A Storm of Global Events Is Threatening to Push Gold and Silver to Record Highs
By Joshua Krause
Earlier this week, Mac Slavo reported on an interview conducted with the CEO of Future Majestic Silver Corp, Kieth Neumeyer. In it, Mr. Neumeyer proposed a brilliant way to put an end to the blatant manipulation of the gold and silver market. If all of the mining companies in the world agreed to halt production for a single 30 day period, it would “send ripples throughout the entire system”.
It would show the phony paper market who’s really in charge. With the price of 800 million ounces of physical silver being controlled by 1 billion ounces of paper stocks, a challenge like this could make stock prices tumble while the price of real silver goes through the roof. He suggested that they agree upon a month sometime in 2015. I’d be willing to bet that the anticipation of that event, would make silver prices go ballistic long before that month arrives.
Of course, even if Mr. Neumeyer doesn’t have his way, there’s a long list of events on the horizon that could push gold and silver back into the spotlight. There’s so many factors that are converging at once, that if only a few them come to fruition, we can expect gold and silver to be making some serious gains by the end of this year.
Another challenge to metals market may be coming down the pike by the end of this month. In Switzerland, a referendum is being planned for November 30th, that could bring about the first gold backed currency in decades. Currently, polls show that support for the bill has a very narrow lead, so we’ll see what happens in the next few weeks. If it passes, Switzerland will hold 20 percent of it’s reserves in gold, demand the return of all its gold being held overseas, and will cease selling gold to the rest of the world.
If that doesn’t come to pass though, an even bigger event is brewing in China, and it threatens to destroy London’s monopoly on gold and silver pricing once and for all. For nearly 300 years, the London Fix has determined the global price of gold. Now China has opened a free trade zone in Shanghai, and an international gold exchange along with it. Essentially, there will now be two prices for gold. If China doesn’t agree with London’s price, they can set theirs higher or lower. I’m betting they’ll set the price higher, because China has a much greater interest in Gold that most Western nations.
Which brings me to the next major factor that will effect the price of gold. Countries like China and India continue to outmatch the demand of every other country on Earth. Asia is responsible for the majority of the global precious metals market, and that demand isn’t just coming from the government. Private citizens are getting in on that action as well, especially in India where gold has been a traditional store of wealth for centuries.
That doesn’t mean governments aren’t still hoarding massive amounts of gold. With sanctions putting pressure on Russia, Putin’s government has been doing everything it can to separate itself from the dollar. That includes increasing its gold reserves by 54 tons over a six month period. The new purchases have made Russia the sixth largest country in in gold reserves. They now have a total of 1094.7 tons of gold, which is more than China. While every national currency is racing towards the bottom to keep their wealth from being traded overseas, it seems like every government, (except for the U.S. and Britain) is trying to buy up as much gold as they can. You can imagine what this will do to gold prices in the near future.