More Versions of the Gold Backed Yuan Story Appear.
Germany Become World’s Largest Gold Consumer.
China on Lockdown as Communist Party’s Central Planning Committee Meets.U.S. Mint Gold and Silver Sales Continue to Languish.
Goldman Sachs Talks Cryptocurrencies
U.S. Mint Gold and Silver Sales Continue to Languish.
Goldman Sachs Talks Cryptocurrencies
Does Gold Make You Smart?
Video Commentary to “The Gold Backed Yuan Story Forks Again as More Cracks Appear in the Story”
Top Stories:
Reported on September 1 in the Nikkei Asian Review:
China sees new world order with oil benchmark backed by gold
“China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry.”
This story cites no source and merely states “China is expected” Expected by whom? The story doesn’t say and proceeds as if the gold backed/gold covertible Yuan is a fact.
The only official release relating to the story is China is planing to launch a Yuan denominated oil futures contract. No mention of gold. There is no mention of gold backing or exchangeability on the SGE. But alt media has run with the gold backing as the next story to hype.
FAKE BUT ACCURATE
Different Versions of the Gold Backed Yuan Story
1. Gold Backed Yuan. This version would drain gold from China. Why would China offer essentially to pay in gold when they have $1.2 Trillion in dollars to spend on gold? The story doesnt hold because gold can’t be exported from SGE, so it would have to come from PBOC reserves.
2. Not gold backed by SGE or PBOC gold but gold sourced by China from London (DRAINS WESTERN RESERVES – GOLD $13,000!!)
3. Series of contracts – Oil producers sell oil in Yuan, buys gold on SGE, sell short on SGFE to hedge price. (price of gold remains stable and no “gold backing”, just paper gold traded) The gold trade is essentially a wash trade with no real impact on the price. And currently, the gold would have to remain on the SGE.
Ironic, is that the implicit in this arrangement is the oil producer would want to hedge again the volatility of the gold price in fiat/dollar terms.
UPDATE- soon after this blog post was published I received these tweet making scenario three even more implausible
Btw, if one buys gold with RMB on SGE and then hedge in China, the hedge is denominated in RMB, so one is still exposed to RMB price.
— Koos Jansen (@KoosJansen) October 8, 2017
AFAIK the SHFE doesnt offer gold futures to foreigners, only on the SGEI can foreigners short “Au(T+D)”.
— Koos Jansen (@KoosJansen) October 8, 2017
The SHFE is a pure CNH (onshore yuan) market. On the SGEI CNH and CNY (on & off shore) can be used. pic.twitter.com/W2hxYxqAk5
— Koos Jansen (@KoosJansen) October 8, 2017
This arrangement is significant in that it could help the Yuan gain more “currency” in the international markets. It’s less significant, however, from the perspective of adding real gold demand. If current oil producers wanted to buy gold with their dollar proceeds they could. Accepting Yuan for oil, perhaps makes it more likely that they might want to by “gold” rather than hold Yuan.
Calling the arrangement above “gold backed” is a misnomer.The arrangement is not the same as swapping oil for gold. Its essentially dumping Yuan for a gold contract (denominated in YUAN!).
For example, if Saudi Arabia sells oil to the US and uses the proceeds to buy wheat futures on a US Exchange to hedge against rising food prices, no one would call that a Wheat-Backed Dollar.
Despite Jim Rickards writing on September 27, “China just announced that any oil-exporter that accepts yuan for oil can convert the oil to gold on the Shanghai Gold Exchange and hedge the hard currency value of the gold on the Shanghai Futures Exchange”, Egon von Greyerz notes (see below)- NONE of this has been confirmed. We have see no such announcement.
Another gold commentator, ALasdair Mcleod of Gold Money, was cited as saying “the Gold backed yuan was in the planning for a long time and originally it was going to be launched at the beginning of this year, it has been delayed the latest information we have is… the contract will be launched by the year end, we don’t actually know when and it may be delayed even further.”
Without sources, it’s hard to believe any of the different gold-backed/gold convertible Yuan stories.
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Gold and silver.
