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China Prepares To Launch Gold ETFs As Utah Becomes First State To Make Gold And Silver Legal Tender
Following Friday's news that China has now surpassed India as the world's largest buyer of gold, it is becoming increasingly obvious that the country is trying to capitalize on the popular interest in the precious metal by transferring the trading infrastructure away from US to domestic capital markets. First, it recently launched a 1 kilo gold futures contract on the HK Merc in an obvious attempt to undermine the Comex monopoly in the space, and next it seems that China has the GLD plain in its sights, as it plans to start exchange-traded funds, tapping rising demand in China, the world’s biggest investment market for the precious metal. Often blamed for the recent volatility in the price of gold, precious metal ETFs have been primarily an instrument available to those with access to the US market. That appears to be ending, and with an entire nation suffering from gold fever (as inflation continues to be goalseeked by the China politburo above expectations in what appears to be a programmed attempt by the Chinese central planners to push its population into gold hoarding) and about to be offered a simple way of investing in (paper) gold, it is likely that the price of gold (and soon thereafter all other commodities) will see unprecedented spikes in price in either direction as millions more are given direct exposure to trading the non-dilutable currency equivalent.
From Bloomberg:
“There are some complexities, as the central bank is in charge of gold management, while we still need to go through the procedures for launching new exchange products,” Wang Zhe, chairman of the bourse, said at a Shanghai forum. There is no timetable and the exchange is working with regulators on the plan, Wang said. China is the world’s largest gold producer and second-largest in overall consumption.
China doesn’t have gold ETFs and investors usually choose to buy physical gold, or invest through contracts traded on the Shanghai Gold Exchange, the Shanghai Futures Exchange or through banks. Lion Fund Management Co. in January said it raised more than 3.2 billion yuan ($483 million) for China’s first gold fund to be invested in overseas exchange-traded products.
Investment demand in China jumped 123 percent to 90.9 metric tons in the first three months. Total consumption including jewelry gained 47 percent from a year ago to 233.8 tons, the council said. That still lags behind India’s 291.8 tons. China demand may double before 2020, the council said.
Global investment increased 26 percent to 310.5 tons in the quarter. While bar and coin purchases climbed 52 percent to 366.4 tons, holdings in exchange-traded products backed by the metal declined. ETP assets dropped 69.9 tons from December through March, according to data compiled by Bloomberg, after reaching a record 2,114.6 tons.
Of course this merely opens up the path to currency "optionality" - after all it is not Guangdong or some other Chinese province, but Utah which just voted to make gold and silver legal tender: a previously preposterous (and very much illegal) idea. AP reports:
Utah legislators want to see the dollar regain its former glory, back to the days when one could literally bank on it being "as good as gold."
To make that point, they've turned it around, and made gold as good as cash. Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes.
Craig Franco hopes to cash in on it with his Utah Gold and Silver Depository, and he thinks others will soon follow.
The idea is simple: Store your gold and silver coins in a vault, and Franco issues a debit-like card to make purchases backed by your holdings.
He plans to open for business June 1, likely the first of its kind in the country.
"Because we're dealing with something so forward thinking, I expect a wait-and-see attitude," Franco said. "Once the depository is executed and transactions can occur, then I think people will move into the marketplace."
The idea was spawned by Republican state Rep. Brad Galvez, who sponsored the bill largely to serve as a protest against Federal Reserve monetary policy. Galvez says Americans are losing faith in the dollar. If you're mad about government debt, ditch the cash. Spend your gold and silver, he says.
His idea isn't to return to the gold standard, when the dollar was backed by gold instead of government goodwill. Instead, he just wanted to create options for consumers.
"We're too far down the road to go back to the gold standard," Galvez said. "This will move us toward an alternative currency."
Utah is first but certainly not last:
Earlier this month, Minnesota took a step closer to joining Utah in making gold and silver legal tender. A Republican lawmaker there introduced a bill that sets up a special committee to explore the option. North Carolina, Idaho and at least nine other states also have similar bills drafted.
