Latest / Kinesis Money / China Pulls Gold Revaluation Trigger - LFTV Ep 279

Transcript

China Pulls Gold Revaluation Trigger - LFTV Ep 279 · Kinesis Money

• 0:00
  SPEAKER_00: Gold and silver are deeply underpriced, and dips will be poured.
• 0:21
  SPEAKER_01: Welcome to Life from the Vault, brought to you by Kinesis Money, and we're certainly glad you've joined us here today.
• 0:27
  SPEAKER_01: And Life from the Vault, as you know, is the show that goes beyond the headlines to uncover the truth about the precious metals industry.
• 0:33
  SPEAKER_01: And joining us today is Kinesis's very own world-renowned whistleblower and precious metals industry expert, Andrew McGuire.
• 0:42
  SPEAKER_01: And this week, again, we'll be answering more questions from the Life in the Vault community.
• 0:47
  SPEAKER_01: So keep those questions coming in.
• 0:49
  SPEAKER_01: Just click the link below and uh right there in the description.
• 0:52
  SPEAKER_01: You can see it there.
• 0:53
  SPEAKER_01: And you never know.
• 0:54
  SPEAKER_01: You know, your question just may well be answered or may even be chosen for Andrew to answer right here on Life in the Vault.
• 1:01
  SPEAKER_01: So let's head over to the UK and talking gold with Andrew McGuire.
• 1:08
  SPEAKER_01: All right, Andrew.
• 1:09
  SPEAKER_01: Having identified uh, I guess what was the Fed that was driving the leverage downside action here in the markets and um you know through massive 100 to 1 leverage selling, you know, having uh trickled out lungs and and and sucked in speculator shorts, you know, uh you have an update.
• 1:29
  SPEAKER_01: I know you have an update right now.
• 1:31
  SPEAKER_01: And um uh and and and what basically is you're saying is that if they don't race to short cover before, and there's a specific date here, July 24th, you know, this overshoot is about to blow back on them.
• 1:45
  SPEAKER_01: And I guess what we want to know here is can you just walk us through uh what you and your first tier physical market liquidity providers are positioning for into the second half of 2026?
• 1:57
  SPEAKER_00: Yes, thanks, Shane.
• 1:58
  SPEAKER_00: Uh, nice to be everyone.
• 2:00
  SPEAKER_00: Thanks for all the questions.
• 2:01
  SPEAKER_00: Um, obviously, we're focusing on on the elephant in the room right now, which is the action, um, which most people are finding difficult to actually uh conceive, especially as the mainstream narrative has been um so constructed.
• 2:18
  SPEAKER_00: And it's actually uh not it's constructed by the mainstream, but simply constructed by um what has been the very the very clear seller that's been behind this this whole time.
• 2:32
  SPEAKER_00: But Shane, if I wanted to put a title on this episode, it would have to be central bank gold wars spill into the daylight.
• 2:41
  SPEAKER_00: That's what's happening.
• 2:43
  SPEAKER_00: Let's step through the footprints because it's actually if you care to look, it's there, it's evident.
• 2:49
  SPEAKER_00: The reason that we've been documenting what, a race by global central banks to re repatriate um um their offshore uh gold assets um uh and mostly held in the US and London, is that they recognize that a global gold price revaluation is actually inevitable.
• 3:12
  SPEAKER_00: And they want to bring these high-quality liquid assets back on shore as soon as possible.
• 3:17
  SPEAKER_00: Now, concerns over vault integrity, if you remember, were heightened following the Fed's inability to repatriate uh Deutsche Bank, uh, Bundesbank gold in, remember in 2013, we've been through the more granular detail on that.
• 3:32
  SPEAKER_00: But foreign central banks following that, they no longer trust uh that the interconnected US and London vaulting hubs are free from re-hypothecation, particularly given the double counting loophole that allows leased gold to remain on a central bank's balance sheet.
• 3:54
  SPEAKER_00: Now, these concerns were compounded by the Fed's refusal to allow Deutsche Bundebank to even inspect their US stored assets held in the Treasury Voss.
• 4:04
  SPEAKER_00: But I mean, and these given that they've not been subject to independent third-party audits since Nixon took gold off the dollar peg in 1971, then clearly that is a problem.
• 4:17
  SPEAKER_00: Now, this Financial Times piece highlights global central banks no longer trust storing their physical gold in New York or London.
• 4:26
  SPEAKER_00: Remember, this was a conspiracy theory.
• 4:28
  SPEAKER_00: We're all making this up.
• 4:29
  SPEAKER_00: There you go.
• 4:30
  SPEAKER_00: I mean, okay, Financial Times used to not be a friend of gold, and they're not a friend of gold, but they are reporting what is in your face, basically.
• 4:40
  SPEAKER_00: And so following the last three months of geopolitical uncertainty, central banks are stepping up efforts to repatriate their sovereign assets.
