Today one of the greats in the business said Maguire is right, China is going to massively revalue gold and make gold part of a blockchain currency.

Maguire Exposed World To Rigged Markets
July 8 (King World News) – Stephen Leeb:  “What a pleasure, Eric, to hear your interview with Andrew Maguire, whose knowledge of the ins and outs of the gold market is unparalleled. He was the first to give solid evidence that major markets can and have been rigged, and his revelations in 2010 about gold and silver made it believable that other major markets could be rigged as well. In fact, I’d argue that without his persistence in 2010, no one would have believed the whistleblowers who blew the lid off the scandals in such major markets as LIBOR and some currency markets. Eric, the bottom line is that Maguire exposed to the entire world the fact that markets are rigged before anyone believed that was possible..

So, I find it very reassuring that my macro approach to analyzing the markets is in sync with Andrew’s view. While Andrew focuses on trading patterns and positioning in the physical and paper markets by various players, my indicators assess a wide variety of big-picture variables, from changes in the S&P to correlations among different commodities and between commodities and paper assets. My indicators, which have a good record, are why in several interviews this year I warned that gold could come down but urged that any dips be taken as buying opportunities. 

On Friday, my indicators, which have been bearish since mid-April, turned neutral, and they easily could soon flash a buy signal almost in line with Andrew’s projected time frame for a reset in gold’s price. While my indicators say it is still a bit early to plunge in and buy with both hands, I could easily be printing that advice within the new few weeks or even days.

Maguire Is Right, China To Use Gold In Blockchain
I also was struck by Andrew’s points about blockchains that include gold and about the potential for 2017 to be a major bottom for gold. My thinking for some time has been that the Chinese will use blockchains and some form of virtual currency – not bitcoin or anything available today but a currency of their own creation – to replace the dollar. I don’t think anyone can guess point by point what the plan will be, but the currency almost surely will be a basket that includes gold, the renminbi, and perhaps other paper currencies. Whatever its precise form, the goal will be to segue from a dollar-based reserve currency to a gold-centered monetary system. And as I’ve noted previously, this new currency will likely first be introduced as the denomination for trading an Eastern oil benchmark that the Chinese will control.

One question is, why wouldn’t China just use bitcoin and be done with it? After all China by a wide margin has been the largest “miner” of bitcoin. It takes massive amounts of computing power to create bitcoin, which, once created, become part of a blockchain – a database containing the history of all bitcoin transactions. Because of the complexity of the algorithms creating bitcoin, and because copies of the blockchains are distributed to various institutions, the bitcoin market is nearly impossible to hack into as you would have to hack all copies of the blockchains. Creating a phony bitcoin not only is beyond the computing power of almost all hackers, the cryptocurrency would then have to be attached to all blockchains. 

Besides their high degree of security, the another reason bitcoin is attractive to investors is that they are limited in number to 21 million. This limit, however, is one of the reasons bitcoin wouldn’t be suitable as a reserve currency. Even at their recent high of $3,000, the total value of all bitcoins was equivalent to a few billion dollars. Not only would it take a Herculean computing effort to break the 21 million barrier, but any effort to create more would dilute the value of existing bitcoin holders and run into fierce resistance by those owners. Moreover, increasing the number would drastically change the underlying fundamentals of the currency…..more here