Gold closed last week at $1279.40 an ounce and closed this week at $1276 -0.1 %
Silver closed last week at $16.63 an ounce and closed this week at $16.81 +1%
The gold and silver ratio ended the week at 75.91:1
Gold and silver are not the same metals, they have different properties and different uses. Relative rarity is not the only determinate in arrive at price.
Silver is a spike and dive metal.
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Tweets of the Week
PBOC boost gold reserves from 1843Ts worth $77b to 5K/ $208B or 10Kts/$417B so what? 10 tons @3X the price to $3900 peroz=$1.2T=UST holdings
— Smaulgld (@Smaulgld) October 1, 2017
Here is how China "plans" and "plays the long game" Art of war my asshttps://t.co/yjwIlb2ju2
— Smaulgld (@Smaulgld) October 1, 2017
somewhat of but not a tight analogy
bitcoin= 24K gold
bitcoin cash= 9K gold
all other coins – 1-9 K or gold plate— Smaulgld (@Smaulgld) October 1, 2017
Goldman Sachs is weighing a new trading operation dedicated to #bitcoin, other digital currencies https://t.co/Qt5GJZ8rEQ via @WSJ
— Smaulgld (@Smaulgld) October 2, 2017
Still thinking about #Bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.
— Lloyd Blankfein (@lloydblankfein) October 3, 2017
Soon, sell your ancestral #gold over BSE-like exchange https://t.co/QpIKiGbZb6 via @FinancialXpress
— Smaulgld (@Smaulgld) October 2, 2017
Salvage firm hopes to net #gold worth £125bn sunk by German U-boats https://t.co/ZpWxNL42tz
— Smaulgld (@Smaulgld) October 2, 2017
From Shanghai International Energy Exchange:Crude Oil Futures’ Across-the-Market Testing. NOTHING to do with #GOLD https://t.co/iyQLxB0Ufh
— Smaulgld (@Smaulgld) October 2, 2017
I have a contact in alt financial media in the US that says we run out of silver in 2016, the dollar dies in 2015, comex defaults in 2013
— Smaulgld (@Smaulgld) October 2, 2017
BREAKING ALERT SHOCK THE WORLD ROCK GLOBAL MARKETS:
China's Move To #Gold May Ignite WWarIII=Gold Yuan Story is BS https://t.co/461NcfTHSr— Smaulgld (@Smaulgld) October 3, 2017
As we have been noting, the "Dumping Treasuries" story is more than six months old – But GOLD BACK YUAN! LOL https://t.co/8VryKWIVdD
— Smaulgld (@Smaulgld) October 3, 2017
Strategist predicts #bitcoin, digital currency trading volume will 'soon surpass' Apple'shttps://t.co/zoCZtVLoEu
— Smaulgld (@Smaulgld) October 3, 2017
They will run out of corporate bonds to buy just when the Fed starts unwinding its balance sheet
— Smaulgld (@Smaulgld) October 3, 2017
and that is China's plan, boost the Yuan to slow their economy to a crawl so they can buy less oil (but with GOLD!) ROTFLMAO
— Smaulgld (@Smaulgld) October 3, 2017
ALERT! US Mint #Silver Sales down as investors switch funds to "Gold Backed Yuan" analysts say
— Smaulgld (@Smaulgld) October 3, 2017
China in 'lock-down' ahead of most important meeting in years https://t.co/OcCJ8XHoIU
No worries China has GOLD/will Launch GOLD BACKED YUAN— Smaulgld (@Smaulgld) October 6, 2017
Perth Mint workers feel unsupported over proposed bra ban #gold https://t.co/AXteyT7xPA via @ABCNews
— Smaulgld (@Smaulgld) October 5, 2017
Explain how the story in the Nikeii Asian Review came about-who contacted whom? Were you approached about a gold backed yuan announcement?
— Smaulgld (@Smaulgld) October 5, 2017
https://t.co/6rLWksgZkR
Grant "It's a strategic move swapping oil for gold" LOL sure it is
"China is expected" by WHOM- load of BS— Smaulgld (@Smaulgld) October 5, 2017
How is it that a journalist in Indonesia manages to track down Luke, Alasdair and Grant for an interview for what "China is expected" to do?
— Smaulgld (@Smaulgld) October 5, 2017
Why Won't China Launch a #Gold Backed Oil Futures Contract?