• 4:50
  SPEAKER_00: And with gold having overtaken US Treasuries as the top reserve asset, as trust in dollar-based systems weaken, the shift proves gold is being treated as a strategic sovereign asset, not just a reserve holding.
• 5:07
  SPEAKER_00: Now, as we drew attention to last time, central banks have stepped up moving gold out of London and New York to reduce geopolitical and access risks.
• 5:17
  SPEAKER_00: So there's a whole bunch of stuff going on here.
• 5:19
  SPEAKER_00: They want their gold accessible to themselves, and especially, as we've seen, the need for first-year gold, the only hedge against uh for a central bank to in some cases be instantly liquidated for the need to create dollars.
• 5:35
  SPEAKER_00: So, in other words, the perfect hedge, that the hedge that it gold was already or always designed to be.
• 5:42
  SPEAKER_00: So at least, and and that's even though that's over at this point, um the if they want to have that accessible to themselves naturally, and if you don't trust that it's somewhere that it is in place, then you seriously need to bring it home.
• 6:00
  SPEAKER_00: So as we looked at last time, India and France are amongst the biggest recent repatriators with France 100% storing all its gold domestically.
• 6:11
  SPEAKER_00: Now, we get a lot of questions around re-hypothecation, so that's actually put them to rest.
• 6:19
  SPEAKER_00: In broad terms, hypothecation is simply the act of a borrower pledging gold bullion as collateral to secure a loan.
• 6:29
  SPEAKER_00: But they retain ownership of that gold.
• 6:33
  SPEAKER_00: So that's straightforward.
• 6:35
  SPEAKER_00: However, rehypothecation occurs when a lender takes that pledged gold collateral and they use that same asset to secure its own loans or obligations.
• 6:47
  SPEAKER_00: And at that point, two or more parties hold claims on the same gold bar.
• 6:52
  SPEAKER_00: So read the Fed rehypothecating US Treasury physical gold is what we've been looking at as this as uh over the last 60 years, basically.
• 7:03
  SPEAKER_00: And then that is precisely the issue at hand now.
• 7:08
  SPEAKER_00: As a paper-to-paper rehypothecation analog, it's not too dissimilar from the Lehman brothers' bankruptcy, where if you remember 22 billion or it was about 55% of the 40 billion in client assets was completely subject to competing ownership claims.
• 7:29
  SPEAKER_00: However, while that episode resulted in Lehman's bankruptcy, which was ultimately settled with freshly printed cash bailout, to staunch what was really a wider rehypothecation that could have taken down all the two big to fail taxpayer-funded banks and the insurance companies that were that were insuring those positions.
• 7:52
  SPEAKER_00: That then uh led uh to the really the 2008 banking crisis.
• 7:57
  SPEAKER_00: Bearing in mind that Lehman had re-hypothecated it, and other people, other banks had also re-hypothecated.
• 8:04
  SPEAKER_00: So they were the fall guy, and it was leveled for cash as a bailout.
• 8:10
  SPEAKER_00: However, resolving gold rehypothecations requires the physical metal itself to be made whole.
• 8:19
  SPEAKER_00: It can't be printed away.
• 8:21
  SPEAKER_00: The gold must either be bought back at a market price, which would clearly tighten supply at the same time and risk spiking the price higher, or defaulted on, which is pretty much unthinkable in a global marketplace, or revalued.
• 8:40
  SPEAKER_00: And with the Fed's gold liability settled accordingly.
• 8:43
  SPEAKER_00: So what what do you think they're gonna do here?
• 8:46
  SPEAKER_00: It's gonna be revalued.
• 8:48
  SPEAKER_00: Thin doubt paper market liquidity evidences the Fed's 60-year gold short is running out of road.
• 8:56
  SPEAKER_00: You may not think it when you look at the action, but if you step back, that is exactly what's happening here.
• 9:03
  SPEAKER_00: Now we've previously examined Fresh, the Fed US Treasury rehypothecations in much more granular detail.
• 9:11
  SPEAKER_00: And the empirical trail points to an unknown portion of the$8,100 tons of US Treasury gold being um either absent or rehypothecated.
• 9:22
  SPEAKER_00: I mean, no one knows exactly the extent of it.
• 9:26
  SPEAKER_00: But this leaves the Fed confronting the consequences of a deeply underwater multi-decade bet against gold, one that must now be marked to market as repatriation pressures are intensifying.
• 9:42
  SPEAKER_00: This is all the pieces of the puzzle are there to see.
• 9:46
  SPEAKER_00: There's just not enough immediately deliverable of above-ground bullion for the Fed to simply buy its way out at scale at any price.
• 9:56
  SPEAKER_00: Now, this leaves one viable exit: a paper gold revaluation from$42.22 to the market price.
