Jim Willie, uses the term the "Chinese Put" to describe the relentless buyer that has recently appeared in the Precious Metals (PM) market. Because of the magnitude and the brute force buying power of this purchaser, it could only logically be a sovereign nation and is most likely China.

However, until this deep pocketed buyer showed up, the Cartel had all their bases covered to manipulate gold prices downward and keep it down for almost infinitum. For every long contract of demand from free market buyers, the Cartel would simply add 2 contracts short and the demand was neutralized. Illegal, but effective.

The last twenty years has seen an odd couple relationship between the USA and China in that they provided us with plastic junk we didn't need, and in return we provided them with worthless paper. No inflation resulted from all this money printing in the USA because the goods were cheap enough to drive prices down and we were the reserve currency of the world. Meanwhile, China's booty was our manufacturing base, jobs, capital investment, technology and a build up of huge capital reserves.

It is this huge capital reserve that is now in jeopardy……The surface story is that China is the largest holder of US dollars and US Treasuries and since they have 2 Trillion of these dollars on hand, they must quickly diversify out of these assets. They need to convert their US paper assets into hard assets as quickly as possible before the dollar takes a major dive.

But looking a little deeper at this situation we see that China also has a fiat currency and for all the same reasons that the Cartel want to keep "real" money down, so should the Chinese. It is both parties interest to keep the dollar strong. Because both country's economic future depends on a strong dollar.

So, at best.... there is a balance of power because this is a Mexican stand off and a tolerable situation as long as China holds as many US dollars as they do........ But what if China has a way out of this monster dollar position? What if China starts buying the one asset that will soar with a dollar collapse? What if China is able to get this asset subsidized by the USA?

Well of course this asset I am referring to is precious metals. So this explains that JPMorgan and company are throwing down short contracts for hundreds of millions of ounces of silver/gold..... and no matter what quantity of shorts are bought, China continues to accumulate.

Why does China continue to accumulate? Because they are taking the economic advantage by buying the one asset that is anti-dollar in a dollar bear environment and they are actually getting this asset subsidized by the USA. Another words, as the west does everything to push down the price of gold the Chinese are buying it up with both hands and saying thank you very much….. They are killing us with our own sword !!!

We are providing for them an exit door out of their huge dollar position and doing it at our expense. This rocks the balance of power and makes our partnership null and void.

At some point the US will have to cry Uncle.... no mas....... because the result will be that the west will have a worthless currency and no gold and the east will have a strong currency with all the gold. Are our leaders so narrow minded that they do not see that precious metal suppression is helping our enemy more than any one else ????

So ironically, the very antithesis of free markets - the Chinese Government - is now our biggest ally and the only one that could effectively knock out the gold cartel. Also ironically, the single most influential factor that will govern the gold market in the next year is China. China will decide when and how much gold goes up when the suppression stops. If the suppression is allowed to go on too long, then the USA will fall into the economic abyss – broke and helpless.

Remember there is still an absolutely incredible amount of short positions that must be unwound……. So an explosive rise in the metals would most likely result from this phenomenon.