The PAGE Is Turning

Wed, Aug 31, 2011 - 7:16pm

Our Australian friend, "Turdle", recently brought all of this to my attention. What we are about to discuss will truly have significant and consequential effects on the global trading and pricing of gold and, by extension, silver. Pondering the potential impacts of the Pan Asia Gold Exchange will require some time and mental clarity. If you feel you currently have appropriate levels of both, then let's proceed with the discussion.

First, some background. The Turd has been of the opinion for years that the forward-thinking Chinese are not necessarily planning for tomorrow, they are planning for 20 years from tomorrow, 50 years from tomorrow and 100 years from tomorrow. For example, if you listened to the "Time Monk Radio" interview of Jim Rogers, you heard me ask Jim about the possible, future "gold-backing" of the renminbi by the Chinese. I believe that one of the reasons the Chinese central bank is buying gold is to accumulate gold reserves for this purpose. Of course there are other reasons, too, but at some point in the future, China will sponsor a new regional or global currency that will be at least partially backed by gold. As part of this plan, Beijing is currently developing alternative futures and physical metals markets. The Hong Kong Mercantile Exchange is part of this plan. The soon-to-be-opened Pan Asia Gold Exchange is another.

Update: Comex Alternative: Pan Asia Gold Exchange, Silver Contracts start 22-7-2011!

It is this Pan Asia Gold Exchange (PAGE) that is the short term game-changer. By providing the world with a physical settlement and pricing structure outside of the bounds of the current LBMA/Comex scheme, the PAGE may, once and for all, allow for true price discovery of physical metal. The PAGE will make the current pricing system obsolete as global investors seek true physical metal that is unencumbered by leasing, titling and derivatives. A good starting point for your understanding of this concept is this 15-minute video from James Turk's GoldMoney site. Watch it right now.

Turk went on to have a follow up conversation Richard Poulden. Mr. Poulden is the Director of Power Capital Financial Trading. PCFT is the only private company allowed as an investor in the exchange. It's safe to say that he knows a little bit about the exchange, its dynamics and its opening date.

Now, I need you to think about what this all means and what the ramifications will be for the price of precious metals in 2012. Many have wondered how gold could ever possibly trade to Santa's target of $12,000/ounce. Under the current price suppression scheme of fractional bullion banking, it would be a significant, if not insurmountable, challenge for it to get there. If the PAGE succeeds in becoming the preeminent pricing mechanism, $12,000/ounce may prove to be a conservative estimate. No, gold won't trade to $12,000 in 2012. It might make it there by 2020, however. In this context, consider, too, the news last week that Venezuela was repatriating their gold from London. Does El Commandante want to get his little fingers on his gold before the LBMA house of cards crashes to the ground? It's what the hell I'd be doing if I were him.

My questions for you are some of the same that Senor Chavez undoubtedly asked himself:

1) Do you own physical gold?

2) Where is it stored?

3) Is it in an "allocated" or "unallocated" account?

4) If it's allocated, have you ever actually seen it? Have you ever actually touched it? Have you ever tried to withdraw it?

5) Do you own shares of GLD and/or SLV? Are you confident that they "own and hold" all of the gold they claim?

6) Do you trade leveraged paper ETFs like AGQ or UGL? What is your plan should the Comex fail?

My answer to these questions is simple: Physical is physical and paper is paper. You don't own it unless you hold it. Those relying upon the permanence of the status quo are about to receive a very rude wake-up call. Those of us who own and stack physical metal are about to see the fiat-conversion value of our metals skyrocket. The time is now for you to prepare for this historically transformative event.

About the Author

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Sep 14, 2011 - 4:50am

Gold prices are revolving

Gold prices are revolving about the stratosphere at a cost of $1859.20 per ounce as of noon Eastern Monday, according to Canadian metal dealing authority Kitco. High prices usually bring con artists out of the woodwork. With information, you can guard yourself against such gold scams. You can get some tips here: How to avoid gold scams today

Timber TimStormdancer
Sep 10, 2011 - 10:48pm

@stormdancer some good random bits

The more I read the more I am convinced.Gold is going to become the world reserve currency.No one will need to say it or announce it.This is not a bull market in gold,for that you would have to assume a downside.It is the rise of a currency.Plenty of wealthy indians to buy china's goods etc.To make up for the contraction of consumer demand from the west.

I would bet that there gold production is probably much higher.

Sep 10, 2011 - 3:11am

PAGE website

I know this thread isn't all that active now....but if anyone out there is as fascinated with this PAGE development as I am, here's a couple peripherals I've dug out of the PAGE website.

Early on, there were many disagreements about whether or not the Chinese government was actively encouraging private purchase of precious metals by Chinese citizens. This, and the recent wikileaks revelations seem to confirm it is true.

If there is a move to back global trade with gold resulting in realizing some of the $50,000 plus per ounce speculation we've all heard, India is going to suddenly become the wealthiest nation on earth. I've read estimates of how much gold is held in private hands in India and they range from 15,000 to 22,000 tonnes, exclusive of official reserves. Two or three times reported US official reserves. 15 to 20 times China's reported official reserves.