• 10:05
  SPEAKER_00: We kind of discussed what that might be last time.
• 10:08
  SPEAKER_00: Now we'll look at this on the chart shortly, but the end of June of the June Bank of International Settlements gold squaring effort, this is where uh the the Fed borrows gold from the Bank of International Settlements and then has to repay it.
• 10:25
  SPEAKER_00: This was marked to market yesterday.
• 10:30
  SPEAKER_00: Now it looked like the Fed's final attempt to cover as much short exposure as possible before an impossible to escape revaluation event.
• 10:41
  SPEAKER_00: But in driving the synthetic overshoot below physical support levels, the Fed stepped on some very, very large toes.
• 10:52
  SPEAKER_00: Now let's think about it.
• 10:53
  SPEAKER_00: China has spent decades encouraging citizens to buy physical gold with assurances and a clear expectation that those physical gold investments would appreciate.
• 11:05
  SPEAKER_00: And we even they were even bringing in um first of all, it started in 2010 with the big bars, then it then it was uh spread out to others, and then finally into tiny gold accounts for it all citizens.
• 11:19
  SPEAKER_00: At each time, China said, the Chinese central bank said, don't worry, they'll appreciate simply over time.
• 11:28
  SPEAKER_00: Now, this Fed-centric 100 to 1 leverage sell-off backwashed into Shanghai, undermining the PBO citizens' gold price uh appreciation assurances.
• 11:40
  SPEAKER_00: And that prompted the PBOC to step in aggressively to insulate Chinese citizens from this Fed-driven action because it backwashes in.
• 11:51
  SPEAKER_00: And after the 100% COMEX-driven dip through, strong central bank support that we know of at 4,000 bucks, the paper-to-physical disconnect has hit the breaking point where 100 to 1 leveraged gold gets called in.
• 12:09
  SPEAKER_00: PBRC licensed Shanghai gold exchanges were forced to protect Chinese physical uh investors from this COMEX-driven mispricing, wrong footing Chinese speculators, and the response was absolutely immediate.
• 12:25
  SPEAKER_00: Broker bank margins were raised to as much as 140% over your pledged physical bar.
• 12:32
  SPEAKER_00: In other words, if you've got a physical bar, you'd need 140% margin, even though it's there and backed, just to even trade it.
• 12:40
  SPEAKER_00: That's how ridiculous this whole situation had become.
• 12:45
  SPEAKER_00: Individual trading was immediately and essentially effectively targeted for suspension, cutting off the Fed's ability to backwash into these uh global markets.
• 12:59
  SPEAKER_00: Now, we've also got, we also noted that the free trade zone facing ICBC and China Construction Bank, other and other major banks issued one-month notice for speculators to close their accounts by the 24th of July, which is why Shanghai Spot began trading at a small discount to London spot during the main sessions.
• 13:22
  SPEAKER_00: Now we've been evidencing up to$50,$75,8 uh premiums uh prior to this um this cutoff.
• 13:33
  SPEAKER_00: But as we will see shortly, central bank buying has driven a premium at the AMNPM fixes.
• 13:41
  SPEAKER_00: So even though we've seen a discount during the main sessions, so after the 24th of July, Shanghai physical premiums will resume.
• 13:50
  SPEAKER_00: Placing leveraged Comac sellers like the Fed, which is still the only short gold central bank, placing them in the crosshairs for a short squeeze event as dramatic as the 40% end-of-year short squeeze rally that followed their Shanghai Futures Exchange launch in March 2024 into the end of 2024.
• 14:14
  SPEAKER_00: However, at the same time as reining in speculators, Beijing stayed true to its citizen gold buying mandate and cutting Chinese bank transaction costs on physical gold accumulation accounts to just 0.2% to encourage citizens to buy.
• 14:35
  SPEAKER_00: Now the timing really matters here.
• 14:37
  SPEAKER_00: The 24th of July closure date lines up with the SGE connected Hong Kong gold clearing system launch.
• 14:45
  SPEAKER_00: That's not a coincidence.
• 14:47
  SPEAKER_00: We also suspect the White House is watching this date very, very closely.
• 14:52
  SPEAKER_00: China now has the infrastructure required to challenge the entire Comix LBMA price setting regime and effectively green light a global central bank revaluation event.
• 15:05
  SPEAKER_00: This is a date to watch, and really, it's really going to force the Fed's hand.
• 15:13
  SPEAKER_00: Let's take a look at the charts, because that's probably the best way to uh illustrate this.
• 15:19
  SPEAKER_00: Now, as Chinese specs were being shut down into a sell-only condition, we saw Shanghai Spot trading at a discount to London Spot, which is most unusual.
• 15:31
  SPEAKER_00: However, PBOC footprints were uncovered at all of the fixes.
• 15:35
  SPEAKER_00: The reason I've I'm recording this at this moment, we're just fixing here in London at three o'clock.
