Gold Trade Usage & Price Effect / Commodities / Gold & Silver 2020
Some basic logic must come to the table inthe Gold pricing mechanism. The easiest way to keep the Gold price down is NOTTO USE IT IN TRADE, NOR IN BANKING RESERVES, and to relegate it to thesidelines as the barbaric metal. Some deep amusement comes always in hearingthat Gold does not have value, does not earn a yield, and has no uses. Watchingthe destruction in bond principal value leads the observer to note how Goldholds its value in times of crisis, and even rises against the general papertide. The bond market crisis is global this time, unlike in 2008. Each debtdowngrade to BBB, within the context of fallen angels, brings a realized lossin bond value. All this occurs with a rising Gold price, even with pauses forconsolidation. The best way to lift the Gold price is TO USE IT IN TRADE AND INRESERVES MANAGEMENT. The actual usage further motivates the proper value to beinstilled, regardless of type of usage.
BELT & ROAD INNON-USDOLLAR
Bear in mind that the Belt & Roadprojects, led by China and with participation across the entire EasternHemisphere, can qualify as a Global Economic RESET basis. The BRI full 2019year trade payments hit an impressive $1.34 trillion, after reaching the $600billion level for the first six months. It is all all ALL non-USDollar in tradepayments. Thus witness the acceleration. It should reach $3 trillion in thenext few years, with the inclusion of the European Union, either in largesections or in its totality. These nations observe the nasty USGovt sanctions,the vicious SWIFT exclusion, pressured political tactics, in addition to hotwars across the globe in defense of the decaying corrupted USDollar. Not even USallies are spared, all targeted like Germany and Saudi Arabia.
SELF-INTEREST MOTIVE
Think in simple self-interested terms forthe two parties. If China sets up broadbased systems for trade payments inGold, then the Beijing crew will surely gather tremendous bounty in gold bullion.Nation after nation has a trade deficit with China. The accumulation will begreat and in impressive volume, which the Chinese will want to be priced properly. They will wish to establish a new banking system with a prudently monetized systembased upon gold. The transactions on the street and shops will not be in goldcoins or bars, but the monetary basis will be gold. The point is that theChinese Govt will want gold properly priced, since they will hold large vaultsof gold. They will want their gold reserves valued as high as possible, but inrealistic terms. Simple point, indisputable point, inevitable outcome!
If Italy sets up its bilateral trade with China,then Italy stands at risk of shedding (forfeiting) large volumes of its goldreserves. The two nations early last year arranged a Gold Trade Note to serveas their bilateral trade foundation in contract form. This vital European cogwill be typical in such trade deals with China, a global model of sorts. Aguarantor device is required in the new system to come, called the GlobalFinancial RESET. Recall that the dominant theme will be Current Account Deficit(CAD), not just trade deficit within this context. Factor in investments. TheChinese already have signed preliminary deals with Italy to acquire portfacilities such as Trieste and Palermo, with four ports targeted. CAD equalstrade deficit plus investment deficit. Here the Italians will be selling portswith value in the multiple EUR billions. In the first year, the overall deficitmight be very small, and thus small gold deliveries to settle. The point isthat the Italian Govt will want the gold properly priced, since they will runthe risk of forfeiting gold in balancing the accounts. They will want theirgold reserves valued as high as possible, but in realistic terms. Simple point,indisputable point, inevitable outcome!
It is inconceivable how the Gold Trade Note ortrade differences settled in gold would work based on the current Gold spotprice. It is far too low to properly function. Its ongoing consistent penetratingcorruption has endured for a few decades. Its time is up. Proper Gold pricingis overdue, and it is coming soon. The same principle will work on a fullglobal basis. Expect for those countries settling their trade difference withgold on a quarterly basis to pursue the pricing of gold much higher, withintheir own self-interests and national motivations. Then also, the Oil & Gasindustries will eventually demand Gold payment for their shrinking energy depositsand stores. The entire crude oil market has made very large strides in movingaway from the USDollar. The effect has been to weaken the global power of theKing Dollar, opening the door to Gold to become the global financialfoundation. The Petro-Dollar is somewhere between dead in the morgue, and comatoseon the gurney greased by war and blood.
