The Gold-Backed-Oil-Yuan Futures Contract Myth

BullionStar's picture

On September 1, 2017, the Nikkei Asian Review published an article titled, “China sees new world order with oil benchmark backed by gold”, written by Damon Evans. Just below the headline in the introduction it states, “China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry”. Not long after the Nikkei piece was released ‘the story’ was widely copied in sensational analyses throughout the gold space. However, ‘the story’, as presented by Nikkei, doesn’t make sense at all. Allow me to share my 2 cents in addition to what I shared previously on the Daily Coin.

All the rumours and analyses on gold, oil and yuan that are making rounds now in the blogosphere are based on the Nikkei article. But the Nikkei article itself contains zero official sources. Basically, the whole story has been invented by Damon Evans. So, let’s start addressing the claims made in the Nikkei piece.

It’s true that the Shanghai Futures Exchange (SHFE) – not to be confused with the Shanghai Gold Exchange (SGE) – has recently set up a subsidiary called the Shanghai International Energy Exchange (INE), for foreign enterprises to trade a new oil futures contract denominated in yuan which is expected to be launched later this year (product symbol: SC). Specifications of the contract can be read here. In all official sources, though, there is no mention of gold. Officially this contract is not “convertible into gold”.

The only vague connection I could find is that the INE “will accept foreign exchange as … trading margin”. If this includes gold – which technically is not foreign exchange – we will see. In any case, even if gold will be used as trading margin that doesn’t mean the contract is “backed by gold”.

The Nikkei headline clearly reads “China sees new world order with oil benchmark backed by gold”. In this context, the word “backed” for most readers will refer to a fixed parity. In the past, for example, there was a fixed parity between gold and the US dollar; this meant the dollar was backed by gold through the US Treasury; dollars could be redeemed for gold at a fixed price and vice versa. In case of the Nikkei story it would imply a fixed parity between yuan, or oil (this is not clear), and gold. But how would China back anything with gold? Would China’s central bank (the PBOC) defend a fixed price of gold in yuan? And it would do so through an oil futures contract? Impossible.

Quickly ‘the story’ by Nikkei transformed through the blogosphere where analysts suggested the gold in SGE vaults would back the yuan. The problem with this theory is that gold in SGE vaults, (i) isn’t owned by the Chinese government, and (ii) isn’t allowed to be exported from the Chinese domestic market (not very convenient for foreign oil producers). Then analysts suggested the gold in vaults of the Shanghai International Gold Exchange (SGEI) would do the job. But SGEI gold, (i) isn’t owned by the Chinese government either, and (ii) can only have been sourced in the international gold market, payed for with US dollars. So much for the oil-gold trade circumventing US dollars as presented by Nikkei.

Now, let’s zoom in on the logic behind the phrase “crude oil futures contract priced in yuan and convertible into gold”. Futures contracts are an agreement between two traders about the future price of i.e. a commodity (usually denominated in a currency, in the case of the INE contract yuan). There can be no third asset, commodity or currency involved in a futures contract. It cannot be that upon physical delivery of SC – when oil is exchanged for yuan – one of the two traders will say, “you know what, I don’t want yuan (or oil), I want gold”. And, needless to say, the Chinese government will not mingle in the futures trade. The PBOC will not jump in when a SC short or long demands gold. Again, the new INE oil futures contract denominated in yuan will have nothing to do with gold.

What is possible is that when a SC short delivers oil in exchange for yuan, he is then free to buy gold with the proceeds. One can do so directly on the SGEI where three physical gold products denominated in yuan are listed.

Though, be reminded, currently no oil producer is prohibited from buying gold (or something else for that matter) when paid in US dollars. That’s actually the very function of money. Money is used, since ancient times, for what is called indirect exchange. Stuff is sold for money, and with that money all other stuff can be bought. Gold can be bought with the proceeds from oil sales since … forever. An oil futures contract will not suddenly change all that. In the Nikkei piece one analysts was quoted saying:

It's a transfer of holding their assets in black liquid to yellow metal. It's a strategic move swapping oil for gold, rather than for U.S. Treasuries, which can be printed out of thin air.

But oil producers are free to buy gold with their moneys (yuan or dollars) with or without the new futures contract. The INE contract will not remove an obligation i.e. for Kuwait to invest in U.S. Treasuries. So, what will change when this new oil-yuan futures contract is launched?