• 15:43
  SPEAKER_00: And what do we see?
• 15:44
  SPEAKER_00: At the moment of the fix, we see discounts.
• 15:48
  SPEAKER_00: We saw premiums coming in at about 28 to 30 bucks ahead of the fix.
• 15:54
  SPEAKER_00: We're seeing the fix coming in at a big premium.
• 16:01
  SPEAKER_00: It's varying, but it's a big premium.
• 16:03
  SPEAKER_00: I'm just watching live at the at the moment, so try and record this.
• 16:08
  SPEAKER_00: And there you go, with fix now.
• 16:11
  SPEAKER_00: And what happens?
• 16:13
  SPEAKER_00: Shanghai goes immediately back into a discount.
• 16:17
  SPEAKER_00: So what we're seeing, I'm glad to catch this to illustrate it.
• 16:21
  SPEAKER_00: So really, this explains the large PBOC-driven premiums over London spot that at the exact fixes we saw it at the AM fix, and we're now seeing it at the PM fix.
• 16:32
  SPEAKER_00: And I'm just going to mark that now, and that's just fixed.
• 16:36
  SPEAKER_00: So it just goes to show there's a now there's a small premium again, but I think for the most part, the specs, Chinese specs have already been forced to bail.
• 16:47
  SPEAKER_00: They're in a sell-only condition.
• 16:49
  SPEAKER_00: Um, so that's why we're seeing these fixes.
• 16:53
  SPEAKER_00: So again, just like we've seen every time, the Shanghai spot discounts resume directly and back into the main sessions.
• 17:03
  SPEAKER_00: Unusually we saw the premium coming in ahead of that.
• 17:09
  SPEAKER_00: So, in other words, what we're evidencing here, these are clear footprints.
• 17:14
  SPEAKER_00: The PBOC remains the only Chinese gold buyer, not the speculators.
• 17:20
  SPEAKER_00: And what's happening is like clockwork, they're locking in three to five tons of gold every single day without exception.
• 17:30
  SPEAKER_00: And we drew it uh attention to this exit of London 400-ounce bars in our last episode.
• 17:37
  SPEAKER_00: So this is where the unallocated 100 to 1 leverage LBMA CME paper market hits the physical wall, culminating into a bullish NADIEA inflection point.
• 17:51
  SPEAKER_00: So this was the apex inflection point, this is the Nadir inflection point.
• 17:58
  SPEAKER_00: This driven by speculative longs, this driven by speculative shorts.
• 18:05
  SPEAKER_00: What we're seeing is the PBOC is cleaning house ahead of next month's institutional-facing Hong Kong SGE physical gold gateway.
• 18:16
  SPEAKER_00: Beijing has cleared speculative open interest ahead, opening a series of globally accessible SGE physical gold corridors, which reach into Africa, Singapore, Africa, and South America primarily.
• 18:33
  SPEAKER_00: The bottom line is the only central bank still short gold has doubled down because it's in serious trouble.
• 18:42
  SPEAKER_00: What were they doing?
• 18:44
  SPEAKER_00: They literally walked, bearing in mind that they are short, they've borrowed gold from the uh BIS.
• 18:51
  SPEAKER_00: Uh, so they have literally brought gold back down to the end of October settlement.
• 19:00
  SPEAKER_00: Uh, but this has come at a price.
• 19:03
  SPEAKER_00: I mean, while this last kick at the Fed gold price suppression can may have helped it repay, it's BIS borrowed gold.
• 19:11
  SPEAKER_00: And we saw that being marked to market yesterday again, looking at very almost an identical level to the end of October.
• 19:21
  SPEAKER_00: So remember, they were settling at higher and higher and higher prices.
• 19:27
  SPEAKER_00: So what they've done is in the move ahead of uh literally ahead of the goal revaluation event, they are literally have used everything in, they've thrown the kitchen sink at gold to try and get it below.
• 19:42
  SPEAKER_00: This is going to cause them a problem.
• 19:44
  SPEAKER_00: And this was marked to market yesterday.
• 19:47
  SPEAKER_00: While they've succeeded, the damage is done.
• 19:50
  SPEAKER_00: The paper to physical disruption has exposed the Fed as the only possible instigator and has put the Comex directly in the PBOC's crosshairs.
• 20:00
  SPEAKER_00: We're now watching the end game of the Fed's 60-year synthetic gold price suppression mandate and the trigger point a gold revaluation.
• 20:10
  SPEAKER_00: This is the opportunity.
• 20:12
  SPEAKER_00: The approaching paper-to-physical breakpoint represents a once-in-a-lifetime setup.
• 20:19
  SPEAKER_00: Liquidity providers assess a minimum 40% physically driven rally into year-end.
• 20:26
  SPEAKER_00: At 100-to-1's leverage, the Fed has thrown the kitchen sink at gold and through leverage, deliberately constructed the so-called, and look at this.