— Smaulgld (@Smaulgld) October 3, 2017
.@Thejacka_lope @LukeGromen @DavidBCollum multiple QUOTES but NO SOURCES in the Asian Nikkei Review BS story https://t.co/6rLWksgZkR
— Smaulgld (@Smaulgld) October 5, 2017
"They keep praying for the collapse of the dollar to make gold go up. " Martin Armstrong https://t.co/dkObhJNpID
— Smaulgld (@Smaulgld) October 6, 2017
"We don't need lies to make a case to invest in gold." via @KoosJansen
Gold Backed Yuan, COMEX Default, Sovereign Sized Gold Buy in 45 days— Smaulgld (@Smaulgld) October 6, 2017
WOW BREAKING! ALERT! GOLD BACKED YUAN! ROCK THE GLOBAL MARKETS SHOCK THE WORLD! I am in full hysteria mode now- where do I send my money? https://t.co/ivPKWBDDu0
— Smaulgld (@Smaulgld) October 6, 2017
ALERT! from KWN & Egon von Greyerz
WE DONT HAVE GOLD BACKED YUAN CONFIRMED YET! LOLOLOLhttps://t.co/4CmPbZxdi2 @KoosJansen— Smaulgld (@Smaulgld) October 7, 2017
Most of the "gold" the "smart" Germans buy is in "The gold-backed exchange-traded commodities market" https://t.co/EvfEjEwWa2 @MarkTOByrne https://t.co/ZgkQMA4tJU
— Smaulgld (@Smaulgld) October 6, 2017
Rickards says Yuan convertable to gold was "announced" https://t.co/a5HnhnBfLt
Must be some "inside source"?— Smaulgld (@Smaulgld) October 7, 2017
Wake Up America – The Dollar Is Going To Zero (and YOU ARE GOING TO DIE TOO) https://t.co/PNRIHeLFYM
— Smaulgld (@Smaulgld) October 7, 2017
As discussed here: The bubble js in ICOs not #Bitcoin/#Litecoin https://t.co/3788hseHVk https://t.co/8OwZGnYlG9
— Smaulgld (@Smaulgld) October 7, 2017
Why Fidelity Is Mining #Bitcoin and #Ethereum? https://t.co/3F6k2rkfCs
and WHY NOT #Litecoin?!— Smaulgld (@Smaulgld) October 8, 2017
Gold sourced Outside China
What happens when $1.8T in Chinese imports (50%+ commodities) begins settling in gold ($120b/yr annual production)? https://t.co/jPWQWQnNAE
— Luke Gromen, CFA (@LukeGromen) October 7, 2017
Rickards from SGE
JR #Gold Backed Yuan version:
1.Oil producers sell in Yuan
2.OP buys gold w/YUAN on SGE
3.OP hedges gold on SGFEhttps://t.co/u4BCK1mbZe— Smaulgld (@Smaulgld) October 8, 2017
THIS is NOT a gold backed Yuan.
The gold can't leave the SGE and it is what gold bugs call "paper gold" https://t.co/WlyUfNIcOH— Smaulgld (@Smaulgld) October 8, 2017
Gold Makes You Smart:
Jim Rickards:are the chinese stupid or do they see something most people don’t
Insider info: “They are definitely not stupid, I spent time in China, know a lot of people there, they know what they are doing”
Here are the stories we wrote, followed or commented on:
October 2, 2017
Fed Chatter
Fed’s rate hikes causing low inflation, Kashkari says
US Economic Data
US Mfg PMI 53.1, Exp. 53.0
US Mint Sales Update
U.S. Mint reported selling 100,000 American Silver Eagles and 1,000 American Gold Eagles today.
MTD American Silver Eagles sold 100,000 & American Gold Eagles sold 1,000
YTD American Silver Eagles sold 15,998,500/American Gold Eagles sold 171,000
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
BGASC.com
Golden Eagle Coins
SD Bullion
Money Metals Exchange
The U.S. Mint reported selling 500 American Gold Buffalo coins.
MTD 500 sold
YTD 77,000 sold
The U.S. Mint sold 0 of the first America the Beautiful Coin of 2017 today – the Effigy Mounds National Monument coin. YTD Effigy Mounds ATB coins 35,000. The US Mint sold 0 Frederick Douglas National Historical Site ATB coins and 0 of the Ozark National Scenic Riverways.
