Great Game 2.0

[Vonz90]

Maybe rock the boat, but nothing that will sink the ship. Besides, Bretton Woods is already dead and buried. It was practically dead under Johnson. Nixon just gave it a mercy killing and decent burial 50 years ago. We are working with a new petro-dollar/ Euro-dollar system. That will be hard for even Uncle Joe to kill.

I agree. Slow Joe is doing his best to screw the dollar (to be fair, Trump helped) but the follow up question is what is the alternative. Momentum will carry the dollar a long way and there are institutional controls around to at least limit how much damage this Joe or future ones can do. RMB can become worthless tomorrow if Xi has a bad day.

The Euro is a maybe, but I don't think Germans or even French really want that. Their economies are too export driven and being the reserve currency tends to strengthen. That is why they like having the southern economies in the Euro, it makes the Euro cheaper and helps the northern economies export.

[HTRN]

The Euro is a maybe, but I don't think Germans or even French really want that. Their economies are too export driven and being the reserve currency tends to strengthen. That is why they like having the southern economies in the Euro, it makes the Euro cheaper and helps the northern economies export.

There's really only three options for a global reserve currency - the US dollar, the Euro, and the Chinese Renminbi.

Nobody trusts the Chinese, especially with accounting, and the Euro economy is run by self serving beuracrats. Don't kid yourself - most of OPEC, the Russians, Indians and a bunch of other hostile and neutral nations would love to move away from the dollar, especially with Sleepy Joe seemingly hell bent on running it into the ground. The problem is, all the viable alternatives are worse..

[D5CAV]

What does China do? https://mishtalk.com/economics/what-doe ... e-buy-gold

Problem for China: their biggest market is USA, so they get lots of USD for all the junk that gets distributed by Amazon and WalMart. What to do with all the USD?

Mathematically, as a direct result of having a trade surplus with the US, China has a huge influx of US dollars.

China can convert dollars to Euros, but what does the euro seller do with the dollars?

Suppose China buys gold. Then the seller of gold has dollars. What does the gold seller do with dollars?

If China wants to reduce it's USD reserves, what will that alternative be?

China will buy more gold, more copper, etc, but what it would really like to do is buy Boeing or a defense contractor.

The US would of course say no.

So what to do?

Team Biden just sent unmistakable message to China, Saudi Arabia, Russia, well actually everyone

We can make your fiat reserves worthless overnight
Buy gold
Buy base metals.
Hoard things you have that everyone needs.

Yeah, it helps that "Team Biden" also tells one of the biggest suppliers of "things you have that everyone needs" that no-one can buy those things.

[D5CAV]

Going down the rabbit hole of "Frozen Russian Gold", John Kim is one of the foremost "gold geeks", but he only talks about CME, LBMA and COMEX "freezing out" Russian gold: https://www.zerohedge.com/news/2022-03- ... no-clothes

Thus, if the majority of gold and silver traders understand all the points I’ve made in this article, the banning on 7 March 2022 of all bars by the LBMA (London Bullion Market Association) from its inventory produced by the following six Russian gold and silver producers: JSC Krastsvetmet (gold and silver), JSC Novosibirsk Refinery (gold and silver), JSC Uralelectromed (gold and silver), Moscow Special Alloys Processing Plant (gold), Prioksky Plant of Non-Ferrous Metals (gold and silver), and Shyolkovsky Factory of Secondary Precious Metals, SOE (gold and silver) will likely provoke a response from Russia. After the LBMA banned Russian produced gold and silver bars from their markets, the CME followed suit just hours later, in this CME (Chicago Mercantile Exchange) press release, and issued a ban on all Russian gold and silver bars from their inventory that was almost identical to the LBMA’s specifications, stating that they would allow all Russian manufactured bars delivered to COMEX vaults before 7 March 2022 to retain their “good for delivery” status in COMEX’s New York and Delaware vaults.

So CME and LBMA have banned any gold coming from Russia, but will allow trade of gold that was originally sourced in Russia that is already in their vaults.

When you go to buy your mother a gold bracelet on Mother's Day, do you care that some of the gold in that bracelet might have come from Novosibirsk, from some dental work extracted at Dachau in 1943, or recently mined by an "exploited" African at Ikantha mines in Ghana?

I guess LBMA, CME and Auric Goldfinger care: https://www.youtube.com/watch?v=WTBvu-fTTIk

China doesn't care. They are happy to receive gold from Novosibirsk:

Per the Western economic sanctions levied on Russian gold, the SGE’s own requirements, which have not been altered as of 11 March 2022, would invalidate all Russian manufactured gold bars from their inventory as well. However, as of today, the SGE has not released any “official” statement, as have the LBMA and CME, that will not accept Russian bars into their vaults in the future. So, perhaps, the SGE may alter their gold bar specifications for their inventory to continue accepting Russian gold bars in the future.

As an aside, LBMA, CME and COMEX all allow naked shorting of gold and silver. SGE requires physical metal on hand to short. Unlike LBMA, CME and COMEX, the SGE also requires members to hold physical metal; no one can be a member of the SGE unless they can bring metal.

[D5CAV]

Further down the rabbit hole with John Kim: https://maalamalama.com/wordpress/will- ... lthacademy

He thinks the ban on Russian gold will backfire on Western banks:

But the problem with this ill-advised plan of Western bankers attempting to punish Russia by making it illegal for anyone to accept delivery of Russian gold, and likely the reason the SGE has not yet fallen in line, even though they have been infiltrated by Western banking cartel members that are likely trying to convince them to do so, is that the SGE and Russia may actually be the ones holding the Royal Flush hands in this high-stakes game of financial poker.

Except that the game is rigged. The prices you see for silver and gold come out of LBMA, CME and COMEX, and they are purely paper prices. This is wishful thinking on John's part. He thinks the lack of supply of Russian gold will drop this house of cards and his gold will suddenly skyrocket.

Yes, it is true that China and Russia are two of the largest producers of gold, but they are net buyers of gold. I don't think much gold has been sold by Russia in the past 10 years, and the only gold that has escaped China is on bracelets worn by mistresses of CCP leaders.

I think this is a dead end. Yes, there is a freeze on buying Russian gold. It makes no difference because none of Russia's gold is for sale anyway.