history shows that not only was the dollar originally created using the auspices of silver, but so was the Yuan, the Yen, British Pound, and most currencies used in Latin America.

When the Spanish owned claim to the entire new world thanks to Christopher Columbus and an agreement signed by the Pope, the output of silver generated from North, Central, and South America was so great that it usurped gold's longstanding position as the basis for money, and spread across the globe to become the foundation for many of Europe and Asia's currencies.

US-Trade$ 1873-1878
Hong Kong was a British colony from its founding in 1841 until its handover to China in 1997. But the Hong Kong dollar isn't derived from the British pound. It doesn't even come from the U.S. dollar. In fact, the Hong Kong dollar and the U.S. dollar are both derived from the same source: the Mexican or “Spanish” dollar. So were the yuan, the yen and most of the currencies of Latin America. 
The Mexican or “Spanish” dollar was in wide use from the 1500s until the middle of the nineteenth century. If not the first global currency, the Mexican dollar was at least the first Pacific currency. Divided into pieces of eight, it is the currency of pirate legends and songs. It was minted in Mexico starting in 1536 from silver mined in Central Europe, in northwestern Mexico, but most of all in the “silver mountain” of Potosí in today's Bolivia. 
For four hundreds of years the Mexican dollar was, if not quite “the world’s first global currency,” then at least the key lubricant that greased the wheels of the world's trade. Most world histories are written from an Anglo-American perspective, as if the Americas suddenly sprang onto the stage in 1776 and China in the 1840s. In reality, as Gordon and Morales write, Latin America and East Asia were already important parts of the global economy in the 1600s. 
Even if there is some truth to the claim that Britannia ruled the waves, the Mexican dollar ruled the ports—on both sides of the Pacific. The British couldn't even get their own colonists to use the pound. Hong Kong, Singapore, Australia and Canada (to say nothing of the United States and Latin America) all used the Mexican dollar. And after the Mexican dollar finally slipped from the scene in the nineteenth century, it was the U.S. dollar that replaced it, not the pound. 
But the key to it all, then and now, was China. For the hundred years from 1540-1640 China was the vast sink into which the world's silver drained. The newly globalizing world—Europeans, but also Ottomans, Indians and especially Americans—all wanted what China had to offer, porcelains and silks most of all. But Chinese merchants wanted only one thing from the rest of the world: money. And in sixteenth century China, money meant silver. - National Interest
So the next time an analyst suggests that the world's currencies need to return to a gold standard for monetary stability, remember that the greatest economic growth in history took place when much of the globe was using silver rather than gold as it primary form of money.

Thursday, April 27, 2017

Iran's model for using gold in place of the petrodollar growing as Russia takes the lead in global oil market

Even before China and Russia implemented their new payment systems to allow for nations to trade using their own currencies rather than having to go through SWIFT and the dollar, a precedent was set during the years of Iranian sanctions to have oil trading done outside the petrodollar.

Image result for gold for oil
The sanctions were meant to be stifling, but the Iranians loosened this problematic liquidity noose by using all their banks that weren’t sanctioned, and sold rich Iranian oil to India. Of course, the Indians couldn’t pay Tehran directly. Neither could they pay bilaterally in rupees due to sanctions and infrastructure needed to trade in a bilateral currency. Instead, Iran requested that India pay in gold so India paid Turkey, the Middle East’s gold market, and Turkey gave Turkish gold to Iranian banks, which then swapped with the Central Bank of Iran.
This 'oil for gold' mechanism allowed Iran to survive during the decade long sanctions imposed upon them by the U.S., but more importantly, it set in motion a way for Russia and China to use this process on a more permanent basis.
This clever evasion was known as the Iran-India-Turkey triangle. Iran was escaping the dominance of the US dollar and trading in real money, not a hegemonic fiat currency that was being printed hot-off-the-press all day. They were dealing in gold; not something that could be strangled through SWIFT and electrons traded on a screen easily. A simple intermediator and precious metals could break Obama’s heralded “crippling” sanctions. 
Fast forward to March 2017; the Russian Central Bank opened its first overseas office in Beijing as an early step in phasing in a gold-backed standard of trade. This would be done by finalizing the issuance of the first federal loan bonds denominated in Chinese yuan and to allow gold imports from Russia. 
The Chinese government wishes to internationalize the yuan, and conduct trade in yuan as it has been doing, and is beginning to increase trade with Russia. They’ve been taking these steps with bilateral trading, native trading systems and so on. However, when Russia and China agreed on their bilateral US$400 billion pipeline deal, China wished to, and did, pay for the pipeline with yuan treasury bonds, and then later for Russian oil in yuan. 
This evasion of, and unprecedented breakaway from, the reign of the US dollar monetary system is taking many forms, but one of the most threatening is the Russians trading Chinese yuan for gold. The Russians are already taking Chinese yuan, made from the sales of their oil to China, back to the Shanghai Gold Exchange to then buy gold with yuan-denominated gold futures contracts - basically a barter system or trade. 
The Chinese are hoping that by starting to assimilate the yuan futures contract for oil, facilitating the payment of oil in yuan, the hedging of which will be done in Shanghai, it will allow the yuan to be perceived as a primary currency for trading oil. The world’s top importer (China) and exporter (Russia) are taking steps to convert payments into gold. This is known. So, who would be the greatest asset to lure into trading oil for yuan? The Saudis, of course. 
All the Chinese need is for the Saudis to sell China oil in exchange for yuan. If the House of Saud decides to pursue that exchange, the Gulf petro-monarchies will follow suit, and then Nigeria, and so on. This will fundamentally threaten the petrodollar. - Atimes

