China – Gold – Financial Capital of the World

MAO-r

QUESTION:  Martin…in your previous work, I had noticed that China was due to become the world’s new hegemon by 2015.75.  Several sources that I follow, one included below, indicates China’s voracious appetite for metal, something the west seems willing to accommodate at this point.  It seems the lower the price goes, the more China is willing to buy.  To assume the mantle of world hegemon, it makes sense that they are able to fulfill the “he who has the gold makes the rules” axiom, and at some point, they would become the gold market, much like London has been the hub for years.  With reference to your recent position on the gold market and where it is likely to go, as your work suggests, it would seem foolish for the Chinese to do what they are doing.  Can you comment on this please?…many thanks…b

WorldEconomy

ANSWER: Capital is shifting and China will become the financial capital of the world. But that is not likely until after 2032. The West must meltdown first. Below is a chart of Britain’s debt. This illustrates that Britain peaked with World War I and the title shifted to the USA.

UK Int % GDP DT

But people are confusing the gold buying in Asia and playing games with people to support buying gold now. This is total misrepresentation of the facts. The people buying gold in India and China are private individuals – not the governments per se. Yes, China has increased its gold reserves. But that is irrelevant. This has NOTHING to do with supporting price or anything else. The people have been unable to buy gold in the past and began buying it after 2008. That does not negate the people in the US and Europe selling their old jewelry or the expansion in mining and of course the decline in investment among funds who have been net sellers for the last year.

GCChannel-Y

People will return to gold ONLY when there is a crisis. The ECM turned down in 2007. Gold did not exceed the 1980 high in nominal terms until 2008. The rally was with the economic decline. You will NOT see another such rally in gold until the current wave of the ECM turns in 2015.75. We are preparing a special report dealing with this nonsense about inflation with charts showing this is just selling propaganda.

ECM2011

In 2011 our model TURNED UP and we called for a rise in the stock market that was correctly reported by Barrons. You cannot have the economy rising and stocks off to new highs and gold moving to new highs under the same scenarios. Everything is linked. We would NOT have been correct on the new highs in the stocks market unless we were ALSO correct about gold. You either want to make money or you like to donate to the banks and promoters. You have to understand what it is you are doing.

UP-DOWN

There are many who comment illustrating they are desperate and WANT to believe I am wrong and gold will soar to new highs any day now. Those arguments I heard for 19 years as well between 1980 and 1999. You cannot fight the trend. The markets are NEVER wrong – people are. If a market is doing something you did not expect – trust me – you are wrong not the market.