It looks like China is definitely, purposely encouraging private capital to participate in bringing more gold into China to close that gap with India in particular.

I finally made time to read the whole thread and saw where TurdleGG mentioned that the Chinese language website had already posted the governing rules and regulations but google translate isn't quite up to the task of making those understandable to me, so I'll have to wait until they translate them and post them to the english language site, but I intend to keep an eye on that. I'm very curious to see what the nuts and bolts of the exchange look like.

This next graphic looks like it's designed to make each bubble a hot link to detailed information. They are not currently active links. Once that kind of detail is posted we'll be better able to assess exactly what impact PAGE is likely to have.

I'm always looking for somewhat "official" supply and demand numbers so I found this interesting:

That last line I underlined in red again seems to point to thinking in "per capita" terms in addition to expanding official reserves of gold. It looks to me like the government is sewing up all the internal mine production while encouraging their citizens to scour the world markets for still more.

Just some random bits :)

Timber TimStormdancer
Sep 7, 2011 - 2:59pm
StormdancerTimber Tim
Sep 6, 2011 - 7:13am

@ Timber Tim

Tim, thanks for your kind words. There is a bit of a teacher hiding in my heart and it truly does encourage me when someone else finds value in my efforts :)

Thanks :)

Timber Tim
Sep 5, 2011 - 3:10pm


Thank you Stormdancer for a fantastic answer.It is very much appreciated.Your answer has led me to believe that this might be the first steps by the Chinese to implement such a system you describe.Though of there own style and of course less freedom attached to it.Using the good PR of gold to build confidence in the RMB as it trades along side the dollar.Giving it status it will need to become number one.PAGE is just another mechanism to pull the world to it.As you describe with the honeybee's.A perfect visual depiction .Of course it will be slow and steady.But it is beginning.If they operate PAGE as a completely separate and honest price discovery system.As seems to be the case on the surface.Then the manipulation in the existing exchanges will start to shine like a beacon.To those who have doubted the possibility.This will give China the power over the system as a whole.I am sure they won't leave it to true free market discovery.They will want the political leverage that PAGE brings,at the negotiation table.You Know, we want the sole rights to the Simpsons or we will bring down your banks.

No Euro at PAGE,what a surprise.When the Chinese PM during his early summer trade tour,said the Euro won't collapse,maybe he was implying the opposite.Dam it,I trusted him. I think we shall know sooner that later.China and America eliminating the competition maybe.Even though the Euro really shot itself in the foot.Not just once,but continually.Maybe it will grow from here.

So the struggle is between themselves now.China's goal I would say is to contract the American $650 billion dollar defense budget.To stop the expansion.So it can move into the vacuum left behind.For a bit of shopping with it's large reserves.A perfect example of why,is libya.There where 30,000+ chinese workers in Libya before Nato.Building infrastructure etc and no doubt enjoying the benefits of sweet crude.Plus this will be a great loss of face and you know ego's,a great driving force.I know I have wandered from PAGE slightly.But the interconnectivity of all the things going on.I feel will give an true indication of PAGE'S impact.

If that beacon did start to shine and the bees started to swarm for migration to the east.I think that long before that happened.That a new system would role out here in the west.Look at Bullionvault it is a perfect samll template for a new way of trading gold and silver,within a honest system.All you would need to do is scale it up.Plug in the brokers and your off.Direct ownership of the metals.You could add anything you like to it.It is extremely fluid in it's application.Offering multiple currency exposure which could also be expanded.It could even offer metal to metal exchange if so desired.At the moment it trades around the established spot price.Though silver is nearly always trading above the spot and gold has bid and offers either side.This system if scaled up around the LBMA could give a fluid continous and fixed spot price automaticlly determined by unleveraged demand.If it's not in the vault than it can't be traded.Maybe this will be the last resort if the bees lose confidence.However bad things are in the west.We are still able to do things like we are doing now.Communicating freely.My bet is that people will gravitate towards a society that allows for it's citizen to scrutinize and criticize it's institution etc.As that will keep it honest,well nearly honest.So no taxes or export controls needed.Just a reinvention.New and improved LBMA .

One last thing Stormdancer.I want to thank you for your writing.You made the complicated easier to understand for me.A mark of a true natural teacher in you.You want people to understand your viewpoint and impart your Knowledge.Rather than make it a self congratulating excercise.You are in true persuit of knowledge and understanding.You say to others with your writing "YEH MAN COME ALONG FOR THE RIDE".

Sep 5, 2011 - 11:51am


Funny how so many old songs now "speak" to me in ways I never heard back when I was actually listening to them every day. Funny how many artists were trying to give some pretty insightful and detailed warnings. I always thought I was sharper than the average pocketknife...and most of my life I've been duller than a mushy cucumber. Truth sucks sometimes :)

Thanks for sharing (I think?) LOL!

Sep 5, 2011 - 11:05am

@Stormdancer ... Re:- it is entirely possible that gold could ..

