To Infinity And Beyond

Wikileaks has dropped a couple of Holy Hand Grenades of Antioch onto the Gold supressors (the banks such as JP Morgan acting as Fed puppets). It reveals the reason behind China's gold buying spree.

Cables from the US Embassy in Beijing.

The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't  want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.

The full cables for above:
Link1
Link 2 (in case Link1 mysteriously 'disappears')

This time the quick change of the U.S. policy (toward China) has surprised quite a few people. The U.S. has almost used all deterring means, besides military means, against China. China must be clear on discovering what the U.S. goals are behind its tough stances against China. In fact, a fierce competition between the currencies of big countries has just started. A crucial move for the U.S. is to shift its crisis to other countries -- by coercing China to buy U.S. treasury bonds with foreign exchange reserves and doing everything possible to prevent China's foreign reserve from buying gold. The nature of such behavior is a rogue lawyer's behavior of 'ripping off both sides': taking advantage of cross-strait divergences, blackmailing the Taiwan people's wealth by selling arms to Taiwan, and meanwhile coercing China to buy U.S. treasury bonds with foreign exchange reserves and extorting wealth from the mainland's people. If we [China] use all of our foreign exchange reserves to buy U.S. Treasury bonds, then when someday the U.S. Federal Reserve suddenly announces that the original 10 old U.S. dollars are now worth only one new U.S. dollar and the new U.S. dollar is pegged to the gold, we will be dumbfounded. Today when the United States is determined to beggar thy neighbor, shifting its crisis to China, the Chinese must be very clear what the key to victory is. It is by no means to use new foreign exchange reserves to buy U.S. Treasury bonds. The issues of Taiwan, Tibet, Xinjiang, trade, and so on are all false tricks, while forcing China to buy U.S. bonds is the U.S.'s real intention

The full cables for above:
Link1
Link 2 (in case Link1 mysteriously 'disappears')


ZeroHedge's analysis on the cables are a must read. Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree

Wondering why gold at $1850 is cheap, or why gold at double that price will also be cheap, or frankly at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. Putting that into dollar terms is, therefore, impractical at best, and illogical at worst. We have a suspicion that the following cable from the US embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24 karat pool.

I thought of titling this piece, “Why $5,000 Gold May Be Too Low.” Because once fund managers enter the gold market in mass, this tiny sector will light on fire with blazing speed. 

Finally, a take on the recent clockwinder's central bank to join the beggar-thy-neigbour game. Thank You Swiss National Bank For $2000+ Gold


What happens when you take a rubber ball to the swimming pool and hold it (suppress it) a few feetr under water and finally you let it go because you can't hold it any longer as it seeks 'correct' environmental pressure?

"when someday the U.S. Federal Reserve suddenly announces that the original 10 old U.S. dollars are now worth only one new U.S. dollar and the new U.S. dollar is pegged to the gold, we will be dumbfounded."

That a classic line or what?