We agree that $2,000 gold is in the realm of reality. We just aren’t sure what our world will look like. The scary part is $5,000 gold. Will there be any Federal Reserve Notes, called “dollars”, to measure gold in that manner? Will it be 5,000 yuan gold or 5,000 ruble gold? Only time will tell how gold will be measured, but my guess is, dollars, Federal Reserve Notes, will not be in the cards. If you don’t think the dollar is going to change, and change dramatically, simply look at the 2 year and 10 year Treasury Notes – the primary vehicles used by the Federal Reserve to generate all the fake currency for all the QE.
Concerns over a possible recession, sparked by the recent inversion of the yield curve for the 2-year and 10-year Treasury yields, some weak global economic data, and the U.S. Federal Reserve’s first interest-rate cut since 2008, have dressed up gold’s appeal as a haven.
But Stan Bharti, chief executive officer of private merchant bank Forbes & Manhattan, doesn’t believe that gold is moving up because of short-term market fears. It’s a move that’s been a long time coming.
After the 2003-2004 period, “hard assets were in demand as the ‘smart money’ was looking away from stocks and into gold to protect themselves,” said Bharti. Then in the “last 8-10 years we’ve seen a bull market in stocks and lived in a low-interest-rate environment. That is dangerous for inflation.”
Given that backdrop, he expects gold prices to top $2,000 by the end of next year. That would be a record for Comex futures. More near term, Bharti sees gold jumping from $1,480 to $1,600 in the next quarter. Source
Once gold breaks out, with China and Russia working hand-in-glove to create some type of gold trade settlement note, everything will change. China just announced they are, in fact, rolling out a cryptocurrency in the very near future. This is now the second time that China has publicly discussed launching a cryptocurrency. We believe this will happen before years end – pure speculation on our part, but we stand by our bet based on China’s recent history of announcing major policy changes.
The flagship newspaper of the Chinese Communist Party (CCP) says the People’s Bank of China’s (PBOC) launch of a statutory digital currency will have a “breakthrough,” “revolutionary” significance for the international monetary system.
Mu Changchun (穆长春), vice-head of PBOC’s payments and settlements department, said at the China Financial 40 Conference on 10 August that the release of a digital currency by the Chinese central bank was “imminent.”
In an article published on 14 August by the People’s Daily website Sun Zhaodong (孙兆东), senior economist at the China Construction Bank University’s Fintech and Big Data Research Academy, said that the “launch of a digital currency by China’s central bank possesses major, breakthrough significance.”
“”It not only refers to digitisation of money under the existing monetary system, but also the launch of a completely new cryptocurrency system based on new internet technology, and in particular blockchain technology,” said Sun. Source
We are waiting for Russia to make a similar announcement as China has made regarding a cryptocurrency. We have speculated that Russia has their own cryptocurrency awaiting launch. We believe that day is rapidly approaching.
If you think this is not another step in the direction of de-dollarization you need to pay closer attention. The situation is very fluid at this point and it seems the blockchain / cryptocurrency created and launched by China is very much a part of what is coming. China, also just announced, no more private gold inflows will be allowed. Only internally mined gold will be available to the citizens of China. This is another signal that China is getting serious about the trade war, dumping the Federal Reserve Note and attempting to get a better handle on the flow of yuan out of the country.
As Reuters details, the bulk of China’s imports – from places such as Switzerland, Australia and South Africa and usually paid for in dollars – are conducted by a group of local and international banks given monthly import quotas by the Chinese central bank. But quotas have been curtailed or not granted at all for several months, seven sources in the bullion industry in London, Hong Kong, Singapore and China said.
“Gold going in is money going out,” said one of the people, adding that Chinese buyers tend buy dollars to pay for metal.
“It’s all linked to what’s going on in terms of how the central bank is handling the currency,” the person said. Source
Why would China stop the flow of yuan / Renminbi out of the country? Why? Because people with real wealth in yuan understand the currency is being devalued on an ongoing regular basis. This means their personal wealth is destroyed every time the yuan / Renminbi is devalued. It hurts China’s Central Bank, the same as it hurts the Federal Reserve Bank here in the U.S., every time a person converters their currency into gold, period. Every time you add another 1/10 ounce of gold, 1/4 ounce of gold 1 ounce of gold to your stack you are telling the Federal Reserve to go pound sand! China has ordered their citizens to stop doing this to the Peoples Bank of China – central bank.
