Is Strategy of Asian and Islamic Gold Buying Taking Final Form?
By James Sinclair
The key factor in China is not the initiation of a gold exchange. That alone would not be anything much unless two other events also had occurred. The real news is the that the Chinese regime is finalizing what in their terms is a turn to the right.
Compare this new environment to Tianamen Square so that you will comprehend it in terms of motion and trend. The Chinese have adjusted their legal code, removing state assets from a privileged position above private assets in legal protection. That translates into the right of private property.
The second event, as silly as it sounds, was the criminal charge against a famous Chinese actress for failure to pay taxes. Until now no one of Chinese citizenship or domicile has paid taxes. Taxes are part of the Chinese legal code but traditionally Chinese citizens have not paid much attention to them.
Like any celebrity criminal case, this is simply a message sent to the populace for the most significant impact.
These two events plus the legalization of investment in gold and storage facilities in China make for a major event. It is major because China has a history of currency collapse and the cultural memory of the Chinese people is infinite.
We now have in gold:
1. The five elements of a gold bull market.
2. The wild card of the Islamic gold dinar.
3. The longshot of the resuscitation of the gold cover clause should the U.S. dollar drop below 90 on the USDX.
In addition to these factors, we now have:
4. A gold-backed if not convertible Chinese currency or measure for inter-Asian trade as part of a long-term plan of economic ascendancy.
The gold dinar might simply be a test with quiet Chinese support.
Therefore China's opening of trading in gold is much more than another exchange. It is another stitch in the cloth of what this gold market is really all about. It is a move toward the remonetization of gold by Asian and Islamic interests.
Now do we know the plan of Dr. No and Hung Fat?
I never believed that they were buying gold just for economic reasons. Since 1995 they have been buying all the gold sold by the gold producers, the gold cartel, the central banks, and discouraged gold investors. Is their plan for huge profit now showing itself? Has their almost inexhaustible source of funds also been Chinese?
Time will tell, but my sources will know. I may have to take a trip to Asia soon. Stand by, because when I am sure of what is happening, you will also know, assuming that the price of telling you is not too steep.
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James Sinclair is chairman of Tan Range Exploration, whose Internet site is www.TanRange.com.
