We continue our research about the Gold price suppression: who is doing this manipulation and why. With Bitcoin crossing $1000 and other crypto-currencies going parabolic we can see the hunger for the FIAT alternatives. We think that despite all very positive developments introduced by Bitcoin it is in a Bubble stage now due to its unbelievable vertical rise. Its bust will bring attention back to Gold and Silver and next step will be the introduction of crypto-currency backed by Gold - it will be the real game changer.
So far China is using all these games with Gold price suppression to accumulate Gold and this year we see the record buying. Announcement of its Gold reserves can bring the very sobering reality to the financial markets. China will not accept Bitcoin for its Treasury redemption and it is not going to increase its reserve holding any more. US Dollar is losing its Reserve Currency of choice status and all recent "flyover games" just confirm U.S. financial vulnerability in line with Sirya and Iran developments.
Peter Schiff: On Taper, China's Bombshell Announcements For Treasuries, Dollar And Gold GLD, MUX, TNR.v, GDX
"Peter Schiff talks about the bombshell of the year - China has announced the Mother Of All Tapering - PBOC Says No Longer in China's Interest to Increase Reserves. China is ready to reduce its balance sheet and they do not have to sell any US Treasuries - during the operation Twist they have used the golden opportunity and rolled over the long term treasuries into the shorter maturities. China can just allow US to repay maturing US Treasuries. We do not think here that they will accept Bitcoin. They have made this announcement after the record buying of Gold and some people are estimating that official Gold reserves are much higher than officially recognised today.
It means that if China leaves to its commitment - there will be no China's bid for US Treasuries of MBS - how FED can Taper now? They will have to increase the amount of QE just to keep the market from falling! US Dollar will go down with rising Interest Rates and additional strain on the economy and fiscal budget and Yuan will appreciate - and it was another bombshell: China will allow it to do so now.
Market is still in over dose mood with Bubbles popping everywhere and All-Time-Highs and does not pay any attention to this news. But US Dollar continues to print very Bearish candles on Daily chart below and next few weeks will show the magnitude of this Chinese move for the global finance system. Gold will benefit the most from this shift once the Market will realise the magnitude of this situation and tectonic shift in the global financial system.
US dream about the Stronger Yuan is happening now for real, but be careful what you wish for! US Dollar will go down relatively to Yuan and it will push Commodities and Gold prices higher in dollar terms. China will stimulate Internal Growth and will lose some Export. Inflation will pick up with rising Import prices in U.S. And if it is now FED's wish: to have more Inflation - this very delicate balance will be very hard to keep. Absence of China from Treasury market and lack of speculators without the Bernake's put from FED can make much higher Interest Rates reality very fast."