Tune into radio "way out there"

Put your tin foil hats on and tune into radio "way out there"
This is an exercise in game theory more than anything else. Sometimes think tanking something like this is useful for showing possible outcomes. Sometimes not.

This link shows how long the game (opening a Comex competitor) has been in motion.

From zero hedge we learn there is to be new Gold exchange in Hong Kong.
Nothing exciting about that as they try to compete for the worlds attention and trading DOLLARS for gold.

There is a theory out there that the Chinese are the ones shorting the Silver market using JPM as their flunky boy. Simply to allow them to accumulate cheaply. Makes sense in the same way as the USA is buying up cheap oil while our own reserves are capped by the all powerful tree huggers. Despite 8 years of rule by an Oilman Decider those all powerful eco liberals still had their way.
 
A few months back china announced they were allowing bank accounts to be opened here in the USA in Yuan. Open to all nationalities.

Supposedly they encourage their citizens to buy Gold and Silver. 

They have bonded warehouses set up in Hong Kong and Shanghai and the usual pickpockets are present and accounted for JPM etc. Of course the pickpockets get a little piece of the new exchange so they won’t rock the boat. The fact there was so little rocking of this boat lends a little credence to the Chinese Silver short theory. You don't want to piss off your biggest customer. There is a lot of money to be made playing middleman in this game.

If I was planning to pull the biggest heist, end game, blackmail the world to my bidding I would deliberately open a price gap between the London/NY exchanges and Hong Kong and allow all the metal to be sucked out of the Anglo warehouses for deposit in HK and from there to the bonded warehouse in Shanghai.
Denominated in Dollars of course. When they are finally ready to show their hand they will settle in Dollars and keep the Gold. If this is the plan they will screw over all their US partners in crime.

The Chinese can now very quietly start dumping their dollars closer to home in an exchange that they run and trade them for real money.
 
Of course you don’t want to take everything otherwise instead of a gold standard you end up with an oil standard.
It’s not much use if you are the only one holding Gold.

Once china has everything in place militarily (done) and financially then they will be calling the shots and will force the USA to stop printing and start acting like grown ups. It opens up other possibilities like the Chinese may revalue gold rather than wait for the Fed.

So lets see if a price gap opens up.

5 comments:

Kid Dynamite said...

Louis,

would you mind explaining exactly how you might go about "deliberately open a price gap between the London/NY exchanges and Hong Kong"

and which way you think that price gap would go (I'm guessing that you're saying that COMEX/LMBA metal would have to be cheaper, if you want COMEX/LBMA drained)

thanks.

Louis Cypher said...

http://www.hkmerc.com/en/trading/trading_schedule/index.html
They are "filling the gap in the worlds trading day".
If I wanted to do it I would wait for Anglo/ American holiday schedules to open that gap.

Keep in mind it's game theory and that's all it is.

Kid Dynamite said...

ok.

keep in mind that obviously, as soon as the Anglo holiday was over, The Market would quickly close that gap.

victorthecleaner said...

Louis,

there was an analysis by somebody from GATA claiming that the price of gold on average only increases between the London PM and the AM fixing, but does not move or even drops a little between the AM and the PM (during the main London trading hours).

I have checked the data, and the analysis is correct.

Of course GATA claim that this effect occurs because the market is rigged. But there is also a more natural explanation: Gold typically moves from London to Asia. Therefore, the Asian price is always a bit higher than the London price. Even though arbitrage smoothes out the difference, there is a base effect which corresponds to the costs of transporting gold from London to Asia, and which is not arbitraged away.

So, yes, I think it is very plausible that the Hong King price would always be a little higher than the London price, but for a rather innocent reason.

Victor

Jason said...

Any thoughts on the recent comments by Trinity B essentially being spot on? Just trying to determine the validity towards their posts. May 16th they posted the "bottom" was in and luck or not it was the exact day. Who knows we have seen crazier things right? I would like to see another call from the trinster as to where this rally goes into to test the metal of their claim's.