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China's takeover of the West continues as they receive invite to set gold prices
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June 16, 20159:47 AM MST
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Courtesy of Economic Furore
Photo by ChinaFotoPress/Getty Images
For years, a conglomerate of banks in Europe and the United States have convened each day to determine the spot price of gold and silver. But with numerous scandals rocking Western financial institutions such as Deutsche Bank in recent times, many banks, including this German behemoth, have decided to abandon their positions on the London metal fix committee and it has now opened the door for the world's largest physical gold market to become a member.
[size]Intercontinental Exchange (ICE) Tuesday announced here that the Bank of China has been approved by the ICE benchmark administration to participate in the gold auction which is used to determine the London Bullion Market Association (LBMA) gold price, a benchmark physical gold price in the world.
On the same day, the bank stated it was the first Chinese and Asian bank to directly participate at the gold price auction.
The London gold market has long been accepted as the global spot gold pricing centre. The LBMA gold price, which replaced the London gold fix established in 1919, is widely used in settlements between producers, consumers and financial institutions, and has been an important pricing benchmark for gold derivative contracts.
Finbarr Hutcheson, president of the ICE benchmark administration, said in a statement: "We are delighted to welcome Bank of China to the gold auction. The growth in daily volumes coupled with the increase in participation from around the globe, demonstrates strong market support for the independent governance and oversight we have implemented to bring transparency and trust to the gold price auction." - Xinhuanet
The major significance of this unprecedented move to allow a non-Western bank to be a part of the daily gold price fix is that China has been selling physical gold at their Shanghai exchange for much more than the current paper spot prices set each day. In fact, according to economic analysts like Dr. Jim Willie of the Hat Trick Newsletter, large physical purchases of gold have seen premiums of between 30 to 60% , making the buy price upwards of $600 or more per ounce than the London fix price.
Several financial analysts and economists have intimated that China has begun a full fledgedtakeover of Western banking institutions to go along with their own separate, yet competitive infrastructures such as the AIIB, Belt and Road initiative, and Petro-Yuan. And when you look at what has taken place in just the past two years, where China has not only purchased the former headquarters of J.P. Morgan Chase and owns upwards of 60% of the commercial property in parts of Manhattan, the moves just this week in the IMF and London gold fix committee signify that their potentiality to become the gatekeeper of the next global financial system is already in full swing.[/size]