Foreign experts suspect that China manipulates the gold market?

Hedge funds, PhD statisticians say the gold market is "the most sensible manipulation case"

Doctor: "Statistically impossible, unless there is manipulation"

Gold is a political chip on the world financial scene

Prices are being suppressed until China gets the gold it needs

Gold will rise as all central banks face the next global liquidity crisis.

"When this happens, physical gold may not be available at all.

Jim Ricks: Golden Conspiracy

Is there a gold price manipulation? Absolutely. no problem. This is not just an opinion.

In addition to anecdotal evidence and forensic evidence, there are statistical evidence to report cases. In fact, the evidence is clear.

These are the public parts of Jim Rickards's The Golden Conspiracy, and even the most experienced followers in the gold market may be pleasantly surprised.

Gold and silver price manipulation is not a new topic for ordinary readers. Over the years, the idea that the precious metals market is not only affected by free market forces has been ignored by the mainstream. Many people refer to gold and silver manipulation as the subject of conspiracy and in-depth web forums. Although there is evidence to the contrary.

In the past eighteen months or so, the manipulation of manipulation as an anecdote was denied, and regulators and legislators finally considered it to be a very real and serious matter. The fine was paid and the regulator gradually began to implement the new regulations.

But what if you manipulate an organization that exceeds the account you can call? Can they be fined? Can it be controlled by the authorities? What if a country implements this manipulation? Ricks thinks this is the case.

“...where does the maneuver come from? There are some doubts, but you need to look at China first.”

The role of China

In the past, we were excited about China's role in the gold market. In April last year, they launched a gold bar transaction denominated in RMB. We expect this to not only further enhance its strength in the global gold and foreign exchange markets, but also increase transparency and price manipulation.

However, China not only strengthens market transparency for its long-term interests, but also has short-term goals to increase gold reserves.

Ricks explained:

China wants to do what the United States does, that is, to maintain the currency standard, so that the renminbi is important enough in world finance and trade, so that China can influence the behavior of other countries.

The best way to do this is to increase its voting rights in the International Monetary Fund and include the renminbi in a basket of currencies in which the International Monetary Fund determines the value of SDRs.

In September last year, the International Monetary Fund increased the proportion of the renminbi in a basket of currencies, and China completed the work.

The rule of the game is that you need a lot of gold to play, but you don't know gold or open discussion. The most important thing is that you don't treat gold as money, even if gold is always money.

Club members keep gold in case, but on the other hand, publicly devalue it, pretending that it has no role in the international monetary system. China is expected to do the same thing

Gold is a political bargaining chip on the world financial scene. This does not mean that you automatically own the gold standard, but having gold will allow you to make a sound between the players in the main countries sitting at the table.

For example, Russia has one-eighth of the gold in the United States. It sounds like they have a little gold power, but their economy is only one-eighth. Therefore, their gold and economic scale are compatible. Recently, Russia has increased its gold purchases.

US gold reserves are calculated at market value, less than 3% of GDP. This number varies with the price of gold. For Russia, the two are the same. For Europe, gold is even higher - more than 4%.

In China, the official figure is about 0.7%. Unofficially, if you give them credit, say 4,000 tons and raise them to the level of the United States and Russia. However, as the economy is still growing, they are hoping for even higher levels, even at a much lower level than before.

Where is the evidence in this regard?

As we have explained before, manipulation is often seen as a conspiracy and anecdotal-driven theory. But Ricks has academic evidence:

I have talked to a doctoral statistician who is one of the largest hedge funds in the world. I can't name the fund, but it is a household name. You may have heard of it. He has been paying attention to the opening and closing prices of COMEX (the main market for gold) for 10 years. He is amazing.

He said that this is the most sensible manipulation case he has ever seen. He said that if you enter the after-sales market, buy after the close, sell it before the opening every day, you can make a risk-free profit.

He said that this is statistically impossible unless there is manipulation.

