By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com …..
In my previous column, I had speculated that the Chinese government had ordered the US government to suppress gold and silver prices so as to allow the Chinese to acquire more precious metals at bargain prices.
Since then, an important revelation has come to light. Sun Zhaoxue, the president of the China Gold Association and also president of China’s largest gold mining company, made eye-opening statements at the Lujiazui Forum June 28, 2013 in Shanghai. This event is a major annual conference attended by prominent Chinese economists.
Waiting for translation into English resulted in the delay in reporting Sun’s comments. After laying out some monetary history, Zhaoxue effectively states that the US government is suppressing gold and silver prices as part of its effort to maintain the US Dollar’s status as the world’s reserve currency.
You can read the source article at http://www.ingoldwetrust.ch/Ahaoxue-zhaoxue-us-intends-to-suppress-gold-to-ensure-dollars-dominance.
The way that Chinese policy is revealed is only on a delayed basis, and then typically by a minor personality. So, when a professor studying China’s reserves six or seven years ago published a paper advocating that China start accumulating more gold reserves, what was really happening is that China had already been aggressively purchasing gold reserves. China had been doing so since 2003, which I reported in 2005 after receiving sufficient corroborating evidence. The Chinese government did not officially admit until 2009 that it had been accumulating gold reserves since 2003.
I consider Zhaoxue’s statement to be possible support for my speculation that the Chinese government has ordered the US government to suppress gold and silver prices. For Zhaoxue to make such a remark indicates to me that 1) the manipulation of precious metals prices had been going on for some time, and 2) that the US government was not in a position to stop the suppression on its own initiative.
Zhaoxue also stated that the US government is engaged in a currency war. In his remarks, he considers the Euro to be the threat to the primacy of the US dollar. If so, that could explain the inroads that China made during 2013 to engage in more trade with Eurozone nations where payments were made in Chinese yuan rather than in US dollars. In effect, the US and China could be using European trade as a battle zone in the currency war. Since the time that the European Central Bank made an agreement with the Chinese government, the Euro has been appreciating against the dollar. Of course, this all could be a coincidence.
As one of my fearless predictions for 2014, I forecast that it will be revealed that there was a secret agreement between China and the US government for the US to suppress gold and silver prices to enable China to add to its holdings at lower prices. The political fallout in the US should this prediction be true will doom the political aspirations of everyone in the know who kept it quiet. I look forward to seeing developments on this issue.
Patrick A. Heller was honored with the American Numismatic Association 2012 Harry J. Forman Numismatic Dealer of the Year Award. He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (under “News & Articles) . His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.