Hong Kong Mercantile Exchange (Commodities: Gold Silver) is surrendering all metal trades and will settle in cash. Defaulted! No Gold or Silver to be given!

This is Super Huge news in my opinion!

The Hong Kong Mercantile Exchange, which is the gold and silver commodities trading house in Hong Kong is immediately stopping/discontinuing and will be settling all gold and silver trades in cash that are in house at this time.  Besides that, they will determine what amount/price they will settle the trades/contracts at.

This is the exchange that began trading gold and silver in 2011 for the Pacific areas.  This is the one we had all hoped would break the gold and silver manipulation.  It seems the manipulation and physical amounts, broke them and they are not able to provide the physical.

On May 18, 2011, HKMEx formally began trading with a US Dollar gold futures contract. ^[9]In an interview with Reuters, Helmig said it plans to launch gold and silver futures contracts denominated in renminbi. He also said HKMEx will follow precious metals products with contracts in base metals, and then energy and agriculture.^[10] On July 22, 2011, the exchange launched a second product, a US Dollar silver futures contract.^[11]As of 5pm on February 13, 2012 trading on HKMEx’s gold and silver futures reached 1,003,210 contracts, representing total turnover of over US$50 billion (around HK$390 billion).^[12] Trading on the exchange's US-dollar gold futures for the first time surpassed the 10,000 contract mark on June 4, 2012.

You have to wonder if people in  Asia were demanding the physical metals, compared to the paper as the Comex people are happy with.   It seems to me they ran out of physical and can no longer operate with physical gold and silver as a commodity.

They are using the excuse of commodity trading not providing enough money for them.  But lets face it.  The fact that gold and silver have been hit super hard the last couple of months and the fact that the Asian's have been buying all the physical they can get their hands on..... doesn't leave much to the imagination of what the truth is.

It seems we now have an official Default of an exchange for gold and silver!   When will the Comex put something out like this?

It will reapply later to trade gold and silver again with the Renminbi, but is ceasing all trading immediately.

There is no physical metals to be had from the exchange for anyone who put trades on it.  

Media Release from Exchange:

HKMEx Voluntarily Surrenders Authorisation To Provide Automated Trading Services

HONG KONG, 18 May, 2013  – The Hong Kong Mercantile Exchange (HKMEx) announces today it has decided to voluntarily surrender the authorisation to provide automated trading services (“ATS”) granted by the Securities and Futures Commission (“the SFC”).

With immediate effect, no new orders may be placed and all open positions will be financially settled at the settlement price determined by HKMEx and its designated clearinghouse.

The voluntary surrender decision was made to enable the Exchange to re-align its strategy with the new industry environment since its trading revenues have not been sufficient to support operating expenses and, as a result, its inability to meet the required regulatory financial conditions.
While trading on the Exchange will discontinue, HKMEx as an organisation will continue to operate with its existing staff, and will focus on developing new products including renminbi-denominated precious and base metals contracts that will better meet customer needs. It also intends to re-apply at an appropriate time for an ATS authorization to launch these products with stronger and more effective market maker programs.

“The favourable conditions under which HKMEx was founded have not changed. Global commodity demand continues to shift towards Asia as the region undergoes sustained growth, presenting great opportunities that we will continue to exploit,” said Barry Cheung, Chairman of HKMEx. “Our priorities now are to protect members’ interests by ensuring effective closing of open positions while strengthening our shareholding base and developing new products that play to our distinctive strengths.”

In closing out the open positions, the Exchange has developed a plan in consultation with the SFC to ensure the process is orderly and that investors are well informed of the matter. The Exchange will disseminate settlement prices to its members the morning of next Monday, 20 May 2013. Investors may contact the Exchange’s hotline at +852 3900 9898 for any assistance or enquiry.

China's Gold demand to outstrip supply by 2015 by 550 metric tons

China has a ferocious appetite for Gold now.  In 2012, Hong Kong shipped 94% more gold to the mainland than they did in 2011.

They are buying all the gold they can get and China's gold councils have projected by 2015, China's demand will outstrip their supply by 550 metric tons.   

There are approximately 2471 tons of gold mined annually around the world.  China mines approximately 403 tons of that.  That means within 2 years time China will be buying almost half the gold mined.

It is estimated they bought 832 tons of gold in 2012.  Here is an article from China on that subject alone.