• 20:36
  SPEAKER_00: If you look at this cross here, this is the cross of the 50-day moving average moving through the 200-day moving average.
• 20:45
  SPEAKER_00: Through leverage, they've deliberately constructed this so-called death cross to suck in the next round of naked short supply.
• 20:54
  SPEAKER_00: However, into similar constructed bearish cell signals, which would normally offer bears a tailwind of plus or minus 3% downside, every single centrum bank reads this as a buy event.
• 21:08
  SPEAKER_00: Now let's have a look.
• 21:10
  SPEAKER_00: The last time this happened was on the 27th of September, 2023, to the 6th of October, this move, where gold fell 3.4% from$1,900 to 1835.
• 21:26
  SPEAKER_00: That was followed by a golden cross on the 1st of December, which is marked here, and that 1st of December 2023, triggering a 5.4% rally from 2035 that topped out literally one session later at 2144.
• 21:50
  SPEAKER_00: Then that was followed by an 8% retracement sell off that bounced exactly on the 50 day moving average.
• 22:00
  SPEAKER_00: This is how technical it was.
• 22:02
  SPEAKER_00: However, what we're trying to illustrate here is this death cross is really, while it may have worked in the past, it has been anticipated.
• 22:13
  SPEAKER_00: Every other central bank, including the PPOC, is leaning into buying against it.
• 22:20
  SPEAKER_00: I think the quick key point we're trying to point out here is the entire synthetic three-month wash and rinse cycle, what it did was set up the physically driven higher stair step 184% rally into from the PBOC's March 2024 Shanghai Futures Exchange launch.
• 22:44
  SPEAKER_00: So let's look at the PBOC's footprints again.
• 22:48
  SPEAKER_00: After the Fed constructed three-month 30% 5600 to the bottom of the 3959 spot gold washer-in cycle, we've reached another unfactored PBOC physical initiative, not seen since the Shanghai Futures Exchange launch.
• 23:07
  SPEAKER_00: This is 100 a 100% physically driven upcoming rally.
• 23:13
  SPEAKER_00: That was a rally then, and it is again now.
• 23:17
  SPEAKER_00: Once again, it's set to blow shorts out of the water into a wrong-footed, shrinking pool of bearish open interest.
• 23:27
  SPEAKER_00: We'll look at a couple more links in a second, and then we'll look at the shorter-term action.
• 23:32
  SPEAKER_00: So into last week's capitulative sell-off, calls around the physical desk continue to confirm the largest PBOC facilitator transfer of Western gold into Beijing since the March 2024 Shanghai Futures Exchange launch.
• 23:50
  SPEAKER_00: Now, official May import data shows 163 tons of gold, but liquidity providers assess that June imports to be reported in the second week of July, which is now, will exceed them by more than 110 tons.
• 24:07
  SPEAKER_00: Could be more, but at least 110 tons over the 163 tons officially reported.
• 24:14
  SPEAKER_00: That would mark, it would send a message, and it would mark the largest monthly official imports ever recorded.
• 24:22
  SPEAKER_00: The message is clear.
• 24:24
  SPEAKER_00: Fed officials have reached the limit of how far they can push the short envelopes.
• 24:29
  SPEAKER_00: Beneath the smoke and mirrors chart, painted action, massive central bank demand is underway.
• 24:38
  SPEAKER_00: It can't be hidden.
• 24:39
  SPEAKER_00: Now, this unfactored physical bid drove a series of higher SGE support steps that broke the Comex cap and wrong-footed officials leaning mechanically into dollar strength.
• 24:54
  SPEAKER_00: For the first two months after the Shanghai Futures Exchange launch, the dollar actually also rallied from 102.30 to 106.21.
• 25:03
  SPEAKER_00: So they rose in tandem.
• 25:05
  SPEAKER_00: It broke that correlation.
• 25:07
  SPEAKER_00: And obviously, at that same time, the mechanical sellers were using dollar strength to sell gold.
• 25:15
  SPEAKER_00: That blew back.
• 25:16
  SPEAKER_00: This is the point where we are reaching now.
• 25:19
  SPEAKER_00: And physical buyers at that time used that dollar strength to tighten supply.
• 25:26
  SPEAKER_00: In other words, give me more gold for my dollars.
• 25:30
  SPEAKER_00: And that powered that 40%$800 rally into year-end with no pullbacks until the very end of the year.
• 25:40
  SPEAKER_00: And that was still an$800 rally.
• 25:43
  SPEAKER_00: And that's why liquidity providers had assessed current central bank demand, draining the CME LBMA supply setting up a large short covering rally into the end of this year.
• 25:56
  SPEAKER_00: This is a tectonic event similar in size to what happened after the Shanghai Futures Exchange.
