This is it! From Jim Willie's Hat Trick Letter. If you know and understand this and you know and understand that Chinese history is a history of revolutions and you now and understand that Chinese leaders are not concerned with anything as much as not getting overrun and slaughtered by the masses, then you know and understand that the game is over. We have won. Bull

◄$$$ PRITCHARD IDENTIFIES THE 'BEIJING PUT' ON GOLD, A VERY IMPORTANT CONCEPT REVEALED. TRANSLATED INTO SIMPLE TERMS, IT MEANS CHINA WILL SUPPORT ANY DROP IN THE GOLD PRICE TO PREVENT A BIG DECLINE, AS THE EMERGING GIANT GRADUALLY ACCUMULATES A GIGANTIC HOARD OF GOLD. A KEY CHINESE OFFICIAL REVEALS THE STRATEGY. THEY HAVE OFFICIALLY LOST CONFIDENCE IN BOTH THE USDOLLAR AND USGOVT POLICIES, BUT WILL NOT PUBLICIZE THIS REJECTION. THEY WILL JUST BUY GOLD CONSTANTLY. CLIMBING ABOARD THE CHINESE GOLD TRAIN IS A NO-LOSE TRADE. IT IS WELL BEYOND THE STATION, ONLY NOW BEING RECOGNIZED. $$$

Ambrose Evans-Pritchard has identified openly what the Hat Trick Letter has been screaming for a full year. China is buying gold in large quantities, actively supporting its price. They will continue to exploit price drops with huge purchases. They will continue to buy and buy and buy gold, with some care given to avoid a single source price runup effect. They are patient people. They want a gold movement to take root globally. They encourage their own citizens to buy gold. Their motive is not only to hedge against the corrosive USDollar, but also to construct a new financial structure that places China at the forefront of global banking.They recognize the fractured USDollar foundation in the global monetary system. They disrespect, decry, and discard the USGovt policies, which they clearly see as syndicate support for Wall Street at the expense of the entire USEconomy. They abhor and openly criticize the futile stimulus plans, the deep investment in Black Holes (see AIG, Fannie Mae). They object to continued USMilitary tacit support by means of USTreasury Bond purchases. They have embarked on a very coordinated impressive plan, fully described and outlined in the Hat Trick Letter for several months. Details of what is being called the 'Beijing Put' on gold are taking shape. It supports the gold price with strong hands. This label contrasts with the 'Greenspan Put' which supported the US stock prices for years by means of his action to lower interest rates or call in the Plunge Protection Team cavalry at the sign of trouble.

Ambrose E-P attended the Ambrosetti Workshop in Lombardy Italy, a gathering of politicians and global strategists at Lake Como. He spent much time with Cheng Siwei, a unique person in China. Until recently he was the Vice Chairman of the Communist Party Standing Committee, but now serves as a sort of economic ambassador for China around the world, a freelance consultant. He is more a political official, not a monetary policy official, but he influences important policy. Cheng was one of the original party officials to recommend that China should diversify almost two years ago some of its trillion$ of currency reserves into stronger currencies. Cheng is now head of China's Green Energy drive. He claims thatBeijing is dismayed by the USFed's recourse to monetary and credit easing. He suggested shifts into the Euro, to offset weak currencies like the USDollar. His words move the financial markets often, making him like a Greenspan iconic figure. At the workshop, Cheng Siwei listened attentively as several American guests harshly condemned President Obama's economic and health policy.

Cheng's comments about US monetary policy and gold seems clearly to validate the firm belief held by gold bugs that China has fundamentally lost confidence in the USDollar and has begun to aggressively shift to a partial gold standard through reserve accumulation. He minimized the importance of industrial metals like copper, since they could not adequately serve a double role as a proxy currency or store of wealth. He said, "Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not stimulate the market."There you have it. Perhaps the most important financial mind in China laying it out. China is buying the dips, and will continue to do so as a systematic policy. His comment explains well the gold price action seen for months. Every time it looks as if the bullion market is going to weaken in a significant manner, some big force steps in. It is like the Hidden Hand in pursuit of a gold market efficiency objective, ensuring proper value. The Chinese Hand undoubtedly stands in direct opposition to the Corrupt US Hand that suppresses the gold price. This entire story validates the claim that the United States and China are at financial war over Gold and the USDollar.

Cheng harbors little respect for the monetary experiments of USFed Chairman Bernanke or the slush fund largesse by Treasury Secy Geithner. He elaborated on the dilemma often pointed out in the Hat Trick Letter, that China is bound by US monetary policy, and has been trapped by it since 2001 in clear fashion. They pegged the Yuan currency to the US$, and have managed it closely since July 2005. The Chinese is in effect a prisoner of the US from a monetary standpoint, destined to suffer bubbles, required to match policy step by step. Since 2001, they made a deal with the American Devil, and are deeply wedded, the proof being their US$-based bank dependence and outsized US$-based reserve accounts. These are difficult to shed. The USFed's Quantitative Ease policies are causing great trouble in China itself, where asset bubbles have formed beyond control. Refer to the vicarious speculative boom on the Shanghai exchange and in property, as Ambrose E-P calls it. Cheng reported mid-level Chinese house prices to be at ten times their income. Nowhere is the monetary policy vise tighter than for the Chinese export industries. They could permit the Yuan currency to rise 40% to 50%, where it belongs, for starters. Small profit margins on exports mean that a large slice of Chinese industry would crumble if the Yuan rose enough to effect the trade surplus. The Chinese exports were down 23% annually in July. Their export trade comprises almost 40% of GDP. This straitjacket has already squeezed out millions of jobs, far more than in the USEconomy. Ambrose E-P wrote, "China too is trapped… China's mercantilist export strategy has led the country into a cul-de-sac. China must continue to run its trade surplus. It must accumulate hundreds of billions more in reserves. Ergo, it must buy a great deal more gold. Where is the gold going to come from?" The answer is the Intl Monetary Fund, their Chinese gold mining output, and the open market.

Cheng made many comments. They can be summarized on the consequences to reserves management and the economy. He acknowledges that China is trapped. He said, "We hope there will be a change in monetary policy as soon as they have positive growth again. If they [United States] keep printing money to buy bonds, it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds, and this is very difficult to change. So we will diversify incremental reserves into euros, yen, and other currencies. If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise. Credit in China is too loose. We have a bubble in the housing market and in stocks. So we have to be very careful, because this could fall down… We have lost 20 million jobs in this crisis." See the UK Telegraph article (CLICK HERE).