In case anyone was wondering what the Chinese government is thinking, they are about to unleash a new global monetary system.
The Greatest Bull Market In Gold
Stephen Leeb: “If you’re a gold investor fretting at the metal’s seeming drowsiness, don’t worry. A lot has been happening lately that brings us closer to the launch of a great bull market in gold that will be unmatched in its sweep and longevity. The biggest mistake you can make now would be to get shaken out of your gold (and silver) positions if gold continues to tread water or possibly even dips below $1,200. The second-biggest mistake would be to not take advantage of near-term weakness to add to your holdings…
Stephen Leeb continues: “It’s no surprise that the recent developments involve China, which on multiple fronts has been busy creating the conditions for a new monetary system connected to gold. For starters, China, which has been procrastinating on launching a new oil benchmark traded in yuan, now seems inclined to move more swiftly. I’ve long believed such a benchmark is a necessary (though perhaps not sufficient) condition for a new monetary system. But whenever it seemed imminent, China would pull back. In January, China appeared to put the whole idea on hold with no indication of when, or even whether, the Shanghai International Energy Exchange would trade yuan-based oil future contracts.
A Google search of “China oil contract” still leads with stories indicating a launch could be years off. But if you repeat the search and instead of clicking on “All” – which ranks every story – click on “News” for the most recent stories, you’ll see a Reuters article headlined “China plans Shanghai crude oil futures launch in H2 2017.” One source pegged the launch date as September or October, while another said it could be as early as July.
Of course, China could still end up procrastinating longer, but there are reasons to think it won’t. One is China’s apprehension about President Trump, whose erratic actions and words don’t create any sense of security, especially if you are a major foreign power still using the U.S. dollar for the bulk of your trade. It’s telling that the Reuters article appeared at the same time as an article in XinhuaNet titled:
“China expects more secure, supportive financial system.”
What grabbed my attention was a comment attributed to Xi Jinping:
“If the Asian financial crisis and the 2008 sub-prime mortgage crisis are anything to go by, then the next cataclysm will come as a result of the failure of inadequate risk prevention, swiftly followed by a universal economic collapse.”
Unsaid but obviously was that the crises Xi cited resulted from blatant monetary speculation in the West. Whatever your opinion of the Trump administration, the constant turbulence is chalk on the board to Chinese ears, making a monetary system anchored to gold take on heightened urgency.
Evidence of major change comes from throughout the East, including Saudi Arabia. As has been widely reported, the Kingdom plans to sell part of Saudi Aramco, but the date, once slated for 2017, has been in extreme flux. Some now predict the sale won’t happen until next decade. But I’d bet on an earlier date, probably by the first quarter of 2018.
While various reasons have been offered for the possible delay, the crux of it is the low price of oil. The Saudis plan to sell about 5 percent of Saudi Aramco. If that were priced at $20 billion, it would value the entire company at $400 billion, at the low end of ranges analysts have suggested. If the 5 percent fetches $100 billion, though, Saudi Aramco’s overall value rises to $2 trillion. That’s an enormous differential – $400 billion vs. $2 trillion – that would make an immense difference in how much the Saudis can borrow, how fast they can develop, and even in how much military hardware they can buy…….more here