China's gold consumption amounted to 832.18 tonnes in 2012, an increase of 9.35 percent from a year earlier, data from China Gold Association showed Saturday.

Consumption of gold jewelry rose 10.09 percent year on year to 502.75 tonnes, while those of gold bars and gold coins gained 12.22 percent and 21.63 percent, respectively, to 239.98 tonnes and 25.3 tonnes.

But consumption for industrial and other uses saw a drop last year, the association said.Demand for gold has grown steadily over the years as more Chinese see it as a hedge to diversify investment risks and battle against inflation.  China is currently the world's second-largest gold consumer after India.

China produced 403.05 tonnes of gold in 2012, making it the world's largest producer for the sixth straight year, according to previous data from the association.

Portions from article about demand:  (sorry for some reason the below will not format correctly, it splits the words when published)

The country's demand for the precious metal is expected to outstrip supply by at least 550 metric tons by 2015, statistics released by several gold councils showed.

China has been the world's biggest producer of gold for six years since 2007, with an annul output of 403 tons in 2012, a year-on-year growth of 11.7 percent.

A quarter-to-quarter comparison shows China's demand for gold investment saw a 24 percent increase in the fourth quarter of 2012, said Marcus Grubb, the council's managing director for investment.

To meet demands for physical gold, Hong Kong shipped 114 tons of gold to the mainland in December, a record high for monthly exports. Hong Kong's net gold flow to the mainland jumped 47 percent in 2012, totaling of 557 tons.

Data from the Hong Kong Census and Statistics Department show Hong Kong's total gold shipments to the mainland in 2012 jumped 94 percent from 2011 to more than 832 tons, while imports were six times higher at 275 tons.

You really have to wonder with China's purchases of gold and the demand so high, how is it that gold keeps getting hit and the price falls drastically as it did this last Friday.

I spoke to David Morgan from Silver-Investor.com  on Friday when Gold and Silver were getting smashed about what is going on.  He said that he believes they are in such a bad position of shorts that they had to smash it to get people to give up their long positions and to sell their gold and silver.  We spoke about the psychology of it and getting into people's mind in giving up their gold and silver.  Last year I interviewed David about that subject and the psychology of smashing metals.

I have no doubt that China loves the manipulation of Gold by the Western bankers so they can purchase at lower prices.  It is said they participate in the manipulation, which would make sense, so they can keep purchasing all they can get their hands on.

The question is.... are we now getting to the point that full demand has outstripped the physical and they are playing the paper to get people to give up their physical?  Is there such a shortage with countries now wanting to repatriate their gold, they are desperately smashing it for the last few times until it breaks away?

In regards to silver, there was an article two days ago on Silver Doctor  about a German car manufacturer hoarding silver due to the shortages of it and the need for them to have it in manufacturing their vehicles.

Portion:

New signs of an extremely tight wholesale physical silver market have now emerged, as a first-hand account has revealed that one of the largest and most famous German automakers is hoarding massive amounts of physical silver inside one of the most secure vaults in Zurich, Switzerland.

Everyone needs to ask themselves.... "Am I going to take advantage of these prices right now or am I going to give up on metals?"

I really hope that everyone makes the right decision and understands what is happening with the prices are all based on paper trades and not real physical gold and silver.

With the demand coming out of China for physical gold, (which does not include India's or Russia's appetites for Gold right now) prices will have to break out in a violent fashion one day (in the near future?).  At some point the truth will have to be revealed.

Think about how in less than 2 years (by 2015) the demand in China is going to outstrip supply.  This does not include any other country's demand or countries demanding their gold back.

Chinese News Article: Crossborder Yuan Loans - "Before it becomes a Global RESERVE Currency."

Update -1/30/13 - IMF Confirms Yuan a Global Reserve Currency

It is the first time I am seeing the words from China that comes right out and says what the plans for the Yuan is.

The first batch of cross-border yuan loans agreements were signed on Monday after thecentral government approved the Qianhai area in Shenzhen to test a freer yuan before it becomes a global reserve currency.

 As the loans come from Hong Kong, the move is a test offurther capital accounts opening by allowing offshore funds tobe transferred to the mainland.

Previously, offshore yuan could flow back to the mainland onlythrough yuan-denominated trade and renminbi qualified foreigninstitutional investors.He added that the yuan is marching gradually and steadily toward becoming a global currency,and he expects more breakthroughs on that front this year.