At the moment, Franco's idea would generally be the only practical use of the law in Utah, given the legislation doesn't require merchants to accept the coins, either at face value - $50 for a 1-ounce gold coin - or market value, currently almost $1,500 per ounce. And no one expects people will be walking around town with pockets full of gold and silver.
Matt Zeman, market strategist for Kingsview Financial in Chicago, expects more people will start investing in gold as America's growing debt and bankruptcies in other countries continue to decrease the value of government-backed money.
"You've seen gold replacing these currencies as safety instruments," Zeman said. "If I don't feel good about the dollar or other currencies, I'm putting my money in precious metals."
Some supporters, including the law's sponsor, seek to push Congress toward removing the tax burdens that discourage use of the coins, such as a federal capital gains tax.
"Making gold and silver coins legal tender sends a strong signal to Congress and the Federal Reserve that their monetary policy is failing," said Ralph Danker, project director for economics at the Washington, D.C.-based American Principles in Action, which helped shape Utah's law. "The dollar should be backed by gold and silver, so we have hard money."
So, uh, does that mean that NORFED's Bernard von NotHaus can now change his facebook status from "incarcerated terrorist" to "visionary revolutionary"? And one can be quite confident that as soon as China (inconjunction with Russia and other countries, not to mention Zimbabwe) will soon proceed to allow the same "option" for their own consumers, as increasingly more countries realize that the $6 trillion in dollar-denominated assets continue to place the world at the exclusive mercy of the Fed, as any global "risk flaring" episode would require the activation of the Fed's FX swap lines designed to meet 'short-term' dollar deficiency needs... which just may not be activated for those which Hillary Clinton deems to be "terrorist" or "dictatorial" regimes at any given moment.
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Tuco,
Bingo!
The Military (used to be, maybe still is), controlled by two families.
The owners of Norinco, and Poly Technologies,Inc.
The Old Men that talk are just figure heads,when the ball goes up, they will be slaughtered like sheep.
Anywhere anytime.
Like the Islamonazis, hiding like bitches behind masks behead their victims.
I have seen way too many 7.62 Tok rounds put into the back of the heads of their kneeling citizens,as an example.
Gotta show who is boss.
"Because we're dealing with something so forward thinking, I expect a wait-and-see attitude," Franco said. "Once the depository is executed and transactions can occur, then I think people will move into the marketplace."
Why do I have the feeling that the Feds will go after these people with trumped up terrorism charges?
:-0
Let's hope the Feds mind their own business, Golden Butterfly, although I doubt they will. Constitution? Que es esto?
In the meantime, just keep quietly accumulating, poco a poco...
You can always quietly GIVE your PMs to your kids when that time comes...
Si, poco a poco es muy bien!
Gracias mi amigo!
:o)
Because you are awake and intelligent and unfortunately currently in the minority!
Tuco Benedicto Pacific Juan Maria Ramirez
Only way this works to attract metal to State coffers, IMO, is State of Utah Credit Union(or whatever) pays 9% APR for OZT in bullion savings account, paid in bullion. 6% penalty for bullion w/draw, 0% penalty on cash value of bullion(say 72hrs spot/3) w/drawn(at this point readjusts/converts account balance to lesser OZT, not $$). J6P would bite, IMO.
Is this a first step toward secession?
States have all kinda rights, no need to secede, make your state reps dust off the fuckin' books!
in re avatar--is that sir alan greenspan?
Much to the chagrin of former Americans now "globalists" in WDC here is the 10th Amendment. Eat your heart out (or your girlfriend) Janet Napolitano!
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
@ moonstears,
An interesting idea (paying interest IN bullion for bullion).
I bet they would not have to pay anywhere near 9% however (assuming they transparently allow auditing of 100% paid up gold storage in a secure vault).
2% paid in gold would probably attract a LOT of money.
Being a contrarian by temperament, usually I say that if a trend arrives at the law-makers, the bubble is about to pop. It's just that this time I'm not so sure (but then "this time is different" is said to be the most expensive stance in finance)
Well, looking at the Dollar Chart, I think the bubble is 97% deflated (only 3% value retained-and losing 8% per year to debasement), but one can only hope to see EVERYTHING deflate and your Federal Reserve NOTE reflate!