Also bear in mind that futures are hardly ever physically delivered. Futures are used for hedging and speculation. In general, commodities are physically traded in the spot market. Oil for dollars, chocolate for Swiss francs, Dutch cheese for euros, etcetera. Futures contracts are not necessarily needed to sell oil for yuan. Nikkei wrote:

China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan.

But effectively, Venezuela, Russia and Iran can sell their oil to China in exchange for yuan as of this very moment, before the oil-yuan futures contract is live. They also could have done so three years ago. So, in my very humble opinion the new INE contract will not be the instant game changer everybody is talking about.

Perhaps also noteworthy, one commentator on the Nikkei story wrote:

China just announced that any oil-exporter that accepts yuan for oil can convert the oil to gold on the Shanghai Gold Exchange and hedge the hard currency value of the gold on the Shanghai Futures Exchange.

My comments on this paragraph:

  1. As shown above China hasn’t announced anything but an oil-yuan futures contract. Gold has nothing to do with it.
  2. Offshore yuan can technically be spend on gold at the SGE, but gold in the Chinese domestic market (SGE system) is not allowed to be exported. Gold from the SGEI is allowed to be exported but is bought in the international market via yuan with US dollars.
  3. Foreign enterprises, like oil producers, cannot hedge gold on the Shanghai Futures Exchange. The SHFE is not open for international customers. There’s only a spot deferred product listed on the SGE, which is comparable to a futures contract, through which foreign enterprises can hedge gold in yuan. But why would oil producers buy gold and subsequently hedge the metal in yuan. Their end position would be merely exposure to the price of yuan. Why then, not buy a yuan denominated bond with an interest rate? Or hold gold without the hedge?

Prior to publication of the Nikkei article in question I got an email from Evans. He asked me if “China will tie a gold guarantee to the new oil contract?”. I replied, “No. I would be surprised if they did that”. But my quote wasn’t selected for the final publication. The piece only quoted analysts singing the same song. In my view, that’s not what sound journalism is about. First of all Evans didn’t use any official sources, and second he picked analysts that confirmed his bias.

Aside from all the inaccuracies in the Nikkei article, what stands out for me is that indeed a large number of countries is willing to trade oil in yuan and the new INE futures contract is important for this development as it allows oil producers and users to hedge directly in renminbi. And so the INE contract will support oil for yuan trading. That’s what the article should have focussed on.

Although not much has happened yet*, it’s clear Asia wants to get rid of the petrodollar, and it will be interesting to see how this initiative develops.

*Still the majority of global trade is conducted in US dollars, and most foreign exchange reserves are in dollars too. The share of yuan payments, compared to all other currencies,  tracked by payment service provider SWIFT were under 2 % in June, down slightly from two years ago. (I have no data on CIPS payments.)

Swift share of global payments

And even China has added over $107 billion in U.S. Treasuries since November 2016.

US Treasuries held by foreign central banks

If you would like to learn more about the Chinese gold market and the SGE(I), please read my recently updated Chinese Gold Market Essentials Guide

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. . . _ _ _ . . .'s picture

"China’s pricing of assets in yuan – coupled with the Hong Kong Stock Exchange’s plan to sell physical gold contracts priced in the currency – will create a system where countries can sidestep the US banking system, Tinker said in an Aug 30 note.
“Having accepted payment for oil or gas in yuan, the seller, be it Russia or Saudi Arabia or anyone else for that matter, does not have to worry about having excess yuan, they can simply trade it back into gold,” Tinker said."

Conflation rears its head, again.

Maestro Maestro's picture

Because they can't exchange their dollars for gold by simply buying physical gold with them today? Or paper gold, if they so wished?

Troll.

. . . _ _ _ . . .'s picture

You misunderstood my comment, and I'm no troll.

fazsha2's picture

I don't know why everyone is confused about this. If oil can be purchased and hedged with a gold futures contract and neither require the use of the dollar, then demand for the dollar will go down, and then the value of the dollar will decrease, which will incentivize even more traders to dump dollars. Previously there was an 'artificial' demand for the dollar as people always had to acquire dollars FIRST to buy oil.

