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Has The PBOC Taken Control of The Gold “Market”?
The evidence is mounting, and we invite you to consider the implications.
First, a few items of background information. Perhaps these are unrelated, perhaps they are not.
- In 2013, a major Chinese conglomerate called Fosun International purchased One Chase Manhattan Plaza from JP Morgan: https://money.cnn.com/2013/10/18/news/china-jpmorg… Why would this be significant? Because it’s the same property that houses a massive underground gold vault … that just happens to be directly across the street from the New York Fed:https://www.zerohedge.com/news/2013-03-02/why-jpmo…
- Next, ICBC (Industrial and Commercial Bank of China) purchased the lease of DeutscheBank’s massive London vaults in early 2016. ICBC then petitioned to join JPM, HSBC, Scotia, Barclays and UBS as a member of the London Daily Fix process:https://www.telegraph.co.uk/finance/commodities/12…
- Soon thereafter, ICBC also bought a massive London gold vault from Barclay’s:https://www.theguardian.com/business/2016/may/16/b…
- Most recently, the World Gold Council announced the offering of a new gold ETF to supplement the existing GLD. The custodian of the gold for this new fund? You guessed it … ICBC:https://www.prnewswire.com/news-releases/icbc-stan…
Fast forward to the summer of 2018. Two weeks ago, our fellow columnist here at Sprott Money, David Brady, wrote an insightful piece regarding a new correlation for the global gold price—the USDCNY—which is the exchange rate of US$ to Chinese yuan. Though the PBOC maintains a “peg” for this rate, the rate is allowed to fluctuate if the PBOC deems it necessary. Before we go on, I urge you to read David’s column: https://www.sprottmoney.com/Blog/gold-the-chinese-…
Now consider this. Since the PBOC began to actively devalue the yuan versus the dollar four weeks ago, the price of COMEX gold has tracked the yuan nearly tick-for tick. This is clearly shown on the chart below. We’ve taken the USDCNY and inverted it to CNYUSD. This is shown in candlesticks. The price of the Aug18 COMEX gold is represented as a blue line.
…click on the above link to read the rest of the article…
Canada-China Ties Deepen With Renminbi Trading Hub
Canada-China Ties Deepen With Renminbi Trading Hub
China’s growing global financial influence has skeptics, requires reforms to keep pace
Canada and China officially opened the first North American renminbi trading hub in Toronto on Monday, March 23, amid other initiatives that are poised to give the Asian power greater financial influence internationally. These developments give skeptics ongoing concerns about China’s ultimate objectives and are not limited to those regarding its control of yuan trading, capital market reforms, and lack of transparency.
The hub was the result of several months of work since Prime Minister Stephen Harper brokered a deal for Canada to be the first such trading center in North America. Through the Industrial and Commercial Bank of China (ICBC), the designated clearing bank, making and receiving payments in renminbi, also known as the yuan, is now easier for Canadian businesses.
For certain, this is good news for Canadian businesses that can now lower their costs in renminbi transactions, principally instead of using the U.S. dollar as a go-between. It increases the global competitiveness of Canadian firms that deal with Chinese firms. It also bodes well for the Canadian banks that can roll out more products, such as renminbi deposit accounts, and earn fees.
“A rapid build-up of expertise in renminbi liquidity could have significant benefits for our world-class financial industry,” said Canada’s finance minister Joe Oliver on Monday. “This is an opportunity for Canada’s financial sector, but also for China’s.”
Canadian exports to China have more than quadrupled since 2003, totalling $78 billion in 2014, and foreign direct investment between the two nations has gone up more than seven-fold between 2005 and 2013, to a total of $21.5 billion. China, the world’s second-largest economy, is Canada’s second-largest trading partner after the U.S.