I have thought about this long and hard, and determined that "the trend is your friend". In other words, the Fed has already let the dollar devalue by 97% why would they give a crap about saving the final 3 percentage points!?
Tuco Benedicto Pacifico Juan Maria Ramirez
Help! Am travelling out of the US ... I understand that gold is not officially considered currency or a financial instrument and, thus, it is not necessary to declare its value.
But is this the way it really works? Anyoneone with experience?? Thanks!
Needs to be 'Merican coins, otherwise, bend over.
Talk to DoChenRolling Bearing. He's done this and can give you some excellent advice. I'll send him an email to check this thread....
Thank you! My inclination at this time is to declare them, thereby answering yes to the question if one is taking over
$ 10,000 outside the country. Authorities can seize everything if you have lied.
There is legally NO requirement whatsoever to have to declare ANY amount of pure gold bullion in the form of bars while entering or leaving the USA. If the gold is in the form of coins, then the face value of the coins must be declared ONLY if they exceed $10,000. The US Customs declare on their own website that gold is NOT officially considered a monetary instrument, although coins of course are.
It would be best to contact US Customs and ask them about the specific forms of gold with which you will be traveling --- record the call as well, and have the recording with you when you travel. The TSA minimum-wage Gestapo goons are not known for their financial prowess nor for their monetary expertise.
You're welcome! He and I discussed it awhile back, and as I recall, he said that you should declare the bullion value of the coins and not the face value. It seems he had an encounter with a customs agent. Best to discuss the matter with him.
CORRECT!
You can take out any amount.
But, if it is over $10,000 in value (market value, not Legal Tender amount) you MUST declare it!
I once took out well over $10,000 in gold to another country (diversification, bitchez). I had to find Customs on my own there at the airport and practically tell the "B-team" Customs Agent there what to do. I filled out the form (get to the airport, or US international airport EXTRA EARLY). After the smarty-pants dum-dum Custom Agent made some calls, she asked me how much they were worth... I told her the correct amount. She said: "Right answer." She was setting me up...
Take whatever you can/want out now, but declare it if over $10,000.
If you travel OFTEN to the same destinantion, you can do what my wife and I have done. Take (say) 5 oz each, and since you (each) are under $10,000 you do NOT have to declare it.
We have done both. Oh, and so far the TSA scanners never picked it up, not even that LARGE amount I took the first time.
EDIT:
I took it in my hand luggage. I did NOT declare it upon arrival to the destination country, but that was a risk I though I would run (rather then letting THEIR Customs seize or tax it).
Oh, and for the record, I cashed in my gold "over there" for local money and lost it gambling in casinos... Poor me.
And since I have no casino winnings, I cannot book the gambling loss.
Bummer!
EDIT:
I also took a small loss on cashing in the gold as well. Bummer again! I cannot write off the 28% "Collectables Capital Gain Tax" either.
Thanks. Am flying to Costa Rica, then by bus to Nicaragua. As I recall, one completes a form after the flight has left, not before. Have taken gold and silver coins and bullion but always careful not to exceed $ 10,000 just to avoid problems, but now am feeling the need to get as much gold out of the US as possible before the SHTF. Have noted like you that the scanners do not pick it up, but now we deal with the possibility of the the new whatever you call it full body imaging. Any experience with Costa Rica?
NO!
Find US Customs ("outgoing") at the US international Airport (Miami, LA, Houston, etc.) and get the form from them!!! Fill it out right there at the Customs window. THEY keep a copy. THEN go through TSA, with your copy at hand...
I forget the form number, but even a "B-Team" Customs Agent will eventually help you be all legal. Make sure to have AT LEAST 30 minutes or more at the airport to do this...
Re Costa Rica, they are very lax on checking incoming hand luggage, I have been to Costa R a few times. I think the CR risk is negligible... But, it is a risk.
Again, thanks. I presume it is only necessary to deal with outgoing US Customs only if my total currency plus gold value exceeds $ 10,000.
.
