Today London whistleblower and metals trader Andrew Maguire told KWN to forget the trade war because China is positioning to crush the US in the currency war and Russia is a golden ally.
China Positioning To Win The Currency War
September 14 (King World News) – Andrew Maguire: “This week we evidenced another escalation in the US/China trade war, which in mid-June had already morphed into a dangerous currency war. However, this week the tables began to turn. But to assess what is changing we have to look at the general market which dutifully accepts at face value what the mainstream media tells them.
It is a fact that China has a massive bilateral trade surplus, so it cannot go head-to-head with the US in a trade war. However, a currency war is a completely different animal…
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Andrew Maguire continues: “China is playing the long game and has already put all the components in place to internationalize the yuan and to displace US dollar hegemony with a gold-backed currency. It takes two to tango in a currency war and China is strategically playing the US into its own hands and using gold to do it.
As far as the trade war is concerned, a tit-for-tat devaluation of the Yuan has 1/1 offset the imposed US tariffs, which by design has brought down the commodity sector. However, during this devaluation process, the most important takeaway is that China has maintained the CNY/Gold peg within a very tight range to commodity exporting countries. How is China doing this? The answer is two-fold. The 95% correlated algo driven synthetic marketplace has seen gold and silver prices in dollar terms collapse. But into this US dollar price discount, China has been sucking 400oz. bars from London by swapping US dollars for cheap bullion.
And maintaining the CNY/Gold peg in a very tight range has enabled China to provide price stability to those countries it is buying/exchanging oil in yuan to bypass the US dollar. Short-term currency war pain aside, the 80/20 rule applies. China is focused on providing yuan to the major oil producing countries such as Russia and Iran through the Shanghai Oil Futures Exchange, commonly known as the Petro Yuan contract. Oil producers can lock in a stable yuan/oil price that is instantly convertible to gold. This has been carefully maintained by China.
Pull up a Yuan/gold chart and you will evidence a very tight CNY/gold trading range, with multiple PBOC interventions supporting CNY gold prices at 8214 — with a very tight managed band since the trade war entered a currency war stage in mid-June (see chart below).
China Positioning To Win The Currency War
Though this entire trade war is evolving into an escalating currency war, we have seen US dollar gold prices crash 11.2% (at the recent lows), while CNY/gold during this same period has been managed in a tight 2.0% range.
China Aggressively Attacking US Hegemony
Long before the US/China trade war escalated into a full-blown currency war, the dollar was already under threat as China had already reopened the gold window. The Shanghai Gold Exchange (SGE) is the conduit to exchange gold in yuan, and the SGE supply of physical gold is gold that is continuing to be dishoarded from the West (the UK US, BIS). China pays in yuan, which in turn increases supply of yuan, and converts it to gold sourced out of the West. This is a clear enveloping horn attack on US hegemony and is moving the West toward its own demise.
Maguire Audio Interview To Be Released Within Hours
China is the single largest US creditor, holding $3+ trillion in FX reserves (mostly held in dollars), so why has China allowed the yuan to fall 9% vs the US dollar since Mid-April? If China had chosen to redistribute its FX reserves by swapping dollars for a range of other FX currencies it could have largely stabilized the Yuan/USD cross. Instead, it let the yuan tit-for-tat decline, largely offsetting the effect of the trade wars and establishing a kickback currency war. In the meantime, China and Russia (its ally in the currency war) are aggressively cornering the physical market…Within hours the powerful and timely KWN audio interview with Andrew Maguire will be released and you can listen to it as soon as it’s released by CLICKING HERE.
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