I also spoke to Professor Rosa Abraz-Mes of New York University's Stern School of Business. She is a leading expert in the study of global price manipulation. She will actually testify in the gold manipulation case.

She wrote a report and reached the same conclusion. This is not just an opinion, it is not just a profound dark conspiracy theory. This is a doctoral statistician and a well-known market expert lawyer, a court expert litigation witness, who independently reached the same conclusion.

Are they sure to be honest?

Some may think that given China's resources and its ability to grow in the physical gold market, the country will be able to purchase all the resources it needs. No need to do anything dark.

Ricks thinks this is impossible:

This is the problem: If you open the lid of gold, end the price manipulation, and let gold find its price, China will be left behind. Compared to other countries, it will not have enough gold, because the price of gold will soar, so they will never get enough gold. They can never catch up. All other countries will be in the car, while the Chinese are not present.

When you have this assumption, China is the second largest economy in the world when everyone is sitting at the table. They must be in the car. This is why global efforts are to maintain the price of gold through manipulation. I tell people that if I am manipulating, I will feel embarrassed because it is obvious now.

Prices are being suppressed until China gets the gold it needs. Once China has received the right amount of gold, the upper limit of gold can be removed. At that time, the gold trend was not important because all major countries would be on the same boat. But now, they are not, so China must catch up.

I have described some catastrophic scenarios in which the world turned to special drawing rights or gold, but at least for now, the United States wants to maintain a dollar-based standard. At the same time, China feels that the dollar is very fragile. If we let the dollar depreciate, it is a huge loss for them.

China has recently sold a portion of its dollar reserves to support its own currency and is under tremendous pressure. But it still has a lot of dollar reserves.

Banknotes and gold, we let paper money inflation, they can make up for gold. So they have to get a hedge position.

China has been saying, in fact, "unless we have gold, we are only uncomfortable with these dollars. But if we remain transparent about gold purchases, prices will rise too fast. So we need Western power to keep prices down. Rising, helping us get gold until we reach the position of the hedge. At that time, maybe we can have a stable dollar.

China is not the only one

We know that banks like to play with the gold market, but China is not the only country. Russia and China share a common goal. Together they are not only essential to the physical gold market, but also to the overall structure:

The current price of gold is determined in two places. One is the London spot market, controlled by six major banks, including Goldman Sachs and JPMorgan Chase. The other is the New York gold futures market controlled by COMEX, managed by large clearing members and also by major Western banks.

In fact, the Great Western Bank monopolizes the price of gold even if it does not monopolize the physical gold. But this may be about to change.

Russia and China have not only established physical reserves, but are also exploring and establishing trading systems that allow price discovery and leveraged trading.

It may take a year or so to attract liquidity, but once these new exchanges are fully operational, the physical gold market will regain its price.

Then gold will begin to move toward a state of currency with an implied non-deflationary price of $10,000 per ounce.

How to turn a problem into an opportunity

Whether it is precious metals, interest rates or foreign exchange, manipulation is across many markets. No one is harmed at any time. Both individuals and companies have experienced a loss of investment and are the result of direct and indirect manipulation.

It may be frustrating to hear this, and many investors may ask whether it is likely to be as frustrated as the paper money market when investing in gold and silver. Of course, they may rise to $10,000, but even then, can it be prevented from being manipulated?

The person concerned should take a step back and look at the bigger scene. In fact, it is an opportunity and not just a problem. Curbing prices means a huge opportunity for investors to accumulate more gold. For those who want to manipulate the price, the irony is that this is good news for those who are eager to store on gold and silver.

In the long run, Ricks firmly believes that when China reaches the target of 10,000 tons of gold reserves, surpassing the United States, we will see large fluctuations in gold prices. At this time, China's interests are more transparent, so that the price of gold soars. This is another way to show that the value of the dollar is a free fall.

(Editor: Fang Fengjiao HF055)