Entirely logical, potentially desirable for the betterment of society as a whole, and VERY well said. ... 'Tis just a damn shame that something like that is unlikely to come to fruition due to the nature of (some) of our species.

BTW ... Please wait there ... Your free government renditionary holiday-service taxi will be along to collect you shortly.

..... Your Solution :-

Tom Robinson Band - Too good to be true 1978

..... And what us Dangerous libertarians, gold & silver bugs, & contrarians are generally viewed as by (ANY) Government :-

Tom Robinson Band - Power in the darkness

.... And their (ANY) Government's usual response :-

tom robinson band - man you never saw

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StormdancerTimber Tim
Sep 5, 2011 - 3:33am

Tim it is entirely possible

Tim it is entirely possible that gold could serve very adequately as a global currency apart from any other. It just isn't likely. To do so, governments would have to be constitutionally restricted from attaching a currency value to gold. Gold would need to be denominated exclusively in terms of weight and fineness. Usury payable in gold would have to be absolutely and unequivocally forbidden.

If I'm not careful I'll launch into a book length treatise here....but in short I don't have much hope such a system will ever be implemented because those few who profit so incredibly from fiat, "gold-exchange" and even so-called gold standard systems will never willingly give up their exorbitant privilege which allows them to live like kings while producing nothing of value.

Enacting such a system would require a population far more savvy about money matters than we are now, and a willingness to spill blood in digging out the currently entrenched seats of power.

It would require men of both understanding and impeccable integrity to watch over such a system to ensure that immoral men could not begin anew the insidious process of corrupting a pure monetary system.

“The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages...will bear its burden without complaint, and perhaps without suspecting that the system is inimical to their best interests.” — Rothschild Brothers of London communiqué to associates in New York June 25, 1863

The problem is not in the difficulty of setting up a sound monetary system. It's not difficult. The problem is the depravity of man.

Here's a quick way out of our current mess. Two years of pain....max.

1. Return currency issuance to the Treasury where it constitutionally belongs.

2. Constitutionally forbid the government from interfering with the free exchange of gold, limiting government's role to defining the weight and purity of gold units to be used in trade.

3. Constitutionally forbid the charging of gold interest on gold loans (interest on gold loans could be paid in Treasury notes, but NEVER gold.)

4. Constitutionally forbid the imposition of any law limiting the cross border movement of gold ... into or out of the country.

5. Open the mint to gold. ie....allow any citizen to bring gold of the required fineness to the Mint for coining, free of charge.

6. Return to 100% reserve banking. Banks become providers of services for a fee, not money factories legally entitled to print money out of thin air. Banks act as aggregators of excess capital and loan out that excess capital in partnership with the owners of it. Loaned money is tied up for the duration of the loan from the perspective of the lender.

5. As circulating Federal Reserve Notes are returned to banks they are replaced one for one with Treasury notes issued without interest.

6. Pay off existing Treasury Notes/Bills/Bonds with Treasury notes.

7. Eliminate the unconstitutional Federal Income Tax - it's not even needed...Treasury prints the money to pay government expenses and spends it into the economy.

If a spendthrift government runs the printing presses faster than the economy is expanding, thereby devaluing Treasury notes, gold stands as the foghorn that will tell the tale. It will take increasingly larger sums of Treasury notes to buy gold. Gold also stands as guardian of the productive workers and savers.

These ideas are very, very similar to FreeGold. A division of the two most important functions of money between two monetary instruments. Treasury notes would fill the role of currency while gold filled the role of storing value.

Wages, bills and taxes would all be paid in Treasury notes. Savers could instantly convert whatever portion of their income they desired into gold.

I love the idea of FreeGold and in a perfect world filled with perfect men it would be the natural course for money to take. As long as "we the people" lack the integrity to avoid eating just a li'l o' that gubmint cheese...we will lack the moral foundation for taking the real jackals out back to face the firing squads they so richly deserve.

Again, it's not the difficulty of implementing a sound monetary system. The heart of man is the roadblock.

Edit: BTW...the above is far from the ONLY way sound money could be had. There are a host of options, each with relative strengths and weaknesses (I know of none perfect)....ANY of which would be untold thousands of times better than anything we've seen in the last hundred years.

Timber Tim
Sep 5, 2011 - 1:11am


"That's a racket they'll move heaven and earth to protect. It amuses me to see people poo-pooh the idea that gold will ever trade at $50,000 per ounce...because deep in the bowels of the LBMA it's already been trading at that price for some time :)"

Great point Stormdancer and a smiley face because you put $50,000 and ounce together.So I could just for a second imagine the impact of that on my life.Yes they would move Heaven and earth.They would find some way to spin it to contain flight.National interest and all that.Maybe drum up another war.Your the stakes are enormous.

Stormdancer I am not as clued up as I would like to be.I had to look up dollar Hegemony.But now I know.But in your opinion is it possible to have gold as a free floating world reserve currency with no single fiat pegged to it.In the past it was always pegged to a currency.So the paper represented it in some way.But now it could represent itself digitally.Is there something about fiat attachment that I am missing.Apart from the country that attaches it assumes greater control and value.

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