The US Mint sold 0 Ellis Island ATB coins today
Total YTD ATB coin sales 35,000 Effigy Mounds National Monument coins, 20,000 Frederick Douglas National Historical Site, 20,000 Ozark National Scenic Riverways ATB coins and 40,000 Ellis Island ATB coins. Total 115,000
October 3, 2017
From Smaulgld.com
SEPTEMBER SILVER EAGLE SALES CRASH TO UNTHINKABLE LOWS
October 4, 2017
From Smaulgld.com
GOLD EAGLE SALES REMAIN GROUNDED IN SEPTEMBER
US Economic Data
ISM Non-mfg 59.8, Exp. 55.5
Markit Services PMI 55.3, Exp. 55.1
ISM Non-mfg Prices 66.3, +8.4
US Mint Sales Update
U.S. Mint reported selling 100,000 American Silver Eagles and 500 American Gold Eagles today.
MTD American Silver Eagles sold 150,000 & American Gold Eagles sold 1,500
YTD American Silver Eagles sold 16,048,500/American Gold Eagles sold 171,500
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
BGASC.com
Golden Eagle Coins
SD Bullion
Money Metals Exchange
The U.S. Mint reported selling 500 American Gold Buffalo coins.
MTD 1,000 sold
YTD 77,500 sold
The U.S. Mint sold 0 of the first America the Beautiful Coin of 2017 today – the Effigy Mounds National Monument coin. YTD Effigy Mounds ATB coins 35,000. The US Mint sold 0 Frederick Douglas National Historical Site ATB coins and 0 of the Ozark National Scenic Riverways.
The US Mint sold 0 Ellis Island ATB coins today
Total YTD ATB coin sales 35,000 Effigy Mounds National Monument coins, 20,000 Frederick Douglas National Historical Site, 20,000 Ozark National Scenic Riverways ATB coins and 40,000 Ellis Island ATB coins. Total 115,000
October 5, 2017
From Smaulgld.com
PERTH MINT SELLS NEARLY SIX TIMES MORE GOLD THAN THE U.S. MINT IN SEPTEMBER
US Mint Sales Update
U.S. Mint reported selling 0 American Silver Eagles and 1,000 American Gold Eagles today.
MTD American Silver Eagles sold 150,000 & American Gold Eagles sold 2,500
YTD American Silver Eagles sold 16,048,500/American Gold Eagles sold 172,500
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
BGASC.com
Golden Eagle Coins
SD Bullion
Money Metals Exchange
The U.S. Mint reported selling 0 American Gold Buffalo coins.
MTD 1,000 sold
YTD 77,500 sold
The U.S. Mint sold 0 of the first America the Beautiful Coin of 2017 today – the Effigy Mounds National Monument coin. YTD Effigy Mounds ATB coins 35,000. The US Mint sold 0 Frederick Douglas National Historical Site ATB coins and 0 of the Ozark National Scenic Riverways.
The US Mint sold 0 Ellis Island ATB coins today
Total YTD ATB coin sales 35,000 Effigy Mounds National Monument coins, 20,000 Frederick Douglas National Historical Site, 20,000 Ozark National Scenic Riverways ATB coins and 40,000 Ellis Island ATB coins. Total 115,000
US Economic Data
October 6, 2017
From Smaulgld.com
Fed Chatter
Dudley: Inflation Weak on Temporary Factors, Will Rise Back to 2%
Unemployment Is ‘Low,’ Job Gain Trend Is ‘Sturdy’
US Economic Data
October 7, 2017
From Smaulgld.com
A TALE OF TWO MINTS – US AND PERTH MINTS POST FAR DIFFERENT SILVER SALES
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Compare American Silver Eagles for sale at:
BGASC.com
Golden Eagle Coins
SD Bullion
Money Metals Exchange
Donate To Smaulgld.com via paypal
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
BGASC.com
Golden Eagle Coins
SD Bullion
Money Metals Exchange
Compare American Silver Eagles for sale at:
BGASC.com
Golden Eagle Coins
SD Bullion
Money Metals Exchange
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