The other thing people should always be aware of is that the IMF allows each member to choose its own method of determining the exchange value of its money. The only requirements are that the member doesn't base the value of its currency on gold, an that it informs the  other members about precisely how it is determining the currency’s value. This curious requirement is not included because gold is BAD, but rather because it is too GOOD - it allows you to show the market how stable your currency is, perhaps getting stronger against even the yellow metal                                                                                                                                                                                                                                                                                                                                                                                . The US doesn't want that, especially if they want to de-link the price of gold to anything. The best we have now is  to  buy physical and hope that you're rewarded when the paper gold contracts are settled in cash.

fazsha2's picture

I don't know why everyone is confused about this. If oil can be purchased and hedged with a gold futures contract and neither require the use of the dollar, then demand for the dollar will go down, and then the value of the dollar will decrease, which will incentivize even more traders to dump dollars. Previously there was an 'artificial' demand for the dollar as people always had to acquire dollars FIRST to buy oil.

The other thing people should always be aware of is that the IMF allows each member to choose its own method of determining the exchange value of its money. The only requirements are that the member doesn't base the value of its currency on gold, an that it informs the  other members about precisely how it is determining the currency’s value. This curious requirement is not included because gold is BAD, but rather because it is too GOOD - it allows you to show the market how stable your currency is, perhaps getting stronger against even the yellow metal                                                                                                                                                                                                                                                                                                                                                                                . The US doesn't want that, especially if they want to de-link the price of gold to anything. The best we have now is  to  buy physical and hope that you're rewarded when the paper gold contracts are settled in cash.

Maestro Maestro's picture

1. What do you buy with, oil or gold futures contracts denominated and/or priced in dollars? Beads?

2. How do you determine your currency's exchange value when it is precisely NOT defined in any form or fashion, just like all other currencies extant? (And inquiring minds wanna know where is it that the IMF requires members to define the value of their currencies.)

3. How can ANY contract be lawful or even possible in real terms, when based on, or defined in terms of, UNDEFINED currency which is literally worth less than nothing?

(Alert: CIA's best and brightest above.)

fazsha2's picture

I don't know why everyone is confused about this. If oil can be purchased and hedged with a gold futures contract and neither require the use of the dollar, then demand for the dollar will go down, and then the value of the dollar will decrease, which will incentivize even more traders to dump dollars. Previously there was an 'artificial' demand for the dollar as people always had to acquire dollars FIRST to buy oil.

The other thing people should always be aware of is that the IMF allows each member to choose its own method of determining the exchange value of its money. The only requirements are that the member doesn't base the value of its currency on gold, an that it informs the  other members about precisely how it is determining the currency’s value. This curious requirement is not included because gold is BAD, but rather because it is too GOOD - it allows you to show the market how stable your currency is, perhaps getting stronger against even the yellow metal                                                                                                                                                                                                                                                                                                                                                                                . The US doesn't want that, especially if they want to de-link the price of gold to anything. The best we have now is  to  buy physical and hope that you're rewarded when the paper gold contracts are settled in cash.

Maestro Maestro's picture

1. What do you buy with, oil or gold futures contracts denominated and/or priced in dollars? Beads?

2. How do you determine your currency's exchange value when it is precisely NOT defined in any form or fashion, just like all other currencies extant? (And inquiring minds wanna know where is it that the IMF requires members to define the value of their currencies.)

3. How can ANY contract be lawful or even possible in real terms, when based on, or defined in terms of, UNDEFINED currency which is literally worth less than nothing?

(Alert: CIA's best and brightest above.)

Dragon HAwk's picture

Settle is a funny word. If I owe you 100 Bingo bucks, and You owe me 100 Bingo Bucks back, and we both agree to go have a beer and Forgetabout it, or pass some small change, we have Settled

highwaytoserfdom's picture

 

As I remember the 2013  SPR was brought into play..    Now  think the average price is 29 bucks or so.   Now the control freaks have gone to town on trying to control the price of oil for the producing companies  Yea just ask Hunter Biden...   Now if there is going to be the electric self driving stuff then electrical demand is going to surge..  Don't think it will happen Tesla credits are going to force into Bankruptcy. 

Domestic oil production is booming, and the Strategic Petroleum Reserve has enough oil to cover 110 days of net imports—well above the 90-day threshold it is required to cover.   Now Make a deal...   