Tuesday, March 14, 2017

As China accumulates gold for RMB internationalization, estimates have their holdings at nearly 20,000 tons

One of the more difficult things financial analysts have had to do is to try to piece together just how much gold China has accumulated over the past 10-20 years.  For some analysts like Dr. Jim Willie, the estimates range between 25,000 and 40,000 due to market insiders who provided him information that China had been buying at least 1,000 tons of gold per month for more than a year and a half.

Additionally, China has become the world's largest gold producer and per state policy, does not export any of its metals to foreign markets.  Meaning that they produce between 276 tons (2006) and 450 tons (2014) per year, every year.

And lastly of course is the fact that China does not have the same type of storage and documentation procedures as the Western markets do, meaning that while they occasionally report gold holdings attributed directly to the Peoples Bank of China (PBOC), they do not report any holdings or distributions among the vast myriad of other banks that function under the umbrella of state control.

Thus in the end it is nary impossible to know exactly how much gold China owns and controls.  But one analyst believes that through his research he can get within the ballpark of their holdings, and why China has been purposefully accumulating gold in such quantities.

China, it seems, wants to make the rules in the international monetary system, which is why it has been acquiring vast amounts of gold both through private and official channels. 
Because of the obscure nature of the Chinese gold market and the reluctance of Chinese officials to show their hand, nobody has been able to accurately calculate how much gold the Chinese have amassed since about 2000, when they began amassing it. 
Enter Koos Jansen, an analyst with Singapore bullion dealer Bullion Star. He has studied the Chinese gold market for years and recently came up with an estimate of total Chinese gold holdings: 19,500 metric tons, or 21,495 U.S. tons, at the end of January 2017. 
“They have promoted gold ownership as a store of value since at least 2002, but more so when they introduced the ‘storing gold with the people’ concept in 2004,” says Jansen, a campaign encouraging private citizens to buy gold. - Epoch Times
And the purpose behind China's ongoing 15 year plan for gold accumulation...
According to Jansen’s contacts at Chinese banks, official holdings are closer to 4,000 tons rather than the published figure of 1839 tons. What does China need that gold for? 
“They buy official gold to internationalize the Renminbi. If there are enough reserves behind it, they can make it a credible currency.” He who has the gold makes the rules. 
That’s also why China doesn’t allow even one ounce of gold and silver to leave its shores once it enters. “The West has been selling gold into a black hole,” says Jansen.

Sunday, March 5, 2017

RMB internationalization could soon get major boost as desperate EU looks to bail out financial system with Yuan bonds

After a modicum of success in expanding the RMB's use outside of China when their currency became accepted into the IMF's SDR basket of currencies last year, the Yuan has since seen a slowdown for internationalization due in part from capital controls they instituted to try to restrict a growing occurrence of capital flight.  But in an interview given on March 5 by the head of the European Stability Mechanism (ESM), that may soon be changing as the financial body responsible for protecting the stability of the Eurozone suggested that the next round of 'Quantitative Easing' may involve bonds denominated in Yuan as the foundation for bailing out banks and other financial institutions.