Of course if you don't declare it, usually cargo bags are not searched, but i'd like to know if it has been tested. I heard the story of a guy who was paying his employees with gold coins, thereby reducing the tax burden of both, and the IRS nailed him.
Actually, he was paying his employees in 90% silver (pre-65 quarters, dimes and halves) and as I recollect our beloved government "nailed" him although technically what he did was proper, but as we all know what is legal and what is doable are often two different things in a police state.
Tuco Benedicto Pacifico Juan Maria Ramirez
Not Do, hopefully he will chime in.
Just know this, if you want to keep it, DECLARE it.
Or you will have just made a donation.
If you visit Hong Kong or China, you can see many gold shops like McDonald here is US.
FYI, you can now order Gold Buffalo Coin from USmint.gov again.
As a Utah resident, what I want to see from Rep Wimmer is the formation of a legit Utah based (fully allocated) Gold and Silver futures market to compliment our new currency! ;)
W&R must be selling /es
Total head fake; all news all weekend has been bullish.
Returds don't realize the Rapture happened 2.5 years ago.
We are all in hell, pay no attention to the TASE25.
The hilarity begins when someone tries to pay for their sack of burgers at a Uduh McDonalds with a 1963 quarter.
How fucking stupid can a state be, or perhaps this article is misleading?
How stupid? Seen Illinois lately?
AHAHAHAHAHA!!! AAH... AHAHAHAHAHA!!!
Excellent mynhair!
We in Utah have yet to figure out how to "spend" a treasury at
at McDonalds, but hear investors can flee their safety for such
things at foreign currency or REAL money Gold . Can one of
you Fed Loving Genius type tell me how that works. Thats right,
its not necessary.
THe Utah law is irrelvant. The reason people do not use gold and silver as money is because of the federal tax treatment of any "gains," i.e. difference in dollar value of such metal between time of purchase and time it is spent. Anyone who tries to avoid paying 28% tax on such gains will be subject to being jailed. Anyone who tries to facilitate this tax evasion will be jailed. As long as the federal tax laws are thus, it matters not what any state wants to call legal tender. The dollar regime is enforced through brute force -- that's what fiat means.
As any law abiding comrade knows, all laws are enforced
within the confines of the homeland, When possible,
+exactly. That's why I only buy and never sell. I don't need no stinkin' taxes.
If they can get convictions in Utah.
ouchtouch: a gain is only realized with the exercise of privilege. A state sovereign can only exercise unalienable rights.
PS. Tax law is actually "Code" applicable within the District of Columbia. You know that 10 by 10 square where the US Congress has exclusive jurisdiction? Sure you do. See Bill of Rights Article 10 for further instructions and take a suck pill for good measure. Tunga over and out.
There's also the "Notwithstanding" clause. State rights can supercede the fed's rights if they choose.
"i order Utah arrested IMMEDIATELY!"
Just what we need, more paper gold. This one backed by the full faith and credit of a communist dictatorship. I trust the JPMorgue more than a bunch of communists and I don't trust JPMorgue one bit. The commie ETF will probably drive up the price until it doesn't. I don't want the price to go up yet. I'm still buying. Physical only, thank you.
Good thinking star-gazer. Keep your metals "cool, dry and nearby". Looks like the future of silver is lining up like the planets in our solar system:)
Tuco Benedicto Pacifico Juan Maria Ramirez
no, no..."it's called the State of Utah."
Yeah, I can see how a communist government will be able to set up, oversee, and ensure the free functioning of all sorts of precious metals investment structures. Why, that nation already has all sorts of track record with policing their equities!
The Chinese people, to the extent they fall for this, are the Last herd; the Greatest Fools (of this cycle) if you will. And I doubt they wil be able to keep prices up much from their participation: most of them are dirt poor, and most of the rest too cagey to swallow this. Especially in the face of silver's collapse.
Crap, missed USDHUF. Dam 'family time'.
