20190621-Trade War-Four legs of Gold Table

SGT Report (interviewed with Jim Willie):

-Trade War – It’s a total deception and dishonesty on US side.  Trump said that China pays the price of the trade war.  It’s actually US people who are paying.  They have to pay more for import goods form China – some people called it a Trump Tax.

-We cut a deal with China to have a complete access to (not to develop) energy supplies in Alaska.

In March 2019 (behind closed door), the two important trade agreements between China and US are:

 Currency - 15%-20% decline in the dollar.   Jim called it a Plaza II Accord.

-Original Plaza Accord:   Between 1980 and 1985 the dollar had appreciated by about 50% against the Japanese yen, Deutsche Mark, French Franc and British pound, the currencies of the next four biggest economies at the time.^[4] This caused considerable difficulties for American industry but at first their lobbying was largely ignored by government. The financial sector was able to profit from the rising dollar, and a depreciation would have run counter to Ronald Reagan's administration's plans for bringing down inflation. A broad alliance of manufacturers, service providers, and farmers responded by running an increasingly high-profile campaign asking for protection against foreign competition.

-Gold – increase gold price 2X or 3X in terms of USD and settle trade imbalance in gold not dollar. 

-So 900 billion US trade deficits translates to 20 thousand tons of gold (900 billion / 1300 ounce of gold) that must be given to China in the frist year.

FYI- a stack of 1 million $1 dollar bill = height of Empire State Building, a billion of them = height of Stratosphere,  a stack of 1 trillion = a quarter way to the moon.

-In April, the trade agreement falls apart because the US demands China to open its financial sectors and the Chinese refused.    So US said we are not going to proceed with the time table that both agreed upon.   As a result, both countries started name calling, military tension in South China Seas, and US staged demonstrators in HK (funded by the Soros Foundation)

-On one side, Trump is for make the US great.  On the other side, he is also part of the Deep state scheme. (19:34)   He is playing a dangerous game of walking on both sides.

-Someone said Trump allowed the Neocon in his cabinet so he can fail and keep an eye on them.

-How do the US government tell their soldiers in Afghanistan to guard the opium fields?   They told them the opium is Afghanistan people’s livelihood and the heroin all goes to Russia, China, Iran.  The soldiers are not stupid but they are scared enough not to believe that.

30:11

Four legs of gold table (4 major movements towards a gold backed financial system)

1. Gold trade notes – these are going to push aside the treasury bills, initially in oil payments.  Jim was told about this in 2013 from one of his sources.    This is now being played out in the Oil Futures market in Shanghai.  

-For Aramco, Saudi’s national oil company, on their balance sheet, there is 1 billion  Chinese RMB that wasn’t there a year ago.   This is more than the Japanese Yen and British Pound combined.   We see evidence of Chinese paying Saudi in RMB for oil sale.   This is probably done with the backing of gold trade notes.   In a standard oil deal, US treasury bill is used as deposit to seal the deal.  But these countries now used the gold trade notes instead of  the treasury bill.

-So gold trade notes will first be used in oil trade then expanding to commodities and other markets.

2. Panda bond – a RMB denominated bond for sovereign or high profiled corporate company purpose.   We now have three Panda bond deals in Austria, Italy and Portugal.   The pros is to track Chinese investment with no currency risks (Euro).

A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China. The first twoPanda bonds were issued in October 2005 on the same day by the International Finance Corporation and the Asian Development Bank.

-Italy had huge bank insolvency problem.   But they came up a complex bank-used currency 

called mini-bot.  That might replace Lira when Italy backs out of EU down the road.

-Anytime you want to come up with a legitimate currency, you have to worry about your government and trade deficits, because that’s how you lose your gold to back up your new currency.

-Italy asked their Central Bank about their gold and was told that they can use it but not own it.

-Jim thinks the gold trade note is the on-ramp via which China gets hold of the remaining gold of the West.

3. BASEL III – The Central Banks had a plan to load up on gold, to discharge treasury bonds, to ride up the gold price in order to get out of their insolvency.   They are in Inning 2 of doing so.

4. Pan-Asian gold backed regional currency for trade settlement.  It’s not going to be used in regular commerce but used only to settle bilateral trade agreements – this was announced last week by the Malysian Prime Minister.  For example, Malaysia – China, Malaysia – Taiwan…..

-Jim said the Fort Knox’s gold is hidden in either Malaysia or Indonesia – he forgot which one.

-Just like treasury note was an important instrument in the Petro-dollar standard system,  the Gold trade note will become the new instrument for the new gold-backed system.

-Q:  So Central banks are hoarding gold and use it to settle among themselves (nation-states).  What does that mean for us common folks?   Does it mean 66% decline in purchasing power for us?

A:   If we have a Plaza II Accord, where the dollar goes down 20%-30%, then the Euro or other major currency will go up 20%-30%。  It will cost the average US consumers more to buy import goods from Europe or China.  So there is need to reindustrialize the US like Trump wants, but it will take 10+ years to do that.

-VW plant huge explosion in Tianjin back in 8/19/16-  it was either caused by 3 possibilities:  direct energy weapon (Rod of God), (52:51) micro-nuclear explosion (US tested that in Ukraine), or an arson by some terrorist group on a nearby warehouse that housed 7000 tons of fertilizer.

-Q:  How would Jim advise the SGT Report listeners to hedge their bet?

A:  Crypto currencies if they can stomach the wild ride.   Or sell stocks and bonds to buy gold and silver.  But he thinks the bond market will go up until the reset hit.  So one can sell stocks and go into bond and then sell bond to gold n silver.