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Alasdair Macleod: The geopolitics of gold

Section: Daily Dispatches

By Alasdair Macleod
GoldMoney, St. Helier, Jersey, Channel Islands
Thursday, June 3, 2021

A number of events are coming together that are set to push gold prices higher. 

Besides a combination of continuing inflationary policies and massive future budget deficits undermining the dollar, by closing down derivative market activities new Basel 3 regulations appear set to deflect some demand into physical metals. Furthermore, liquidity in gold markets will contract, potentially making prices more volatile

... Dispatch continues below ...


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This article looks at how these developments will affect the undeclared but very real financial and propaganda war being waged by America against China.

China is moving on, enlarging its own middle class, which will benefit from a stronger yuan, much as the German and Japanese economies did between 1970—2000. Having dominated economic developments until now, the export trade is becoming less important. With this dependence lessening, the argument in favour of a coup de grace against the dollar by China revealing its true gold position is increasing.

In this article China's undeclared gold reserves are quantified, and we can be confident that China has at least 20,000 tonnes "off balance sheet." For China to openly declare her gold position always was her final, almost nuclear option in the financial war waged against her by America. 

Unwittingly, by diverting demand from paper gold to physical bullion, Basel 3 may have brought forward that day by default. ...

... For the remainder of the analysis:

https://www.goldmoney.com/research/goldmoney-insights/the-geopolitics-of-gold?gmrefcode=gata

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