Earlier this week, there were two major financial events which occurred with little fanfare by the mainstream media, but could be leading to profound consequences for the dollar and the future of the global reserve currency. On April 15, long time Wall Street metal and bond analyst Rob Kirby forecast in an interview on USA Watchdog that the revelations by Deutsche Bank of gold and silver manipulations are just the tip of the iceberg, and that major devaluations or even a crash of the dollar could be coming as quickly as the next few weeks.
In his interview with Greg Hunter, Rob Kirby expressed the point that these manipulations go far beyond simply domestic and foreign banks participating in the de-frauding of the gold and silver markets, and that if you follow the money, they lead directly to the U.S. Treasury Department and Federal Reserve. And this alone could explain the sudden ’emergency’ meeting that took place on Tuesday when Federal Reserve Chairman Janet Yellen called for a meeting with President Obama and Vice President Biden at the White House.
Greg Hunter: What about this Shanghai Gold Exchange (SGE)? They are basically a competitor to the Comex and the LBMA, the two fraudulent pricing institutions for gold… is that one of the reasons why they are having these three or four emergency meetings with the President, and the Fed, and the Board of Governors… what’s going on?
Rob Kirby: I believe that these events, the official launch of the SGE, which is due to launch on the 19th of April, which is next week, and the other thing that I think bears watching is that the Chinese have signed a Memorandum of Understanding (MOU) with SWIFT. And with China merging their upstart system called CIPS (Chinese Interbank Payment System) with SWIFT, my gut is telling me that this will very much marginalize America as the arbiter, or main processor, of global payments.
GH: What will this do to the dollar?
RK: This could embody a global reset in terms of which currencies are going to be the world reserve currency. Because I have a very sneaking suspicion that when China merges with the SWIFT system, I believe there is a strong possibility that they will back their currency with gold.
GH: All of this is coming down at the same time… they had the silver (and gold) thing revealed officially, and you have the Shanghai Gold Exchange coming on, and you have this China bank merging with SWIFT… are you saying we can have a dramatic and overnight reduction in the value of the dollar?
RK: I think that this is coming in very, very short order Greg. To me the trail of bread crumbs is so pronounced and it is so indicating what is afoot right now that I think it is going down in the next two or three week. – USA Watchdog
Taking into consideration the numerous events that shaped the political and financial environments last week, you begin to see the same picture that Rob Kirby shared in his interview yesterday. On Monday, the Federal Reserve called for a sudden emergency meeting, which was followed shortly by news that Janet Yellen would be meeting with President Obama at the White House the very next day. Then on Thursday, Deutsche Bank revealed what many alternative economists have declared for years now that the gold and silver markets were fraudulently manipulated to protect the dollar, especially since the U.S. began monetary policies of quantitative easing and zero interest rates.
All of this is culminating in what will come next week when China opens the Shanghai Gold Exchange for a new price discovery mechanism which will force an arbitrage on the Comex and LBMA, and either cause the Western gold markets to raise prices to equilibrium with China, or see a massive outflow of gold from West to East as investors buy gold and the lower spot price and sell it to the SGE at the new higher price.
Either way, the geo-political gambit by China against the dollar is now underway, both in usurping the West’s own SWIFT system, and in undermining the dollar’s foundation by taking over global gold pricing. And with little to backstop the dollar besides military intervention, chances are becoming very good that within weeks we could see the reserve currency devalue precipitously, or at worst, even collapse altogether.