Jim’s Mailbox

Posted at 10:09 AM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

The return of the Gold Standard!

As Mark Twain once said, ‘History doesn’t repeat itself, but it does rhyme.’

“The implications I see for the Chinese move are vast. We may witness the return of the gold standard, not as we had imagined, but simply as the result of a spontaneous turn to gold as a means of trade initiated by the Chinese measure.”

A Pandora’s Box has been opened and the U.S. Dollar will be at the mercy of Gold.

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“Here I pose a question: once the oil exporters get a good deal, receiving gold for their exports to China , what will the other major exporters of commodities to China be thinking? Think of iron ore, copper and all the other commodities that make up the recently recorded $1.817 Trillion of yearly imports by China.”

Brace yourself!

CIGA Wolfgang Rech

The Gold Worm on the Yuan Hook
October 6, 2017

Once again, I turn over in my mind the Chinese plan regarding their imported oil, which consists in convincing their oil suppliers to accept yuan in payment (and thus re-directing their sales outside the orbit of the US dollar) with an additional sweetener in case the oil exporters do not wish to hold assets denominated in yuan: the sweetener consists in offering to exchange the yuan received by the oil exporters, for gold purchased on the world markets – and not out of Chinese reserves.

Again, I mention that for the first time in 46 years – ever since that fateful date, August 15th, 1971, when Nixon took the US “off gold” – gold is once again mentioned as part of a commercial deal – and one of great importance.

“There is more than one way to skin a cat” says an old proverb. And there is another way to bring the US to its knees, besides using hydrogen bombs or EMPs.

If the US cannot stop China from implementing its “oil – for yuan – for gold” program, then the fate of the US is at hand.

Once the oil exporters accept the deal, they will all be permanently caught. The price of gold will begin to rise, and rise and rise as more and more oil income is exchanged for gold. Thus, the gold income received from prior oil sales will become much more valueable for the oil exporters. I do not see the price of oil going up in terms of yuan. The first sellers of oil to China in exchange for yuan, and then exchangeable for gold, will get a lot of gold for their oil. As the scheme progresses, the oil exporters will get progressively smaller amounts of gold for their oil.

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Exactly correct Wolfgang, another pertinent saying is monkey see, monkey do! Something “real” in exchange for another something real will be enticing as compared to today’s trading “something for nothing”…

Best,

Bill

Jim/Bill,

What does this say about America?

“President Vladimir Putin said on Tuesday crypto-currencies were risky and used for crime, as Russia’s central bank said it would block websites selling bitcoin and its rivals”

Keeping our mouth shut and allowing criminal uses speaks volumes.

Not to mention our modus operandi of protecting its citizens “after they’ve been had”, instead of being proactive.

It’s 5 PM. Who’s watching your back?

CIGA Wolfgang Rech

Russia Turns Cold On Crypto-Currencies
October 10, 2017

SOCHI, Russia (Reuters) – President Vladimir Putin said on Tuesday crypto-currencies were risky and used for crime, as Russia’s central bank said it would block websites selling bitcoin and its rivals – a change of tone from a month-old promise to legalize the market.

Central Bank First Deputy Governor Sergei Shvetsov told a conference in Moscow that the currencies were “dubious” and investors needed to be protected.

“We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors),” Shvetsov said.

Around 1,000 miles (1,600 km) further south in the resort of Sochi, Putin told reporters that crypto-currencies could be used to launder money, evade taxes and finance terrorism.

“The usage of crypto-currencies carries serious risks. I know the central bank’s position on that,” Putin said.

“Crypto-currencies are issued by an unlimited number of anonymous bodies. Thus buyers of crypto-currencies could be involved in unlawful activities,” Putin said.

Russian financial authorities initially treated any sort of money issued by non-state approved institutions as illegal, saying they could be used to launder money.

But Finance Minister Anton Siluanov said last month that the authorities had to accept that the virtual currencies existed.

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