The Chinese do not care about retail investors that are getting screwed by a criminal cartel. They are interested in buying up as much bullion as they can, quietly and cheaply, before the value of paper money goes into a terminal tailspin. All of the stories that the Chinese buyers have taken on the Cartel and intend to force a default are pure nonsense dreamed up by bored speculators. China knows that if they make any positive noises about the metals at all the markets will react with higher prices. Therefore they get less ounces for their paper money. And what is currency devaluation? Less ounces for their paper money. By talking up the metals or forcing a default they will achieve exactly what they hope to avoid.

This is not just a factor in the gold and silver trading. We have also seen distinct episodes in the markets for lead, copper, and iron ore, just to name a few, when the Chinese backed off buying for a while and let the prices fall. In each case there were reports of looming gluts for these commodities and questions about the sustainability of the Chinese economy. But the Chinese are smart enough to accumulate on weakness and back off from strength. That is pretty much the real story.

So my opinion is that the Chinese are indeed involved in some shorting on the COMEX to create weakness to buy into. They also systematically withdraw from purchasing PMs to let the price fall, and trigger selling by spec tourists. Sure the criminals in the Cartel are helping this process along for their own greed but in the end, China will step up and buy all the metal they can get as cheaply as possible and trigger buy-stops from the shorts along the way. The bull market is taking a pause and nothing else.

As investors, little guys in the great game, all we can do is react with knowledge and play the same game. Buy on weakness and do not be spooked by foolish rumors and commentary from people that have never had a clue about the metals.

cheers!

mike