The head of the organization charged with safeguarding financial stability in the eurozone said he does not rule out issuing Chinese yuan-denominated bonds to fund the rescue of European nations and institutions. 
"[Issuing European Stability Mechanism bonds in yuan] is possible," Klaus Regling, managing director of the ESM, said in a recent interview with the Nikkei Asian Review. He said the institution was preparing to issue dollar-denominated bonds in the fourth quarter of this year -- the ESM's first non-euro bond issuance -- but added that other currencies remained an option. 
"We are legally allowed to issue in all currencies," he said. "As a young institution, it is a big step to do our first non-euro issue ... and it seems to make sense from the market side to start with the U.S. dollar. But it is entirely possible that we move into other currencies that are attractive from the market side." - Asia.Nikkei
The European Stability Mechanism (ESM) is Europe's equivalent of the U.S.'s Exchange Stabilization Fund (ESF) in that it acts as a neutral party, able to step in and fill any monetary needs for the financial system.

If the EU is now looking towards the Chinese Yuan as a much better asset and currency to sell to fund and bailout European financial institutions in the future, then this will go an extraordinarily long way in fulfilling China's goal of internationalizing the Yuan, and moving it towards becoming an equal shareholder with the dollar as one of the world's primary reserve currencies.

Monday, January 16, 2017

World Gold Council official sees Chinese investment in metal soaring from depositors who have ¥22 trillion to spend

One of the primary reasons that Bitcoin saw a roller coaster ride over the past month was in large part due to Chinese depositors and investors using the crypto-currency as a mechanism to divest some of their Yuan denominated holdings to exchange them for assets in other currencies.  But even as the Chinese government starts to crack down on Bitcoin exchanges, a representative for China at the World Gold Council believes that this money could eventually funnel its way into physical gold.

The Chinese Have A Jaw-Dropping $22 Trillion In Bank Deposits – What This Means For Gold & China Bears

Chinese depositors have an estimated ¥22 trillion in cash held inside banks, and are looking for avenues to both invest and exchange out of in light of capital controls meant to keep the currency from offshore capital flight.  And with the Shanghai Gold Exchange emerging last year as the world's largest physical gold market, acquisition of gold by the Chinese people is not a very difficult concept to fathom at all.

It’s inevitable that fairly soon - possibly even by the end of the year - the renminbi will be a floating currency. Moreover, either on its own or as part of a basket of currencies, a floating renminbi will be at least partially backed by gold. In other words, China is on an inexorable course to exert an economic stranglehold on the East. The world will then likely have two reserve currencies, one for the East and one for the West. - Stephen Leeb via King World News

Sunday, January 15, 2017

Well respected fund manager sees China raising gold price and using the metal to back Yuan for oil trading

John Hathaway of Tocqueville Gold Fund is a well respected analyst with over 45 years in the markets, and in precious metals.  On Jan. 13 he published his expectations for gold, currencies, and geo-politics in 2017, and is forecasting two interesting events to take place this year.


China looking to dominate world oil trade through a gold backed Yuan
Next is the incorporation of gold as a settlement currency to facilitate trade between oil-producing nations and the world’s largest hydrocarbon importer, China. Russia, Saudi Arabia, and Iran are settling most, if not all, of their energy sales to China in yuan convertible into physical gold via the Shanghai Gold Exchange. That flow represents a significant and growing percentage of international oil commerce, which in turn represents a dominant share of all commodities. - King World News
China preparing to radically reprice gold higher
We believe that this development has negative implications for the petrodollar system that has underpinned the dollar’s dominance in global commerce since the 1970s. Physical settlement, as opposed to paper (cash-settled) gold contracts, ramps up the migration of physical metal to Asian owners. Gold has become a reserve asset that is preferred to US Treasuries. Comments below by Xu Luode, chairman of the Shanghai Gold Exchange, show that the Chinese have made no secret of their strategy to internationalize the renminbi through gold convertibility in order to displace the US dollar: 
"Foreign investors can directly use offshore yuan to trade gold on the SGE international board, which is promoting the internationalization of the renminbi…Shanghai Gold will change the current gold market “consumption in the East priced in the West” situation. When China will have a right to speak in the international gold market, pricing will get revealed… (Xu Luode, speech to LBMA, May 2014)"
Since November of last year, the Shanghai Gold Exchange has already begun to disconnect its price fixing from the London and New York markets, with some daily spreads reaching as high as $49 per ounce.  This will continue to occur, and most probably accelerate in light of the revelations provided by Deutsche Bank and Wikileaks on the fact that Western banks have been manipulating the price of gold for decades.

