Exclusive: China Is Testing Comex Legitimacy
China's Game of Chicken With the US Handicapped
Either price rebalances at the higher level, or the metal will continue migrating from West to East.
Intro
New Abstract: China is Forcing Things Now.
The Fractional Reserve Commodity Bank-Run
Damned if they restrict….
Dammed if they don’t.
China’s Game of Chicken
Uncomfortable Choices
Reprice or Run Out
The Third Option
Plus: TD CTA analysis
Intro:
The title of this note ties several observations together being watched for some time. It is not conjecture. Neither does it purport to claim to know China’s intent.
What it does predict, is a giant face-off in exchange legitimacy down the road between every commodity exchange outside the US, versus the US itself.
The easiest place to see this in is the US Comex versus the SGE, DBE, and other BRICS exchanges.
In predicting this, or at least trying to handicap its possibility, certain events (Comex drains, Shanghai premium, China taking Gold delivery, and so on) have made it clear the US will have to make a decision soon.
And while it is China forcing this decision on us with their actions, if is we who set the table for the current events with our actions for decades.
New Abstract: China is Forcing Things Now.
The US Dollar’s global dominance is in no small part facilitated by its pricing hegemony over globally-traded commodities.
A way that global dominance can be broken is by simply (but not easily) calling the physical commodities in the US over to oneself. This also happens to be a logical end-game in the Collateral crisis that Zoltan Pozsar alerted us to — and we in turn alerted GoldFix readers to — in 2022.
That resource depletion is happening right now at an accelerated pace in Gold it would seem.