If these hypocrites really cared about the environment then they would look at combustion technology these gun guys are holding us back we should be in flying cars by now. 

Maestro    LUV  the rant.....     do it myself    hey the Woodward books Maestro  and Vail (Casey CIA) pretty much define the AlanBenFelon cabal of Krugman guns.. 

Maestro Maestro  like to have a rant with you we could have Mouchie  you know got rid of rotten Penis  and  theb told NYT reporter to take yoga lessons so he could go blow himself...    Luv it.....  

 

R2U2's picture

Is the petrodollar is backed by gold? It absolutely is. Nothing else explains the 90% correlation between the prices of gold and oil. When the USD price of gold goes up so does the price of oil in USD to maintain the implicit oil/gold “peg.”

http://www.macrotrends.net/1334/gold-prices-vs-oil-prices-historical-cor...

 

Maestro Maestro's picture

Wasn't oil about $120 a barrel when gold was around $1800 an ounce? Anyway, it's all so pointless now...

fangulos's picture

That was the good'ol time when a Detroit worker can raise his whole family and GM can dish out 80-100 cars in a month, money is a measure of labor force, when your labor forces consists of mainly niqqers & spic & unicorns, well good luck then

Maestro Maestro's picture

That was decades before that...

Herodotus's picture

Henry Ford was paying his workers the equivalent of $308 per day in 1914 with no income taxes, union dues, social security, or medicare deducted from their paychecks.  Detroit was a very prosperous town then.

Greenspazm's picture

Correlation is not causation.

jeff montanye's picture

and oil and gold's correlation doesn't have much to do with the concept of a "gold backed petrodollar".

additionally the correlation itself has become near zero or even negative in recent years.

skipweston's picture

What the author does not mention is that China belongs to the London Bullion Market Association"LBMA" the contract settlements will be at the LBMA. This is how it will work, the Oil suppliers Russia, Venezuela, and Iran will trade oil for the Yuan, then bring their Yuan's priced in Gold to LBMA. The LMNA will not want to settle in the Yuan, but convert to US Dollars at a premium, China will provide the dollar settlements because they have Trillions of US Dollars. This achieves three objectives. 1. China unloads their worthless US Dollars. 2. The Global demand for the Yuan will increase, while the dollar slowly decreases. 3. As the price of Gold rises the Oil supplies will increase their demand for Yuan Contracts. China has been hoarding Gold for over two decades for a reason. They will use their Gold to dethrone the King Dollar.

Maestro Maestro's picture

And this asshole says the Chinese will settle their oil contracts in dollars after all but not before they make their hapless buyers incur round-trip currency conversion fees on top.

Are the planets aligned funny tonight? Everybody's on a roll.

Greenspazm's picture

Copied from Hugo Salinas Price, who also fell for this bullshit story hook line and sinker?

"then bring their Yuan's priced in Gold to LBMA"----- WTF?

jeff montanye's picture

this seems unlikely, given the shanghai gold exchange china just opened, with much labor, to convert yuan to gold.

also, eventually, china wants to have gold priced apart from the crooked naked short dollar futures markets, comex and lbma.

i.e. much higher

Dragon HAwk's picture

Barter is when you sell me  3 oil tankers worth of Oil and i send you  5 cargo containers full of consumer products.. the Fiats just keep score of the volume

Maestro Maestro's picture

No, Opels for me. Fiats break down too much.

BobEore's picture

Wouldn't it be the height of irony...

if the guy who was one of the originators of the new style "internet journalism" ... which eschewed the old style "boots on the ground" journalism

for a computer screen and telephone hook up... whereby one "traveled" around the world in search of quotes and factbytes from improbable sources... like government spokespersons, banking authorities and ... fellow 'new style internet journalism' scribblers, *

got one-upped by a kid who decided to go that one step further on the road to ruination - of the real - by simply making shit up and posting it to an audience of half wits eager to be 'convinced' that they had ALWAYS BEEN RIGHT - bout \GOOD/panda banker superhero dudes comin to rescue their sorry asses from the penury which awaited them due to being taken to the cleaners by the VERY LATEST \BAD/B\NKSTERS scam ...

thereby becoming the latest in a long line of "gold gurus" ... whose clay feet inevitably begin to show, once some ink-stained wretch too stupid to know how the game is paid^^ these days...

throws a monkey wrench in the whole thing by insisting pon pointing out the obvious facts. Oh... the pathos of it all.

