Chase Bank is Preparing for Something Big

The largest bank in the U.S., JP Morgan Chase, has made two disturbing moves in recent weeks that should give many Americans significant cause for worry. It isn’t yet known what the reasons behind these moves are, but one thing is clear: the bank is preparing for something big.
The first move was when the bank issued an updated terms of service for its safety deposit box owners– the bank has now banned the holding of cash and gold coins in the boxes. This is just the latest move by the banking industry to ban the use of cash and convert to an all-digital currency. Earlier this year, the U.S. government issued a memo to major banks asking tellers to report any suspicious activity, which they classify as cash withdrawals and deposits totaling $5,000– or anything else that the teller believes to be suspicious. If you go to the bank and withdraw your own money, they will file a Suspicious Activity Report and your name goes on a list. In our current surveillance state, Uncle Sam wants to know everything about you, including where you spend your money and what you buy. The U.S. government and major banks are trying to outlaw the use of cash simply because cash is more difficult to track.
Which brings us to the other major move JP Morgan Chase has made in recent weeks. At the end of April, it became public that the bank has in all likelihood, cornered the silver market. In what is being considered a historic level of silver purchasing over the past few weeks, the bank has increased its reserves of physical silver by as much as 20%– bringing their official reserves to up to 55 million ounces. Silver analyst Ted Butler believes that the bank may have actually accumulated as much as 350 million ounces.
Whether the bank’s silver hoard is as high as 350 million ounces or not, one thing that’s clear is that the bank has dramatically ramped up its silver purchasing in the past few weeks. They are obviously preparing for something. But what? A stock market collapse? Bank of America’s Chief Investment Strategist Michael Hartnett issued a forecast this week that said that the stock market is in for a “scary summer” and suggested customers hedge their portfolios with gold.
Analysts have been warning for the past year that the markets are overinflated and due for a correction– some say as much as 60%. If that does happen, it will certainly drive the price of silver higher.
But Chase could also be getting ready for a decline in the dollar with the coming update to the SDR. The International Monetary Fund is planning to reconfigure their Special Drawing Rights reserve currency in October of this year. The SDR is actually a basket of currencies that include the dollar, the pound, the yen, and the euro. It is now becoming widely accepted that the IMF will likely decide to include the Chinese Renminbi as part of the SDR and some believe that they could even decide to peg a percentage of the SDR to gold.
China has been asked to make some concessions and be more open about their Central Bank transactions and currency reserves in advance of the Renminbi’s consideration for inclusion in the SDR. It is likely that the country will be asked to “float” the currency in order to let it settle into its true market value before it is allowed into the SDR. To do this, China would have to remove the Renminbi’s peg to the U.S. dollar and probably reveal their updated gold holdings as part of an effort to stabilize the currency.
But there is uncertainty over how much gold China has managed to accumulate in recent years. We do know that they have been buying massive amounts, but just how much they have managed to hoard will determine the size of the impact it will have on global markets.
The last time the country reported its gold holdings was in 2009. The mainstream financial news outlets put the low end of their current gold holdings at 6-9,000 tons. 6,000 tons would put China in second place behind the U.S.. 9,000 would put it in first. It would be a major move toward making the renminbi the new “world reserve currency” and would likely affect the stability of the dollar.
But some analysts have suggested that the country may have actually purchased as much as 25,000 tons of gold. If that were true, it could cause a major outflow from dollars to the renminbi. This could flood the market with dollars and send its value through the floor.
Whether it’s 9,000 tons or 25,000 tons, either number will make it clear that China now holds the most gold. This will only boost confidence in the renminbi and increase its use as a reserve currency. Will it inspire enough confidence to cause a sudden global currency shift? Unlikely. The U.S. is still China’s biggest customer and China is still the biggest holder of U.S. dollar-denominated debt. They want to keep the value of the dollar stable and make sure that we are still around to buy their goods. That way, they can keep buying up our real estate.
Whatever number China ends up revealing as its total gold holdings will have to be taken with a grain of salt. China obviously wields a degree of power with this reveal as any number will have an impact on the price of gold, and potentially the value of currencies around the world. Naturally, they are only going to divulge a number that best suits their interests, not their true holdings.
Plus, a sudden currency move would probably spark World War III. And that probably won’t happen. Unless that’s the reason JP Morgan Chase is hoarding so much silver. All wars are bankers’ wars. Bank of America is saying to buy gold and Chase is hoarding silver. What are you doing to protect yourself?

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