HIGHER GOLD PRICE FROMUSAGE
Actual usage of Gold in trade and in bankreserves management should push it to a price near $2500 in USD quickly. Anygold-backed digital currency sponsored by China will also propel the Gold pricemuch higher. The entire gold market mechanisms are due for changes upon itsformal usage:
GOLD & SILVER DUE TORISE
The true save haven is precious metals.Their price could rise double or triple quickly. The Basel End Game Plan calls for themajor central banks to accumulate gold, to convert impaired sovereign bonds toGold reserves, and then finally to push the Gold price up 10-fold, like over$10,000 per oz. The Basel hive is executing this plan right here right now, inthe Jackass opinion. They are using closely aligned financial firms to do theGold purchases, and using false accounting with double books to conceal theiractivity. The personal Jackass desired outlook is to see a universal acceptanceof Gold Trade Note for trade payment, and a $2500 Gold price aside a $50 Silverprice later this current year. As for a forecast, hard to say since so manycorrupt factors are at work, like political obstacles, trade sanctions, regionalwars, and basic murders.
The Gold price is poised to moveupward in an aggressive manner. Rising moving averages lead the way. Theconsolidation endured over September, October, and November has finished. Theannual Christmas run-up was impressive from 1480 toward 1600, which also hasendured its own consolidation. Fading REPO attention span, along with fadingIran War expectations can be attributed. The trendlines are upward. Thecyclicals are positive. One must remember that with proper inflationadjustment, the $1300 price from year 2013 would be over $1900 today. Therefore,the current Gold price is absurdly under-valued. The next price target is 1750,on the march to reach the hallowed $2000 level.
The fundamentals have never beenstronger in modern history. The hyper monetary inflation by the USFed and theirdenied QE is historic. The Infinite QE gradually encompassed numerous channels,from overnight REPO to Term REPO to Permanent Operations (onto Fed balancesheet), and recently the newly announced liquidity measures to feed theinsanely aggressive hedge funds that operate under the Wall Street aegis. Thebig ugly chaos story on Wall Street is that the hedge funds blew up in lateOctober, resulting in the USFed buying all assets in sight, regardless ofimpaired quality, regardless of unknown ownership. The big ugly joke onWall Street is that the hedge funds run dangerous illicit games loaded witharbitrage, all of which are denied by their assigned VP overseers. The vicepresidents are in charge of credit provision, algorithm supervision, and bustdenial.
The Silver price is also poised to moveupward in an aggressive manner. Rising moving averages lead the way. The consolidationendured over September, October, and November has finished, having gone down aparallel path to Gold. The annual Christmas run-up was impressive from 16.60 toward18.50, which also has endured its own consolidation. The trendlines are upward.The cyclicals are positive. The fundamentals have never been stronger in modernhistory. The Global Financial RESET calls for silver to become the newtechnology standard, with core applications in the energy field. The USMilitaryhas blessed the waves of disclosure, a process already having begun. Thecurrent Silver price is absurdly under-valued. The next price target is 20.5,on the march to reach the hallowed $50 level, in a wonderful grand Fibonaccidisplay which could see the $90 level in the next couple years.
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Jim Willie CBis a statistical analyst in marketing research and retail forecasting. He holdsa PhD in Statistics. His career has stretched over 25 years. He aspires tothrive in the financial editor world, unencumbered by the limitations ofeconomic credentials. Visit his free newly revamped website to find articlesfrom topflight authors at www.Golden-Jackass.com.It now has a hyphen in the URL address. For personal questions about subscriptions,contact him at JimWillieCB@gmail.com.
Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
Jim Willie CBis a statistical analyst in marketing research and retail forecasting. He holdsa PhD in Statistics. His career has stretched over 25 years. He aspires tothrive in the financial editor world, unencumbered by the limitations ofeconomic credentials. Visit his free website to find articles from topflightauthors at www.GoldenJackass.com,which includes a Squirrel Mail public email facility.
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