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Robert Lenzner: The Chinese mean to control the global gold market
By Robert Lenzner
Forbes.com
Tuesday, September 27, 2011
http://www.forbes.com/sites/robertlenzner/2011/09/27/the-chinese-mean-to...
Get ready for the Pan-Asia Gold Exchange, scheduled to open in June 2012 in Kunming City, Yunnan Province -- the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China's five-year plan -- which means it is part of China's strategy for dominance in global financial markets and the global economy.
Pan Asia will allow Chinese to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. All 320 million customers of the giant Agricultural Bank of China will simply be able to use their renminbi, the Chinese currency, from their bank accounts to trade gold. Sounds bloody dangerous, doesn't it?
It means that the spot market in gold could be headed for China -- and away from London's Metals Exchange or the Comex in New York. I'd like to know who is going to oversee and regulate all this action. For example, when the Comex raises margin requirements to dampen speculative fervor, will China be governed by that? I doubt it very much.
... Dispatch continues below ...
Lewis E. Lehrman on How to Solve the U.S. Debt Problem
Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program.
Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust.
Lehrman says: Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust."
To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:
http://www.thegoldstandardnow.org/gata
In June you'll be able to buy spot gold or futures contracts in China. It also means that the Chinese currency -- not dollars -- will for the first time become the ruling currency used in one of the major speculative commodities of our age. All eyes will be on the influence of the gold trade in China rather than New York, London, Switzerland, or South Africa.
This is another reason for registering the reality of gold as a trading vehicle, an investment for households, central banks, hedge funds, endowments -- another bullish force powering gold prices higher.
No wonder George Soros has bought back some or all of the gold position he sold around $1,600 an ounce.
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Robert Lenzner writes the StreetTalk column for Forbes.com and anchors the StreetTalk video show.
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