Baltimore, Maryland
March 12, 2015
March 12, 2015
“I’ve always enjoyed reading articles and listening to commentary by Jim Rickards,” writes one reader on the heels of Mr. Rickards releasing his new exclusive book, The Big Drop.“However, in all the years he has been in the spotlight, I don’t think I’ve ever heard him mention anything about gold’s ‘price fixing’ or the Comex scandals of price manipulation by the big banks like JPMorgan, Bank of Nova Scotia, HSBC, etc.
“It appears,” the reader concludes, “that regardless of inflation, extreme deflation, financial panic and negative real interest rates, gold still won’t be able to do much unless the ‘big guys’ are willing to let it. I’m certain an article regarding his thoughts on that situation would be well received.”
Ask and you shall receive.
Below, you’ll find Jim’s article outlining the whys and hows of gold price manipulation. According to him, the U.S. has been keeping the price low on behalf of China.
Before you read about it, we suggest keeping this news nugget, out from The BRICS Post this morning, in mind:
“A senior Chinese central bank official said Thursday that the country is ‘actively communicating’ with the IMF on the possibility of including the yuan, or RMB, in the basket of the special drawing rights (SDRs).
“Including the yuan in the SDR system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance.
“‘We hope the IMF can fully take into account the progress of RMB internationalization, to include RMB into the basket underlining the SDR in foreseeable, near future,’ said Yi Gang, vice governor of the People’s Bank of China.
“However, China will be patient until conditions are ripe, Yi said at a press conference on the sidelines of the ongoing annual parliamentary session.
“In late 2015, the IMF will conduct its next twice-a-decade review of the basket of currencies its members can count toward their official reserves.
“SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, an SDR represents a claim to foreign currencies for which it may be exchanged in times of need.
“Although denominated in U.S. dollars, the nominal value of an SDR is derived from a basket of currencies, with, specifically, a fixed amount of Japanese yen, U.S. dollars, British pounds and euros, without RMB.
“China would need to satisfy the Washington-based lender’s economic benchmarks and get the support of most of the other 187 member countries.
“To become a currency included in the SDR basket, the trade volume of goods and services behind that currency will be evaluated, the Chinese Central Bank official explained on Thursday, stressing that RMB has no problem in this regard. But he said views are divided on whether the RMB is a freely usable currency.
“‘No matter whether and when the RMB will be included in the SDR basket, China will push on with its financial sector reform and opening-up,’ Yi said.
“The yuan became the world’s No. 2 currency for trade finance globally in 2013, and overtook the Canadian and Australian dollars to enter the top five world payment currencies in 2014, according to global transaction services organization SWIFT.
“China said the yuan has also been used as a reserve currency in some countries and regions.”
“Including the yuan in the SDR system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance.
“‘We hope the IMF can fully take into account the progress of RMB internationalization, to include RMB into the basket underlining the SDR in foreseeable, near future,’ said Yi Gang, vice governor of the People’s Bank of China.
“However, China will be patient until conditions are ripe, Yi said at a press conference on the sidelines of the ongoing annual parliamentary session.
“In late 2015, the IMF will conduct its next twice-a-decade review of the basket of currencies its members can count toward their official reserves.
“SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, an SDR represents a claim to foreign currencies for which it may be exchanged in times of need.
“Although denominated in U.S. dollars, the nominal value of an SDR is derived from a basket of currencies, with, specifically, a fixed amount of Japanese yen, U.S. dollars, British pounds and euros, without RMB.
“China would need to satisfy the Washington-based lender’s economic benchmarks and get the support of most of the other 187 member countries.
“To become a currency included in the SDR basket, the trade volume of goods and services behind that currency will be evaluated, the Chinese Central Bank official explained on Thursday, stressing that RMB has no problem in this regard. But he said views are divided on whether the RMB is a freely usable currency.
“‘No matter whether and when the RMB will be included in the SDR basket, China will push on with its financial sector reform and opening-up,’ Yi said.
“The yuan became the world’s No. 2 currency for trade finance globally in 2013, and overtook the Canadian and Australian dollars to enter the top five world payment currencies in 2014, according to global transaction services organization SWIFT.
“China said the yuan has also been used as a reserve currency in some countries and regions.”
Cheers,
Peter Coyne
The Daily Reckoning
Peter Coyne
The Daily Reckoning
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