They have never said "Global Reserve Currency" before.  They have said "Convertible currency" and other words.

China has actually imported more gold and silver than they admit to.  They imported an estimated 1000 tons of gold over the last few years but experts believe it was much more than that.   They have also been importing silver in major quantities that are not being revealed.  I read a story the other day about someone in China trying to buy silver and gold bullion but the place was nuts with crowds all trying to buy the gold and silver the dealer had just gotten.

Kingworld News has an article about China being a gold backed currency.

Jim Willie did an interview last week and he mentioned that China was going to take it slow and not be totally overt in becoming the Global currency because they don't want the U.S. to start a war for some made up reason against china.

Mining.com has the rumor China plans on importing 5000 to 6000 tons of gold this year (article from 2012). 

unconfirmed speculation" that China – the world's number one producer and second-placed consumer (at the moment) – is gearing up to buy up to at least 5,000 to 6,000 tonnes starting before the end of the year.

Silver is huge in China too.  There has been a lot of talk in the "silver world" saying there is a major shortage.  Besides the fact that the 2013 Eagles sales have been suspended due to over 5 million orders in the first few days of 2013.   The majority of silver mined is used for industrial purposes and it seems there is a shortage happening.

The writing is on the wall.  China plans on having a Gold backed Global Reserve Currency.  I have written about the agreements China has with other countries and has already began trading in Yuan instead of dollars.  The BRICS began those trades last year.  The only thing that is keeping the dollar as the "reserve currency" right now is because it is the "Petrol Dollar."   Saudi Arabia is the reason the dollar is still the oil trading currency.  Is it any wonder that Obama bows to the King of Saudi Arabia as the U.S. is obviously beholden to them otherwise it would not still be the official reserve currency of the world.

Once Saudi Arabia decides to go with the rest of the world and begins using other currencies for oil as India, Iran, Russia and China already do.... it will be game over for the dollar.

Obviously the day is getting closer since the article says "Global Reserve Currency" from China Daily.  Again they have never used those words before from what I have seen.  They have used "Global convertible currency."  Remember China purchased the London Metals exchange last year, which began using the Yuan and the CME began added the Yuan as a trading currency last year too 

China holds things very close to their chest in information and they don't put information out normally until deals are done.  So with them allowing "Global Reserve Currency" words out, what deals have been done already and how fast will it all go down and the dollar with it?

Some of my favorite metals sites are: David Morgan of Silver-Investor always has great information about Silver and what is really going on.   I go to Gata, Got Gold Report , and 24 hour Gold for the latest in gold information.

Few probably are aware of this, but long time subscribers to The Morgan Report (TMR) were notified that a meeting had taken place in South East Asia roughly a decade ago discussing -- you guessed it --A GOLD BACKED YUAN.

Most people in the West do not understand the Chinese mind set of looking out several generations, 

Edit to add:   I found another article today on the same Chinese News site - Their frustration with the dollar titled "The Unloved Dollar"

But the dollar's role as international anchor is beginning to falter, as emerging markets everywhere grow increasingly frustrated by the Fed's near-zero interest-rate policy, which has caused a flood of "hot" capital inflows from the United States. That, in turn, has fueled sharp exchange-rate appreciation and a loss of international competitiveness - unless the affected central banks intervene to buy dollars.

Wow - they have really put out information now as I have never seen before and the two articles being out on the same day...... says something is already happening, we just don't know the full extent yet.  But I have a feeling since they have come right out and said "Reserve Currency" and "Unloved Dollar" whatever the changes of Currency will happen this year.

Update - 1/29/13  - David Morgan of Silver Investor allowed me to interview him today about this subject, the silver shortage and Germany and their gold.

Hong Kong Gold Shipment in Oct From U.S. - FAKE GOLD! This is the Real Take Down SHTF event when it comes out!

Hong Kong Gold Shipment in Oct From U.S. - FAKE GOLD! This is the Real Take Down SHTF event when it comes out!

This is a must read article, this is a continuation of postings below, but much more information.

Seems the U.S. has sold Fake Gold and Hong Kong found their bars were fake in October, filled with Tungsten!

This article is by one of my favorite people who I follow and read his very intelligent and truth articles! Jim Willie - if you don't read his things, you really need to!

Link to article:

Zinc Dimes, Gold Tungsten and Lost Respect