• 26:05
  SPEAKER_00: Wrong footed so many synthetic players.
• 26:09
  SPEAKER_01: All right, Andrew.
• 26:20
  SPEAKER_01: Right.
• 26:20
  SPEAKER_00: Well, we're recording this on Wednesday.
• 26:23
  SPEAKER_00: You'll be viewing this on Thursday.
• 26:26
  SPEAKER_00: I mean, I'll be trying to do it as late as possible so there's not too much of a gap.
• 26:31
  SPEAKER_00: But into the end of this shortened holiday week, we've got non-farm payrolls.
• 26:36
  SPEAKER_00: And that there's absolutely little doubt that the Fed insiders already have been privy to enough of that data to position themselves for a beat or a miss.
• 26:47
  SPEAKER_00: Now it's no joke that these feds officials are not prohibited from trading themselves.
• 26:54
  SPEAKER_00: We've seen instances of them getting caught.
• 26:57
  SPEAKER_00: It's mind-boggling, really, when you think about it.
• 27:00
  SPEAKER_00: Now, we're recording, as I say, we're recording this on Wednesday.
• 27:03
  SPEAKER_00: You're going to know what the print was as this episode is released today.
• 27:08
  SPEAKER_00: Now, this may offer one last kick at the can, but every liquidity provider has indicated they already have buy orders under the market in case of any dips.
• 27:19
  SPEAKER_00: So, regardless of the print, from a supply-demand perspective, gold and silver are deeply underpriced, and dips will be bought.
• 27:29
  SPEAKER_00: So while technical traders are emboldened by the death cross, there are very few naked longs left to rinse.
• 27:39
  SPEAKER_00: And these psyched-out dip buyers are absent to rinse.
• 27:43
  SPEAKER_00: So to gain any traction here, it's going to require fresh naked short supply, leveraged supply, which is going to be extremely vulnerable into these oversold conditions.
• 27:54
  SPEAKER_00: And with the PBOC pushing back.
• 27:58
  SPEAKER_00: However, the PBOC, through the build-out of its global gold pricing and storage corridor, has, through the upcoming launch of the Hong Kong Gateway, already signaled is moving to become the global price setter.
• 28:11
  SPEAKER_00: So it doesn't leave the COMEX and the LBMA in a position of strength.
• 28:16
  SPEAKER_00: This initiative also includes the largest LBMA global trading banks who, by no coincidence, their long gold and silver for their own books joining this exchange.
• 28:28
  SPEAKER_00: They were caught napping at the launch of the March 2020 for Shanghai Future Exchange launch.
• 28:34
  SPEAKER_00: Now they are ready.
• 28:36
  SPEAKER_00: Every single market-making bullion bank wants to be on the right side of a pre-revaluation gold event and realize the PBOC has set the stage for a global gold price revaluation.
• 28:51
  SPEAKER_00: Physical market participants know the Fed just stepped on the PBOC's toes.
• 29:25
  SPEAKER_00: So at the end of this 30% rig sell-off, the Fed and the LBMA market makers have really glimpsed now the PBOC's winning poker hand.
• 29:36
  SPEAKER_00: The message is blunt.
• 29:39
  SPEAKER_00: Beijing is clearing the deck to take control of global physical gold price setting mechanism.
• 29:46
  SPEAKER_00: The first move comes when China's in when the first move came really, when China instructed their broker banks to raise margins, uh, then to flush out with a distinct target of flushing out all this speculative open interest, um, ahead of a new series of Western-facing SGE gold pricing and storage hubs being instigated through the Hong Kong Gateway.
• 30:13
  SPEAKER_00: Now, we flagged this two weeks ago after Bloomberg highlighted the Shanghai Gold Exchange 100% physically product Hong Kong and Singapore gold hub, which is a direct challenge to the LBMA's grip on global bullion trading and price discovery.
• 30:28
  SPEAKER_00: Bloomberg reinforced the point again this Monday, aligning with our liquidity reports of large-scale 400-ounce bars exports leaving uh London.
• 30:39
  SPEAKER_00: And we've tracked this consistently.
• 30:42
  SPEAKER_00: It's three to five tons a day leaving.
• 30:46
  SPEAKER_00: These flows are expected to have reached roughly 2,000 tons.
• 30:51
  SPEAKER_00: It's just people aren't putting the just aren't connecting the dots.
• 30:56
  SPEAKER_00: While the LBMA is paper diluted, the fixes are T plus one deliverable.
• 31:03
  SPEAKER_00: That's why sometimes we're seeing a premium come in at the fix, even though they're closing the the speculators are forcing a discount thereafter.
• 31:14
  SPEAKER_00: These flows are expected to have reached, as I say, it 2,000 tons is the is being conservative.
• 31:22
  SPEAKER_00: And what it's doing is draining the fractionally held bullion stock that has been long supplied liquidity to the CME bullion bank market makers.