Friday, December 30, 2016

Gold, Bitcoin, and the state of the dollar heading into 2017

As an observer of economic and geo-political events, we at The Daily Economist prefer to look at things more pragmatically rather than to make wild speculations in forecasts or predictions for a coming year.  But with certain realities beginning to unfold all across the financial spectrum in the last days of 2016, the groundwork appears to be in place for commentary and analysis on a few trends that could be taking shape.

Each of these trends are tied specifically to differing forms of currency or money, and their potential growth in economies both regional, and worldwide as the global financial system heralds immense change and the likelihood of new crises.

The advent of Donald Trump winning the U.S. Presidential election 50 days ago saw stocks, bonds, and the dollar react in ways not seen in the past three years.  And likewise the rest of the world reacted in nearly opposite fashion, with China and India bearing the brunt of America's artificially exploding markets.

And with this in mind it is a high probability that policies coming out of Eurasia and the Far East will dictate much of the monetary changes that the world will experience in 2017.

Gold:

Following the election of Donald Trump to the U.S. Presidency, gold and silver were summarily crushed around 16.5% in the Comex and in London, and began the separation in price between the Western paper markets, and the physical one run out of Shanghai.  And those spreads in price will only become greater than the average $25 - $50 divergence that is currently taking place due to high demand and lower supply of the physical metal.

And it is likely that sometime in 2017 China will seize sole control over price determination for gold and silver as more and more producers sell their metals directly to China and abstain from the manipulated futures markets run by London and New York.

Bitcoin:

Thanks to the extreme rise in the dollar to over 103 on the index, China has experienced severe pressure to its own currency and economy as it fights desperately to rein in capital flight of the Yuan from the Mainland.  And it has been through Bitcoin that many Chinese investors are using to funnel wealth out of China over the past three weeks, causing the price to surge to nearly $1000 from its support level of $640 late last month.

This rise in value will only increase in 2017 as investors in not only China but also in other countries join in and expand their use of the crypto-currency as a conduit to launder money from their local currency into others to then buy tangible assets that protect their store of wealth.

The fate of the dollar as the global reserve currency:


2016 was a banner year for nations and industries to move away from the dollar and conduct commerce using direct bi-lateral currencies.  And these trade agreements were only drops in the bucket to the advent of China expanding the use of the IMF's M SDR currency in international finance.

But China is setting its sights on bigger game, and began this last week when the Deputy General Manager of the Shanghai International Gold Exchange announced a program through which the Yuan currency will be expanded globally through its physical gold markets.  And all that remains is for China to call for the end of the uni-polar reserve currency that is the dollar, and open the door for nations to bypass it at will in a new gold backed trading mechanism underwritten by the Yuan.
The Chinese Yuan is linked to the US Dollar. With the US Dollar at these levels China has rapidly entered a financial crisis. 
In the last month, China has: 
1)   Burned through over $70 billion defending the Yuan.
2)   Had to halt trading in its multi-TRILLION dollar bond market.
3)   Had to issue emergency lending to financial firms to keep them afloat. 
ALL of these are linked to the US Dollar’s rise. And it’s lead the world to a very nasty situation. 
China has a couple different options, NONE of them are pretty for the financial system. 
Alternatively China could go for the “nuclear” option and demand that the US be removed as reserve currency of the world. 
This is not some crazed notion. China is the second largest economy in the world. And the Yuan is now part of the IMF’s SDR currency basket along with the Yen, British Pound and the Euro. 
I’m not saying the US Dollar would necessarily LOSE reserve currency status, but if China were to publicly call for this, the consequences would be severe.
As in, CRISIS severe. - Phoenix Capital Marketing via Zerohedge
The stage is set for a global change in the long-standing Bretton Woods uni-polar reserve currency system, and 2017 is shaping up to be the year for the end of dollar hegemony.  And the primary winners in this will be gold, silver, bitcoin, and the Yuan, with anyone holding paper investments denominated in dollars potentially losing a great deal of their wealth.

