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The (New) Shanghai Gold Exchange: Does Anything Change? - Jeff Neilson

The (New) Shanghai Gold Exchange: Does Anything Change? - Jeff Neilson
By Jeff Nielson 4 years ago 3654 Views No comments

September 26, 2014

Since the original inception of the Shanghai Gold Exchange on October 30, 2002; Western investors in the gold (and silver) market have had high hopes that this Asian rival to the ultra-fraudulent New York and London markets would help to bring some measure of legitimacy and rationality in pricing to the precious metals sector. They have been sorely disappointed.

Rather than “changing” the international gold market in any way; the Chinese government and the directors of the Exchange itself have shown much more interest in becoming part of this crooked gold trade. Indeed, at a 2004 LBMA conference held in Shanghai, the Governor of China’s central bank, Zhou Xiaochuan announced a “three transformations” strategy to develop (and internationalize) this market.

During this period; the Shanghai gold exchange introduced “gold derivatives”, gold-ETF’s, and “gold lending” (i.e. leasing). These are the same three components of the New York and London markets which have been responsible for most of the corruption and fraud in the international gold trade.

Gold “derivatives” are nothing more than (gigantic) bets placed on predicting the direction of the price of gold, and serve no valid function in this (or any other) market. The same is true with “gold lending”, as there cannot be any possible, legitimate business purpose to such a transaction. As previously explained by many commentators (and also in a preceding commentary); gold leasing is merely a sham transaction.


The purpose of the sham is to pass along (temporary) possession of the gold to a third party, to enable that party to sell gold that it doesn’t own. Through serial gold-leasing, the same ounce of gold can be “leased” and then “sold” to a potentially infinite number of (gullible) buyers.

With respect to the so-called gold-ETF’s; regular readers already know that this is just more, pure banker fraud. As has been proven through trading and record-keeping in (specifically) the New York fraud-market; these “funds” are an integral component in the endemic inventory fraud which has been the only way for Western banksters to delay official defaults in both the gold and silver markets. Indeed, without counting the privately-owned units of these funds as part of its official “gold inventories”; the Comex gold warehouses in New York would currently have an official deficit somewhere in excess of 15 million ounces.

In short; the Shanghai Gold Exchange has been relentlessly corrupted from virtually the day it opened its doors. This should be no surprise to anyone, given that one of the first “seats” on this exchange was given to a member of the Rothschild clan – a name synonymous with financial corruption.

HSBC, Standard Chartered Bank, the Bank of Nova Scotia, and Credit Suisse were also among the early “members” of this exchange. They were followed by Goldman Sachs, JPMorgan, UBS, and Deutsche Bank. All these entities are tentacles of the One Bank; all are names synonymous with fraud and financial crime.

Given this infamous pedigree; the recent re-launching of this Exchange as (for the first time) a fully internationalized market is just another non-event in this sea of corruption. To get the official story on what this “new” market is supposed to represent, we need merely pay a visit to the epicenter of financial propaganda, Bloomberg:

China Opens Gold Market to Foreigners Amid Price Ambition

China will give foreign investors direct access to its gold market for the first time today as the biggest consuming nation seeks to exert more influence over prices while boosting the yuan’s global use…

As with most of what is spewed by the mainstream propaganda machine; the trumpeting of this “new Exchange” by Bloomberg is at best a half-truth. The internationalizing of this Exchange will serve to increase the use of the renminbi as an international currency. However, if the Shanghai Exchange (and China’s government) had any intention of attempting to “exert more influence over prices”, then the absolute last thing it would have done would be to invite the previously listed cabal of financial criminals into this market.

Giving these tentacles of the One Bank not only access to this market, but front-row seats as (privileged) “members” of the Exchange automatically invites in the manipulative trading algorithms of these banksters, specifically their Master Trading Program, by which they control and manipulate all of the world’s markets. This automatically negates any possibility of legitimate pricing in this market.

Why, then, has there been such a gigantic disconnect between the original expectations for this Exchange versus its actual evolution? To fully answer this question requires first briefly laying out some financial context.

It is commonly known, and even commonly reported by the Corporate media that China is seeking to establish itself as the new (economic) “world power”, as economic/financial power relentlessly moves from West to East. It has also formally asserted its intent to have its own currency, the renminbi replace the fraudulent/worthless U.S. dollar as global “reserve currency”.

Furthermore, it has demonstrated some measure of benign intent, at least in comparison to our own, corrupt Puppet Governments. Proof of this comes in a variety of forms. While the standard of living for the inhabitants of the corrupt/decaying Western bloc plummets rapidly; China’s government is engineering an equally rapid rise in the standard of living of its own population.

However, perhaps no single factor symbolizes the difference between the corrupt, malevolent intent of our governments versus the (relatively) benign posture of China’s government than attitudes toward gold.

For an entire generation; our (corrupt) Corporate media has broadcast the message that gold was/is “a barbarous relic”. During most of this time (until they ran out of gold?); Western governments have been dumping “their” gold (i.e. our gold) onto global markets at give-away prices, to deliberately depress the price.

Meanwhile, during more than a decade of rising prices; the Western propaganda machine broadcast an endless array of strong, anti-gold messages aimed at frightening our populations away from gold (and silver) investment. The result of this is that holdings of precious metals by “the Average Investor” in the West are now roughly only about 1% of what would have been considered normal at any other time in history.

Conversely, the government of China has been relentlessly accumulating gold to add to its own reserves. It admits to holding only a little more than 1,000 tonnes at the present time, but several commentators (myself included) suspect that the actual total is much closer to 4,000 tonnes. Simultaneously, it has strongly and publicly encouraged its own citizens to accumulate gold, themselves.

Given this dramatic contrast; the (naïve) assumption of non-mainstream Western observers was that as China extended its “influence” in precious metals markets at the international level that it would do so as (relatively) an honest broker. The naivety here lay in the failure to recognize that the corrupt policies and fraudulent practices of Western governments/bankers already suited China’s own strategy.

That strategy (to simplify what has already been stated) is to obtain as much gold as possible, as cheaply as possible. The corrupt agenda of Western governments/bankers has been not only to depress the price of gold (to utterly absurd levels), but to effectively flush most of the gold (and silver) out of our own economies. Thus this agenda could not have been tailored to suit China any more perfectly than if these Western villains had been its own employees.


In more general terms; readers need to recognize that China is seeking to make this global transfer of economic power/control as orderly as possible. It is now clear to see that (on a tactical level) China sees the best possibility for such an orderly transfer through cooperation with the West’s (corrupt) institutions and (fraudulent) markets.

In the sequel to this piece; readers will receive a much clearer explanation (and example) of how/why China views maintaining the current, corrupt status quo as the lesser-of-evils during this economic transition. This will come through shifting the focus from China’s (already attained?) goal of having the world’s largest gold reserves to its soon-to-be-achieved goal of replacing the dollar as reserve currency with the renminbi.

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