Courtesy of Koos Jansen @ In Gold We Trust:
As we can see power shifting from West to East on a daily basis at the current time of writing, in the fourth quarter of this year the Shanghai Gold Exchange (SGE) will launch an international board in the Shanghai Free Trade Zone (FTZ) for investors worldwide to trade gold spot contracts denominated in renminbi. The purpose being is becoming not only the world’s primary physical gold market but also increase pricing power and internationalize the renminbi.
Shortlist of recent developments regarding the rising powers in the East:
- Russia’s central bank bought 28 metric tonnes of gold in April
- Russia set up a Euarsian Economic union with Belarus and Kazakhstan
- Russia dumps record amounts of US treasuries
- Russia closes an energy deal with China worth $400 billion (amongst 40 other business contracts)
- Putin says Russia and China need to secure their gold and currency reserves
- China openly calls for de-Americanization of the world
- China, Russia, Iran and 21 other countries bolster cooperation to promote peace, security and stability in Asia
- China is buying assets all over the globe and investing in infrastructure in Africa and West Asia
- China is importing unprecedented amounts of physical gold
The SGE international board will be another blow to the US dollar hegemony, as more people around the world will hold renminbi, use the renminbi for trading gold and China wil have more power in pricing gold, though the international board’s pricing power can only be wholly exploited when the renminbi is fully convertible.
A Provisional Introduction To The Shanghai Gold Exchange International Board
Currently I don’t have any official documentation on the launch of the SGE international board, but by reading media (one, two, three, four) and from a source in the mainland, this is what I understand of it at this point: China’s central bank, the Peoples Bank Of China, has given approval to the SGE to set up a subsidiary company called the Shanghai International Gold Trading Center to operate the international board. The SGE is currently working on member recruiting, including commercial banks, gold producing companies and investment funds. Allegedly HSBC, ANZ, Standard Bank, Standard Chartered and Bank of Nova Scotia are to take part in the global trading platform. Continue reading