Tuesday, December 27, 2016

China's gold market now being used to back the expansion of the Yuan

The antiquated 'gold standard' now appears to not be the only way to back one's currency with a precious metal as a new program instituted by the Shanghai Gold Exchange (SGE) will soon aid in the expansion and internationalization of the Chinese Yuan.

Just prior to the Christmas break, the SGE launched a new English language website that has the primary purpose of allowing foreigners to access products and purchase gold in RMB.  And since the SGE is the world's largest physical gold market, this move has the two-fold effect of first allowing individuals to bypass London and the Comex if they have no interest in paper gold trading, and secondly to aid in the expansion and internationalization of the Yuan in global trade.

Last week the Shanghai Gold Exchange (SGE) launched a new English website to offer international customers more information and tools on trading gold in renminbi through its subsidiary in the Shanghai Free Trade Zone the Shanghai International Gold Exchange (SGEI). BullionStar took the opportunity to translate a speech by a Teng Wei, Deputy General Manager of the SGEI, named “How China’s Gold Market Can Help The RMB Achieve International Status” that was held at the Renminbi World summit in Beijing on the 29th and 30th of November 2016. In the speech Teng Wei outlined his vision for the SGEI going forward regarding renmibi (RMB) internationalization, connecting the onshore and offshore renminbi market and increasing gold market share. - Bullionstar via Zerohedge
weekly-sgei-sge

Graphic courtesy of Bullionstar

Over the past 45 days the Shanghai Gold Exchange has begun to disconnect itself from the global price standard set twice a day in London and New York by adding premiums of between $30 - $50 to their designated 'fix price'.  And by having a price spread of this magnitude so far above that of the Western paper gold markets, opening up a new portal for U.S. and European traders to buy gold, even in the Yuan currency, will lead to a massive increase in their market share of the global gold market and an ever expanding increase in transactions being done in the Chinese RMB.

Monday, October 31, 2016

Shanghai Gold Exchange expands reach into Dubai as the DGCX will now use Yuan benchmark instead of London or Comex

On Oct. 31 China's Shanghai Gold Exchange (SGE) signed an agreement with the Dubai Gold and Commodities Exchange to begin using their Yuan denominated price benchmark instead of the long-standing London and New York gold fix price.

In addition, this new agreement is just the first that the SGE is undertaking with commodity exchanges around the globe as the world's largest physical gold market begins to takeover pricing of metals in more markets.

SGE, world largest physical bullion exchange, says in other talks about similar cooperation 
Shanghai Gold Exchange and Dubai Gold and Commodities Exchange signed an agreement on Friday in Shanghai which makes the DGCX the first foreign exchange to use the SGE's renminbi-denominated gold benchmark. 
The SGE is in talks with other exchanges about similar cooperation, according to an SGE circular. 
SGE is the world's largest physical bullion exchange. The renminbi-denominated gold benchmark, also known as Shanghai Gold was launched in April this year. It is one of China's efforts to earn more say over pricing of the precious metal and increase its influence in the global gold market. 
China is among the world's largest producers, consumers and importers of gold, and it deserves pricing power that matches its position. It should have more say in an industry long dominated by London, which sets global spot prices, said analysts. - China Daily

Tuesday, August 23, 2016

Chairman of China's Gold Association confirms SDR just one step in the future backing of the Yuan with gold

Song Xin is the Chairman of China's Gold Association and has spoken strongly in the past of the need to see a return to a gold standard for global currencies.  And on the Association's website, Xin has a publication out where he suggests that the nation's push to internationalize the SDR basket of currencies is just one step of many towards the ultimate goal of a gold backed Yuan which will be the cornerstone of the Silk Road initiative.

