The dominoes are going to start falling hard and fast and there is simply no way for the Fed, IMF or the ECB to paper over it this time! And at the risk of being redundant, yes, US and foreign banks, bond, mutual, retirement and hedge funds are heavily invested in those countries as well. When the default train plunges off the monetary cliff, everything goes up in smoke for good.

While the game of monetary musical chairs plays out in the west, China has been quietly positioning themselves to unceremoniously dethrone the US dollar and make the yuan the new reserve currency for world trade. For well over a decade, China has been the number one importer of gold and silver in the world, while exporting none of the metals mined inside their borders. This has been done because they have known for years that the US dollar’s days are numbered and in its death spiral.

Chinese Gold Price Fix by End of 2015. 

China is well aware that “he who owns the gold makes the rules,” so they are making sure they make the rules by now having the largest hoard of gold safely tucked away in their central bank vaults of any country in the world, including the US. In fact, they are planning to start their own gold fix trading platform by the end of this year, which will most likely replace the London fix, which has come under intense scrutiny for price manipulation and allegations that it has no actual metal backing trades made through it. China has been very clear that their fix will be backed 100% by actual physical metals, a claim the London fix cannot make.


To further distance themselves from the US dollar, China’s Asian Infrastructure Investment Bank (AIIB) has been met with overwhelming global enthusiasm as 57 nations have signed on to become founding members. This initiative will do trade in currencies other than the dollar or euro, with much of it in China’s renminbi. Not coincidentally, the US warned all of its trade partners not to join the AIIB as it would clearly erode US dominance and give China too much power. Not a single nation listened, but all joined anyway. When this occurs, expect to see the prices of both metals soar. JPMorgan, Citi, HSBC et al, who have been agents for the western central banks to suppress prices with unbacked paper short contracts, will no longer be able to as the fix moves to China’s transparent physical trading platform. This will create true price discovery based on free market supply and demand. Know that supply is extremely limited, especially in physical silver, while demand is going to be tremendous.

You cannot get a clearer signal that the world no longer fears the US (other than Japan and Canada) and is jumping off the dollar ship before it sinks! To prove the soundness of their banking system, China is further preparing to announce their official gold holdings in the coming months, a figure that is estimated by gold experts to be between 5,000 – 20,000 or more metric tons, dwarfing the officially reported amounts the US claims to hold, but have refused to have audited for over forty years.

In closing, it’s important to remember that gold and silver have been trusted as money for over 5,000 years, while every would-be empire that attempted to replace the metals with fiat paper debt notes eventually fell to ruin because of it. Today’s situation is no different than that which befell The Great Roman Empire that was thought to be ‘too big to fail’ in its day. Indeed, though the days may change, ‘the song remains the same.’ This anticipated announcement may signal the end of the dollar’s reign of fiat dominance and crown China as the new undisputed reserve currency king. Either way, the writing is already on the wall. Those individuals who can read it and take decisive action will transition into the new gold and silver-backed monetary paradigm with great success, while the boiling frogs, distracted by the innane media propaganda of the moment, will be left with piles of worthless paper, wondering what went wrong?

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