ZH... AND THE GOLDBURG SHUFFLE.. \irony-free entertainment/

it doesn't get better than this - it REALLY DOESN'T

* (THE BACKGROUND STORY TO THIS TALE O WOEFUL ONEUPMANSHIP) https://storify.com/SuaveBel/devious-dervishes-of-banking-pt-one \\altho Mr K doesn't append his name to this new piece, it's clear who the author be\\
^^ oops. mea culpa, I meant to write 'how the game is 'played' nowadays/ no, really, I did! dam keyboard\\\\\

buttons/muttons

Maestro Maestro's picture

I'll take that as prima facie evidence that you're the one who stole my beer.

BobEore's picture

U know...

its worse than that maestro\ \ see...

I blew the whistle on a whole new industry... of scribblers scribblin for da $power... who thought they'd NEVER BE called to account for their serial distortions and fibbin for a livin.

\\some folks got burned, in the process.// Only way some folks learn... so it seems.

Bobby/Yunus/Rogue/\chiva/

Cooper.

https://storify.com/SuaveBel/massive-breakouts-are-always-just-around-th...

Comin for the \capt andersons & their boys - one post at a time/... cause on a long enuff timeline...

there's enuff rope to go round!

(I SAIS>>> PULL THE THREAD - NOW!)

Maestro Maestro's picture

This was the most interesting thread on Zerohedge. And you had to go and give them ideas... :o)

Greenspazm's picture

For fuck's sake man talk sense.

BobEore's picture

sUrE dude... whatever ya need. we here to help.

Koos and I have a longish history... going back to when both he and Steve St Angelo were actually INDEPENDENT BLOGGERS...

with interesting things to say bout the metals...

and I was a guy who kept having my fringe websites get DNS-attacked to death soon as I launched em... jus like what

USED TO happen to Koos...

for he n Steve "saw the lite" ... and got rite... with da man! To which sad process I was an intimate witness... being in direct contact with both said parties... and therefore shocked n awed by what I saw

happening before my eyes. So, I set out on a lil 'truth jihad' kinda adventure... to try n rebalance the playing field... to the favor of all those many thousands of westerners being duped daily

by the worst kind of 5th columnist psyops paid disinfo hacks the $power could BUY

suffice to say... Stevie n Koos don't like me much no more. Neither do their mind-wiped "followers" - suits me jus fine... as I don't hang much with traitors...

to the brotherhood of bar n coin.,,, knowin that the BIG KARMIC WHEEL never fails to come round!

ps - Over the last 4 years, since waking up to the betrayal of goldenholders interests by these scumbags whose FEET FEEL THE HEAT of being held to the fire of accountability...

I've assembled a whole library of 'talking sense' dudely! Which youse all fear to read any of --- knowing that the contents blow the goldbuggers fishbowl all ta hell!

Yur move.

BobEore's picture

They blinked.

Less than 10 minutes after that retort...
the thread is finally pulled. Lac o interest? hehehe... I don't think so!

Lack o cojones for more mano a mano.... a la zee fabled "fight club?"
\right./

till next time lil fellas!

Jannn's picture

BobEore has a lot of names on the internet. Like Bel Suave and Yunus Emre. 

My name is Jan Nieuwenhuijs. My internet alias is Koos Jansen (no secret https://www.bullionstar.com/blogs/koos-jansen/biggest-newspaper-netherla...) and I'm the writer of the article above. One of Bob's goal's in life is to blame me for ... whatever. He does so by commenting on blogs where my writings are published and saying I'm a charlatan - with a lot of "incoherent words" so it doesn't show that obvious none of what he says makes any sense. He can also comment directly on my own blog (https://www.bullionstar.com/blogs/koos-jansen/the-gold-backed-oil-yuan-f...) but strangely he never does that. He usually trolls me on Silver Doctors on Zero Hedge.  

Our conversations on HIS own blog (where I have courteously debated him) he has taken offline. https://diaspora.podzimek.org/people/dadfb4e05f2401329da000012e2ff1fe 

Good luck carrying the hatred Bob. 