Song Xin, Chairman of the China Gold Association, General Manager and Party Committee Secretary of the China National Gold Group Corporation: Stick to the gold mission and boost innovative development 
As the sole central enterprise in the gold industry, China National Gold Group Corporation is a firm defender of renminbi internationalization, pioneering demonstrator of the country’s “One Belt and One Road”, and faithful guardian of a happy life for people. It’s the direction that we should strive for. 
On March 10 during the two assemblies, Song Xin, Chairman of the China Gold Association, General Manager and Party Committee Secretary of the China National Gold Group Corporation, was the guest in Xinhuanet’s 2016 two assemblies special Interview. In the program Dialogue with New State-owned Enterprises and Cheer up in the “13th Five-Year Plan”, he proposed the conclusions above. Besides, in the in-depth dialogue, Song Xin systematically illustrated topics including the functions of renminbi internationalization, effectively enhancing gold supply, realizing improved quality and efficiency of enterprises, practicing the central party’s “Five Development Theories”, and fulfilling the responsibilities of central enterprises. 
About Gold’s Functions: Increase Gold Reserves And Accelerate Renminbi Internationalization. A Close Relationship between Increasing Gold Reserves And Joining The SDR 
When the credit lines of paper currency declines and there are enough gold reserves, people can be less worried about the existing credit system and enhance their confidence in the currency. 
Last year, China joined the IMF (International Monetary Fund) Special Drawing Rights (SDR), signifying the renminbi's march towards internationalization.
Song Xin pointed out that the renminbi is closely related to gold. Gold is priced in US dollars throughout the world and in renminbi in China. There is a special relation between the renminbi and gold. We have continuously increased gold reserves since China strove to join the SDR basket of currencies. By the end of February this year, our gold reserves have increased to 1788.45 tonnes. In other words, China has continuously increased its official gold reserves and publicized the amount to the world, keeping a close relation with renminbi internationalization and joining the SDR. - CNGold.Org.CN
China is moving fast and furiously towards a full scale internationalization of their currency in global trade and settlement, and as Koos Jansen notes in his own article on this...
I think for China the SDR is just a means to an end. The end being to internationalize the renminbi, which of course is connected to the dollars retreat. And as Song Xin clearly states, “gold forms the very material basis for modern fiat currencies” and, “gold reserves should become the cornerstone … for renminbi internationalization”.

Friday, July 8, 2016

The big winner in the Brexit vote may be China and the RMB

Prior to the UK Brexit vote two weeks ago, the City of London had already begun issuing Yuan denominated bonds to help begin the internationalization of the Chinese currency.  And with Britain choosing to break away from the oligarchical government that was being run out of Brussels, a new allegiance with China and their monetary system could aid in lessening Britain’s financial struggles, and make China the biggest winner in the Brexit outcome.
London’s role as a major offshore yuan hub is likely to survive Britain’s decision to leave the European Union, but the vote could help foster the Chinese currency’s internationalization by encouraging multiple yuan hubs in the bloc.
In the aftermath of the referendum, market-watchers and domestic Chinese media had raised fears London’s leading role as an offshore yuan hub would be undermined, potentially setting back Beijing’s efforts to internationalize the yuan.
But as the dust begins to settle, some bankers and analysts believe the pessimism was overdone. That is not to say there will not be an impact, but the move may encourage China to foster yuan trading in cities in mainland Europe and so expand the currency’s global footprint.
“We expect London to keep its status as the world’s largest foreign exchange center though some of the city’s other financial services may have the risk to be moved to other countries following Brexit,” said Andrew Fung, head of global banking and markets at Hang Seng Bank, adding FX trading is currently the key part of the yuan’s internationalization. - Sputnik News
chinadollar

Read more on this article here...

Saturday, May 28, 2016

World’s largest banking center isn’t in the U.S. or Europe, but in China

A new report came out on the recent rankings from S&P Global Market Intelligence that shows that China not only has the world’s largest individual bank, but with four of the top 10 financial institutions on the list they are also the world’s largest banking center.
The U.S. came in with only two banks in the top 10.
What is also interesting is that China is considered the world’s largest production economy, easily bigger than both the Eurozone and the U.S., who both rely upon consumption to hold their spots on top in global GDP.
chinadollar
Read more on this article here...

Sunday, May 1, 2016

Zimbabwe becomes newest economy to demand an end to sanctions against Russia

Earlier this week, a majority of France’s parliament voted to end their nation’s policy of Russian sanctions in light of a continuing deterioration in their economic output.  And on April 30 another economy, this one from Africa, joined its voice in calling for an end of trade restrictions against Russia that were forged out of Washington’s desire for a resurgence of a cold war against Moscow.
The condemnation of current and ongoing sanctions on Russia by the U.S. was provided by Zimbabwean Foreign Minister Simbarashe Mumbengegwi, who spoke out against Washington during trade talks with Russian Industry and Trade Minister Denis Manturov.
chna africa trade