• 31:32
  SPEAKER_00: This is the point many are missing.
• 31:34
  SPEAKER_00: Some of the LBMA market makers, including JP Morgan, helped run the tail end of the Fed's now underwater 60-year gold price suppression mandate.
• 31:44
  SPEAKER_00: Yet, on their own books, these same bullion banks are long gold and silver.
• 31:48
  SPEAKER_00: They're positioning for a forced U.S.
• 31:50
  SPEAKER_00: Treasury gold price reevaluation and preparing to supply physical liquidity into the expanding SGE gold corridor.
• 31:59
  SPEAKER_00: ZeroHedge also highlighted the surge in Chinese gold imports as Beijing prepares the next leg of planned SGE corridor expansions into Singapore, Africa, and South America.
• 32:13
  SPEAKER_00: This is on the back of a large global dedollarization mandate.
• 32:18
  SPEAKER_00: This is Reuters, I think today, it's just illustrating more central banks are set to shrink dollar holdings.
• 32:26
  SPEAKER_00: Also noting gold is held by 82% of central banks, and it has moved, and gold has moved to the center of reserve management strategies.
• 32:37
  SPEAKER_00: The endgame is clear.
• 32:39
  SPEAKER_00: A gold bank, RMB, is a direct challenge to dollar reserve dominance.
• 32:45
  SPEAKER_00: It gives reserve managers a hard asset benchmark against debt-backed dollars, and it creates a credible alternative settlement reference point.
• 32:56
  SPEAKER_00: Don't forget, the RMB, the UN, is exchangeable one-to-one with gold.
• 33:01
  SPEAKER_00: The RMB currently carries some obvious other constraints, though, includes capital controls.
• 33:08
  SPEAKER_00: So people just poop away and say, well, it's just not going to work.
• 33:12
  SPEAKER_00: But Beijing, they forget the Beijing spent years building the workaround of at least 40,000 tons, if not 45,000 tons of gold that can bridge mainland physical gold with internationalized, collateralizable, high-quality liquid asset gold.
• 33:32
  SPEAKER_00: And that's why this beta tested, the beta-tested MBRG platform matters.
• 33:40
  SPEAKER_00: Do you remember we did a lot of work on MBRG some years ago?
• 33:44
  SPEAKER_00: And China is pushing it towards commercial rollout as a central bank digital currency rail, which is designed really to make cross-border payments faster, cheaper, and less dependent on dollar settlement.
• 33:56
  SPEAKER_00: Now, if you recall, Mbridge began as a Hong Kong bank and Thailand initiative.
• 34:05
  SPEAKER_00: It was a combined initiative.
• 34:06
  SPEAKER_00: It became Mbridge in 2021.
• 34:09
  SPEAKER_00: We did work on this when the Bank of International Settlements had a finger in the pie and the central banks of Dubai, China, and the UAE joined in the Embridge platform.
• 34:23
  SPEAKER_00: But under Fed pressure, the Bank of International Settlements had to step back in 2024.
• 34:30
  SPEAKER_00: And this is just about the time that the Shanghai Futures Exchange launched.
• 34:36
  SPEAKER_00: And what they did was hand the project, um, the Bank of International Settlements handed the project to the partner central banks that we just mentioned.
• 34:46
  SPEAKER_00: Now the platform lets central banks transact directly in their own digital currencies.
• 34:52
  SPEAKER_00: This is key.
• 34:53
  SPEAKER_00: Cutting foreign exchange settlement times, ready to set to seconds, and reducing the need for the dollar as an intermediary currency.
• 35:02
  SPEAKER_00: So bottom line, Mbridge is not just payments plumbing, it's strategic monetary infrastructure is built to accelerate the digital RMB adoption.
• 35:16
  SPEAKER_00: It's going to create lower cross-border payment uh costs, it's going to support China aligned trade, and it's going to push the global payments system further into a multipolar architecture, which is exactly many, many times we've talked at London Poor, very guests, and many of our guests we've been discussed discussing this with over the years.
• 35:42
  SPEAKER_00: So inside the 100% physically backed SGE gold corridor, this rail can steadily reduce reliance on dollar-based gold settlement while expanding RMB use in China linked trade.
• 35:58
  SPEAKER_00: RMB gold-backed use in China linked trade.
• 36:02
  SPEAKER_00: Now that is the unfactored dollar risk, a credible challenge to dollar-centered settlement that reinforces the long-duration de-dollarization bid for gold and other non-sovereign reserve assets.
• 36:16
  SPEAKER_00: And as it's internationalized, zero card body risk gold link settlement gains traction.
• 36:22
  SPEAKER_00: It's going to gain traction.
• 36:23
  SPEAKER_00: This is the it's bound to gain traction against what debt ridden little first-tier treasury demand.