BobEore's picture

Heat...and hate...\Good luck carrying the hatred Bob/

are two separate words Jan/Koos.... and your confusing them is symptomatic of what's really wrong - with this issue in particular, and the whole style of the 'new internet journalism' in general/

it has been applied to the 'opaque world o gold' especially!

Keeping up the HEAT - as opposed to the totally spurious use of emotion-based rhetoric, so beloved of the goldbugger caste..

is what matters here. The TOTAL LACK of contrition on the part of ALL those who sold a bill of goods to 'investors' for more than 5 years now - the 'writers... the \stackers/ seeking to inveigle others into their world of pain/no gain... the outright shills of the %power... of all of them

not a single one has stepped forward to admit they were just plain WRONG...

bout the timing, the markets, the hahaha... 'fundamentals' or the identity and roles of the players involved in the long standing manipulations of metals. Notaone.

Exposing that FACT to the light of day here - and elsewhere - is the special privilege of those who practice \journalism/ \koos/jan - the ol skool style fact-based reportage without ties to

bullion sellers, special interests... psyops... or usual suspects. I will continue to KEEP THE HEAT on you... and all others who have played fast n loose with the facts about gold - in china or anywhere else in the world ... where you have attempted to bluff your way into credibility with a computer screen and phone connection to suspect sources.

There are very good reasons why I prize my anonymity ... by the way. You might want to read the lil blurb which ZH ?tself sets out here to g?ve ?ns?ght ?nto the need for that qual?ty when wr?t?ng ?n todays world o fake med?a

?t has allowed me to report from ground level on geopol?t?cal developments wh?ch far outwe?gh the s?gn?f?cance of the f?shbowl perspect?ve prevalent here...

but tie in nicely with the overall theme of how mysterious forces use the 'internet' and its' scribblers - to advance an agenda whereby the west will be denuded of wealth and power, in favor of a new flavor of global fascism favorable to a $power which has infected cultures all over the world from time immemorial.

Those who work to advance the cause of that power SHALL NOT be allowed to go unaccountable, as is the current - mistaken - belief here. If you haven't figured it out yet...
this just in - I fear not - yur army of duped supporters, access to media outlets, the weight of fishbowl opinion, or any of the other 'advantages' which accrue to those who have taken their 10 talents of shiny.

I write in defense of the lil guy - you write to please your '15,000 followers' and the myths they cherish. I'm good with that\\on with the show!

ps - if you are having trouble accessing any of my work... on sites long taken off line... let me help out!

https://storify.com/SuaveBel/open-letter-to-koos-jansen
https://storify.com/SuaveBel/the-golden-elephant-in-the-room
https://storify.com/SuaveBel/how-the-world-is-being-fooled-by-phony-oppo...

always a pleasure!

Code Duello's picture

+10 for the use of inveigle!

galant's picture

I wonder if you make too much of the absence of the word gold in these negotiations.

The game-changer surely is that China has convinced their oil suppliers to accept yuan in payment.

That is the significant fait accompli.

How or where the oil suppliers then convert yuan to gold hardly seems an issue.

They can always buy gold for yuan or another intermediate currency.

The LBMA scenario outlined by Skipwestern above seems credible.

I have enjoyed your well-researched articles on China but this time your personal involvement seems to have distorted the picture.

 

jeff montanye's picture

it is also important to have a strong gold for yuan exchange, and, ultimately, for other currencies, to bring about a fairer price for gold of which china is both the biggest producer and the biggest holder, again as a government and, likely, as a people.  

the u.s. is running provocative naval exercises on both sides of china's ally north korea, not to mention right off of china as well.  the u.s. has for decades run roughshod over the rest of the world and china has likely grown quite tired of this treatment.  one way to back down the u.s. without making one belligerent gesture is to fuck up the petrodollar so the u.s. has to rise or fall on its own balance of trade which has been in deficit since the '70's.

Maestro Maestro's picture

How many trillions of dollars the Chinese still have and add to consistently, while dubious creatures like you claim that the Chinese aim to destroy the petrodollar?

Greenspazm's picture

Your article is a long overdue debunk.