Thursday, April 28, 2016

As Brexit vote draws near, London moving closer to China and to gold

The British people and the politicians who realize that their future no longer lies in the continental takeover that is the European Union also are beginning to see that their future may not lie in dollar hegemony, or a U.S. controlled monetary system.  This is because more and more they are coming to grips that the next arbiter of global monetary policy will probably come from China, and not the dying West.
On April 26, Mark Boleat, the City of London Corporation’s Policy Chairman, reported announced that the internationalization of the Chinese Renminbi was ‘here to stay’, and will be a significant part of Europe’s future for both capital and investment.
chinadollar

Sunday, April 17, 2016

China's gold accumulation has always been about strengthening the Yuan for global use

As many precious metal holders and investors watch with great interest for this Tuesday's expected announcement of a new Yuan denominated gold price, the rest of the world remains ignorant to the long-term reasons why China has been accumulating gold, and even pushing their people to buy the precious metal.  It is because as the Yuan becomes ready for greater international use in the very near future, gold has been the key for not only its foundation, but also the means to rocket the currency to the top in global use and trade.


More of China’s gold strategy was revealed by the recent launch of the Shanghai International Gold Exchange (SGEI) that offers gold trading in renminbi for clients worldwide, in an attempt by China to strengthen the internationalisation of the renminbi. In itself the SGEI clearly underlines China’s gold ambitions16, but the punch line was added with the launch of the Silk Road Gold Fund in 201517. Led by the SGE(I), the $16 billion fund will boost the gold industry along the Silk Road and in turn “will facilitate gold purchases for the central banks of member states to increase their holdings of the precious metal”, according to the Chinese state press agency Xinhua18. Not only is China trying to persuade all mining and consumption of gold along the Silk Road economic project to be settled through the SGEI in renminbi, additionally the Chinese promote gold as an essential component of central banks’ international reserves going forward. 
We must conclude that the State Council views gold as part of the coming international monetary system. Why else does it quickly develop the domestic gold market to be embedded in financial markets, surreptitiously accumulate vast gold reserves and establish a framework to boost gold business on the Eurasian continent around the SGEI? In my view, China contributes significant value to its gold strategy in the shadow of the apparent failure of the current fiat monetary system. And if true, China’s central bank having nearly 4,000 tonnes of gold is well on its way to introduce the next phase. - All China Review

Wednesday, January 27, 2016

Hedge funds and big players are buying gold behind the scenes as the metal is the best performing currency of he 21st century

The world is in the process of rejecting fiat currencies.  In China, investors and inhabitants are trying to get out of the Yuan as fast as possible.  And in a most interesting dichotomy, Bitcoin was the best performing currency of 2015.


However, all of these pale in relation to gold, which is by far the best performing currency in the entire 21st century.
Since the beginning of the 21st Century, as people awoke to Y2K that did not end the world, there has been one 'currency' that has outperformed all its peers in terms of preserving wealth and maintaining purchasing power...



Saturday, January 16, 2016

Got Karatbars? Gold is a protection against currencies, and why China may be the one to open the floodgates

For more than five years, the global financial system has been weighed under by a currency war that shows no sign of stopping.  It is one of the primary reasons why central banks have resorted to zero or negative interest rates, and why countries like Japan have initiated a policy of endless QE.

But as we know in the gold markets since 2011, something or someone has been carefully creating a disconnect between the monetary metal and its checks against fiat currencies like the dollar.  And it is one of the primary reasons why gold prices have not only declined 40% from their all-time highs in 2011, but have also lost its luster to most investors who only see gold as a commodity to be bought and sold like a security or stock.


Yet over in China and Japan, gold is not manipulated by their government or their central banks, and is reflected fairly correctly in price in relation to the Yen and the Yuan.  And as China mulls the proposition of devaluing their currency another 10-15% in the coming months, gold, more than stocks or bonds, is proving to be the best investment for citizens within the 2nd largest economy in the world.