• 36:32
  SPEAKER_00: And that's coming under pressure, as we just indicated.
• 36:35
  SPEAKER_00: And there's lots of reports of that, not just Financial Times, but many of the other uh reports illustrate this.
• 36:42
  SPEAKER_00: So the US will actually be forced to defend dollar credibility.
• 36:47
  SPEAKER_00: Well, how's it going to do that?
• 36:48
  SPEAKER_00: And as we outlined last time, once competitive remonetization between China and the US accelerates, a gold revaluation becomes the cleanest balance sheet response.
• 37:04
  SPEAKER_00: So a credible gold-backed RMB would really simply gonna puncture the dollar's reserve monopoly.
• 37:12
  SPEAKER_00: I mean, the dollar dominates because it remains the deepest, most liquid settlement asset right now.
• 37:17
  SPEAKER_00: But July's launch of the PBOC's physically backed Hong Kong Gateway starts to change that by giving reserve managers a hard asset benchmark against dollar paper, essentially.
• 37:31
  SPEAKER_00: So a Chinese gold anchor is simply going to expose the dollar's lack of monetary backing.
• 37:38
  SPEAKER_00: The US dollar is supported by treasury depth, military power, tax capacity, and the network effects of that, but not by convertibility into a tangible reserve asset.
• 37:52
  SPEAKER_00: A gold-backed RB would make that contract explicit.
• 37:57
  SPEAKER_00: And unless the US revalues gold, it will face a reserve confidence problem.
• 38:02
  SPEAKER_00: So if central banks, commodity exporters, and trade surplus nations begin to diversify into gold-linked RB instruments, which they will, the marginal big for US treasuries will weaken.
• 38:17
  SPEAKER_00: And we're seeing that already.
• 38:18
  SPEAKER_00: Raising funding pressure on Washington.
• 38:21
  SPEAKER_00: That's clear.
• 38:23
  SPEAKER_00: They've got to join the party.
• 38:25
  SPEAKER_00: As it's been for the last 6,000 years, gold will restore itself as the neutral referee between currencies.
• 38:33
  SPEAKER_00: And once major power credibility links um it links its currency architecture together to gold, markets would begin comparing other currencies in gold terms rather than purely through interest rate spreads or bond yields.
• 38:52
  SPEAKER_00: Back to 6,000, what's been happening for 6,000 years, what the Fed took, um, what the Fed tried to dissolve in 1971.
• 39:03
  SPEAKER_00: So the US basically will have three really choices.
• 39:10
  SPEAKER_00: Um you kind of ignore it, well, ain't going away, um, and um defend the dollar with higher rates.
• 39:18
  SPEAKER_00: Well, really?
• 39:19
  SPEAKER_00: Um that's gonna pressure pressure US debt sustainability.
• 39:24
  SPEAKER_00: Or really, what are they gonna do?
• 39:26
  SPEAKER_00: Revalue gold upwards to strengthen the dollars balance sheet credibility may be simpler.
• 39:33
  SPEAKER_00: So a US gold um revaluation would be the cleanest balance sheet response, which is really what we're saying.
• 39:40
  SPEAKER_00: But um, what it's doing is marking US gold reserves to a far higher price would improve the asset backing of uh the sovereign balance sheet without requiring immediate austerity or a formal return to the old gold standard.
• 39:57
  SPEAKER_00: So America would not need to re-announce to really announce a classical gold standard.
• 40:05
  SPEAKER_00: Um, like China, the US could instead move towards a gold liquidity narrative, um, using gold as a strategic reserve asset um and a balance sheet stabilizer rather than a fixed price convertibility.
• 40:24
  SPEAKER_00: Look, this what we've seen is this is create a forced uh revaluation dynamic.
• 40:31
  SPEAKER_00: So what we're saying is this inevitable gold price reset is really leads to just one inevitable question.
• 40:44
  SPEAKER_00: How are you positioned?
• 40:46
  SPEAKER_00: Are you positioned well ahead of a gold and silver price reset?
• 40:50
  SPEAKER_00: I hope so.
• 40:52
  SPEAKER_01: All right, that wraps up another episode of Live from the Vault, brought to you by Kinesis Money.
• 40:57
  SPEAKER_01: And a big thank you to Andrew McGuire for sharing his deep market knowledge, and also to you for tuning in and being a part of this growing global community.
• 41:06
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• 41:22
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• 41:27
  SPEAKER_01: And uh you may well be selected for our next episode right here on Life in the Vault.
• 41:32
  SPEAKER_01: And with that, we'll be back next week with more truth that you won't find on the mainstream media.
• 41:38
  SPEAKER_01: And until then, remember buy physical and make sure it's backed one-to-one.
• 41:42
  SPEAKER_01: Until then, we'll see you next time, right here on Life in the Vault.
• 41:46
  SPEAKER_01: Bye for now.