Taking one contract at 190.12.
http://www.goldmoney.com/video/trader-vic-interview.html
http://www.goldmoney.com/video/trader-vic-interview.html
Another impatient dick. 'Puter burps be dammed; it's all W&R!
http://www.goldmoney.com/video/trader-vic-interview.html
Looks like the banksters can smell the end of the COMEX, time to move their games to Asia!
http://silverdoctors.com/
Good morning sir,
Would you like to open an account demoninated in gold/silver or would you would you prefer our irredemible paper FRN savings account yeilding .025% of taxable interest that's depriciating at a annual rate of 10%?
Looks like a "Risk Off" day tomorrow, USDX is getting another "boner".
Gold has a good chance of breaking out in Euros.
Now, if we could just get investors enamoured with gold as they are now enamoured with Green Mountain Coffee...or any of the other myriad number of retail stocks going wild these days.
Then we'll have some good action in the PM's.
LOL...
Next time I have some money roll in, Robot, I will not "trade" it in stocks. It will pay my daily needs, then some of it goes straight into AGEs.
Big picture, the world is sliding more and more toward PMs. Bubble my arse.
Not that bubble arse's are necessarily a bad thing...
Mormons and Mao ...ha ha haaa.
...Say Aha http://www.youtube.com/watch?v=fIY-qd8todk&feature=related
Utah: The Golden State :-)
My, my...The Asians have learnt the game real quick haven't they?
But most just don't see it. If America allowed convertibility of dollars to gold, then this means that the Fed will know exactly what the US citizen on the street thinks of their policies. So, if the citizens don't like the Fed's policies -- like now, because of deliberate heavy devaluation of the dollar and loss of purchasing power -- then all the citizen has to do is buy gold with their dollars to screw the Fed's policies.
As well, dollar convertibility to gold would result in a US Government that would end up fearing its citizens, which is the way it should be, rather than a government which licks the ass of the financial elite and the Big Corporations.
In other words, gold convertibilty is all good ...
damn boys......I'm moving to Utah: gold + silver are legal tender, AND you can have more than 1 wife.......it's all good...... :-p
if you have multiple wives, you're going to need lots of gold and silver to use as legal tender.
you offering?
i'm legal and tender.
.... and so the REAL gold bubble begins to inflate (I suspect).
While we are on the subject (are we ever off it!), I'd be interested to know the price at which those of you who are long intend selling their shiny stuff?
PMs are wealth Insurance! Do you "sell" your insurance policies?
From a small timer...I think i'm in until the apocaplypse. i may never sell and give it to my kids.
however, when my 62 pounder (1044 Oz bar) equals my mortgage at around $150/oz, I'll be really tempted. Its a good asset swap if the timing is right. So long as the pile gets bigger one way or another.
it's called "a debt bubble." let us sing "Strawberry Fields" while we're at it.
33% at $10,000 / oz
33% at $60,000 / oz
The rest NEVER will be sold, barring in extremis financial situations at Chez DoChenRollingBearing,,,
I was once a partner in a private equity firm that created a gold-backed currency. When the central bankers caught wind of it, they shut us down at every turn, making it impossible to transfer the value of the gold around the world. They didn't want the competition with their fiat fools gold. I hope this catches on!
Does anyone know if the Governor signed the bill into law?
how safe is the metl in the warehouse in utah? can't the gmen just grab it if they had to?
The G Men love the Mormon morons, they are zombie bitchez when it comes to their ''Articles of Faith''. One ''Article'', ''being an idiot'' when it comes to the ''government''. They are really into getting screwed (a gift from their version of their ''Mormon'' god) and screwing people in the name of their own claim of dominion (Laodiceans abound), that would be ''the government god of corruption''. Mormons (most churches/501c3) are suicides when it comes to oaths. They will sware (accept the mark of the beast) against the Word of our Father in Christ (tells you not to do that) and then surrender anyone to the beast, all for the sake of their own honor as a ''Mormon'' and a government ''employee''. They are freaks that way. I hear the Secret Service especially loves to hire freaks like that.
Chances of a Mormon making it to Heaven? Slim to none. They are too busy baptizing the dead, like Hitler or your ancestor, or somebody that rejected Christ when they lived. Getting hired to be a G-Man? 100%. http://www.youtube.com/watch?v=ZSCK4IKKFzo
...they will give up the Gold and you, in a second.