Finally, the real purpose of the PBOC's exercise in FX management today was, just like in August, to fire a warning shot at the Fed's rate-hiking plans. Only this time the warning shot is far, far louder. 
In September the Fed postponed its rate hike as a result of China's devaluation. Will it do the same again next week? Because if China is about to unleash a 15% deval of the CNY against the entire world, expect a flood of Chinese FX reserves as the PBOC tries to control the glidepath of its currency, and avoid an all out collapse driven by soaring capital outflows. 
In other words, we are now right back where we were in mid-August, just before the bottom fell out of the market.
"The biggest risk in China is not really the economy," said Qian Wang, senior Asia economist for Vanguard Investments Hong Kong. "The real risk is, number one; the policy uncertainty, and number two; the currency. China is walking on eggshells."Chinese citizens, meanwhile, are anxiously awaiting tomorrow’s market open while mentally repeating the same three lines:
  •  Sure am glad I bought that gold last year. 
  • Wish I’d bought more gold last year. 
  • Wonder what I’ll have to pay for gold next week… - Zerohedge





So with China signalling a new devaluation, and the U.S. Federal Reserve speaking on Friday of not only retracting the interest rate hike they did in December, but perhaps even taking rates down into negative territory, how can you protect yourself from this paradigm of currency devaluation that will not end until many if not all of these currencies end in collapse?

With the very thing that as we see above increases in value as paper money declines.  Gold.

And the best way to buy it and protect your wealth in any currency this is with a company called Karatbars



Buying gold through Karatbars is one of the easiest things on the net.  In fact, the business model of Karatbars is to sell gold in affordable quantities, such as 1, 2.5, and 5 gram increments, and allow customers to get into the metal without having to shell out $1200+ for a single ounce coin.

And as added perks to signing up with Karatbars, as a customer or affiliate, Karatbars is working on a new e-wallet system that functions just like an offshore bank account, and is outside the authority of the banking system.  From there, you can take your fiat currency in any denomination... dollars, euros, yen, etc... and purchase physical gold which can either be delivered directly to you, or stored for free at one of Karatbar's vaults.

Additionally, any gold that you buy can easily be sold back to Karatbars, or any metals dealer, and if with Karatbars it is then exchanged for currency that is uploaded to you through a pre-loaded debit Mastercard which is connected directly to your e-wallet.  And as we know, MasterCard is recognized in nearly every country around the world, and usable in any currency that accepts it.

But perhaps the best feature with Karatbars is their affiliate program, where you can earn money off commissions from getting others to sign up and become a customer or affiliate.  Not only do you receive commissions from their purchasing of physical gold, but you also earn commissions from anyone who buys a commission package, with that money going directly into your debit MasterCard when you have enough units to cycle.

Imagine the ability to earn the money in which to buy your gold savings simply by purchasing a commission affiliate package one time, and then getting others to sign up and do the same thing.

How many businesses or entrepreneurs can build an infinite business with spending less than $400 of their own money?  And there is never a mandatory requirement to buy beyond what you desire, on your own schedule.  And there is nothing to lose, because you're using money (paper dollars) to buy gold (physical money) and in the end you don't lose a thing.


The global financial system, along with dozens of respected economists, are telling us that now is the time for the end of our current form of money, and the beginning of the transition into a new monetary system that is expected to be backed by gold.  And with banks, governments, and even Harvard professors mandating that central banks have no choice but to eliminate cash from usage by the people to stave off collapse, will you wait until it is too late to make a decision on how you will protect your wealth, and be able to function within the coming new monetary system?

To learn more about Karatbars, you can contact the individual who sent you this article, and click on their referral link to open a free account and begin buying, or building your own gold savings or business with the company of the future.

Friday, January 8, 2016

China dumps $108 billion in reserves as the Far East economy uses dollars to protect currency

In overnight trading, China experienced an equities meltdown following their largest devaluation of the Yuan since August.  And at the heart of protecting the RMB in this trend of currency intervention is a new report on Jan. 7 which shows that the Far Eastern economy dumped $108 billion in dollar reserves in the month of December, dropping their reserve totals from $3.438 trillion to $3.330 trillion.
Much of this devaluation, equity declines, and dollar dumping are in response to the growing global recession that is not only hitting most emerging markets, but has daisy chained over to Europe and the U.S. where China is now the tail that wags the dog, and for the most part dictates the actions and reactions of the rest of the world that follows their market results.

Thursday, January 7, 2016

China stock markets halt completely after Yuan devaluation

It appears that the new Chinese circuit breakers came at just the right time as the Shanghai equity markets triggered a halt on Jan. 7, leading the Far Eastern power to close down the markets altogether after just 30 minutes of trading.  This is the second circuit breaker halt in three days for China, which implemented the market protection at the start of the new year.
What appears to have been the catalyst for this market collapse was a devaluation of the Yuan, which was dropped by the PBOC the most since last August.