The Nikkei Asian review story indeed appears to be in good part bullshit and was probably planted. No official Chinese sources whatever, and not a whisper of "gold convertibility" of any "yuan contracts" by any verifiable source. However, it was parroted hundreds of times on the web.

Surprisingly Hugo Salinas Price fell for it too hook line and sinker and enthused about it in three of his blog articles on plata.mx.com, including a separate post claiming to provide original sources and proofs for the gold part but which actually didn't. A pity,  I would have credited him with more discernment.

 

Latitude25's picture

Who's who?  Try being more direct/intelligible.

BobEore's picture

Who's who?
Good question. Sortin it all out is a Sisyphus-like task/but somebodys' got to do it\otherwise...

the lil guy wouldn't have no friends at all! \lesee shall we\/

You got guys who get paid to write stuff favorable to the interest of COMPANIES what need to MOVE INVENTORY... on a regular basis... and in the face of declining public interest... \the gold guru set, who set up sites pretending to be 'independent voices' presenting 'jus the facts' information... or simply outright contract to sellers' sites. Some of whom indeed \did/ start out as 'independent voices'

but then 'heard voices' whispering sweet somethins in their ears... bout how a guy could pay the bills and have a lil bit left over,,, to say... buy some shiny with.

Then you have guys with a professional interest in the world o gold, holding forth on the subject with some varying degree of objective reportage. Louis of Smaulgold or Bron formerly Perth come to mind. As they discovered ago - there's no market for that kind of writing. Cheerleading moon shots and phony geopolitical narratives is where the action is!

Then there's the total outlaws. Workin from the fringes of the now dead n buried craft of -journalism - ol skool style...

to correct the many distortions, delusions, and outright LIES presented in the course of every single day, for years on end. The only needed reward for which

is the satisfaction of knowing that one did what they could... to try and save several generatins of lemmings from jumpin over the wiley e cliff... in search of that elusive 'sure shot' that their media masterz promised was waiting for them!
https://storify.com/SuaveBel/trx-and-the-death-of-illusion

Try being more direct/intelligible...
[psst! he's back. Pull the thread\pull it\\

assistedliving's picture

Damon Evans and I are long gold

OpenThePodBayDoorHAL's picture

The "Chinese gold-backed currency" myth is stupid, when the gold standard ended the last guys out got screwed, for a new gold standard the first guy in would get screwed, everybody else could just hit Ctrl-P, exchange for yuan, and get free gold.

breaktwister's picture

I would love to see this, we would have super yuan and all other fiats would be worthless. It would take 100million usd to buy 1 yuan. This would be the reset. Gold would be priced at an huge multiple of its current usd value.

jeff montanye's picture

what seems more likely is oil for yuan and gold for yuan in deep, transparent markets with futures contracts and, if not delivery only, no naked shorting.  so, in effect, oil for gold and gold for oil.

once these two markets, oil and gold, are made less crooked, the foreign currency markets and the commodities markets will adjust to values based on trade balances and interest rates, real supply and real demand (no naked shorting).  

this should be positive for precious metals and negative for the u.s. dollar and fiat generally.

Maestro Maestro's picture

The Chinese are more crooked than the Americans. There would be no COMEX without active Chinese collusion to manipulate prices lower. Of course you hasbara trolls knew that already: https://www.sprottmoney.com/blog/the-new-shanghai-gold-exchange-does-any...

BobEore's picture

HEY!
YOU caught that one too huh?

Jeffy went 'off reservation' with that story\' \bouy shoulda known who butters his bread! \\ luckily,

however, Jeff don't write those kinda stories no more... he's back in the bag... with the rest of the

"give us your dollars - we'll sells ya some gold" gang.

Same as it ever was!

ABC///

ALWAYS BE CLOSIN

Maestro Maestro's picture

All you little shits on Zerohedge,

You've been downvoting me for the better part of a year,

Because I've been telling you,

"As shown above, China hasn't announced anything but an oil-yuan futures contract. Gold has nothing to do with it."

Go fuck yourselves, every single stupid Israeli and Russian cocksucking, ISIS-generating-mindset-infested Western vermin.

Go fuck your mama up her ass then stick your tongue up her personal sewer system to taste the genes she condescended on you in your rotten semen.

YOU = ISIS

John Kerry-Heinz's picture

Tonights Fight Club session has commenced.