Yuan Devaluation – Is this a Turning Point for Gold and Silver?

Yuan Devaluation –  Is this a Turning Point for Gold and Silver?

Welcome to Illuminati Silver, we tell you
the truth about silver. Today is Monday 17th August 2015 and we are
going to address the recent devaluation of the Yuan and its impact on gold and silver
prices. There are many aspects to cover, so this video is a little longer than usual.
Firstly, we wish to apologise to our listeners for our delayed response. You see, it would
have been very easy to have given a knee jerk reaction to the PBoC devaluation of the Yuan,
which many of the pumpers did, literally within hours of the devaluation announcement. But
we wish our channel to be viewed and valued as one that gives carefully considered and
deeply researched views and opinions. We have spent many hours since the middle
of last week speaking to Bankers, Currency Traders, and Economists and read many differing
views on what is actually happening; as although we did expect a potential Yuan devaluation
we only envisaged it occurring after the September Federal Reserve Banks announcement on interest
rates. This is the current situation and its immediate
history. Last week saw multiple devaluations of the
Yuan against the US Dollar which resulted in a decline of about 3%. Although in global
currency terms this is not huge, it was the largest depreciation of the Yuan for 20 years.
In 2005 China reformed its currency system by unpegging the Yuan from a strict tie with
the dollar, in favour of a looser tracking policy.
This last year in particular has seen the US Dollar rise significantly, not least because
it has been seen as a ‘safer currency haven’ than others, and also because of the ‘market
belief’ in an imminent rise in interest rates, which has caused the Yuan’s value
to rise also. This has meant that China’s goods were becoming increasingly expensive,
especially when compared to its regional rivals South Korea, Japan and not forgetting Indonesia,
hitting exports quite considerably. For example, there was a drop in car sales of 6.6% in July,
and data at the weekend showing an 8% fall in over-all exports and slowing business growth.
Further, a survey tracking China’s factory output for July also missed expectations by
0.6% for the year. One can therefore understand the Central Bank’s/Government’s
concern over this worrying economic trend. In addition to this, and arguably just as
important, China has also been seeking to build on its 2005 reforms in an effort to
have the Yuan included in the IMF basket of Special Drawing Rights Reserve Currencies
or SDR. According to Reuters “The PBOC said it would
now calculate the daily yuan fix, by taking more notice of market forces, including the
closing price in the previous day’s trading session.
The devaluation sparked fears of a global “currency war” and accusations that Beijing
was unfairly supporting its exporters, but the central bank on Wednesday sought to reassure
financial markets that it was not embarking on a steady depreciation.”
The Bank’s move to include more information when setting its daily currency fix can be
seen as a relaxation of controls, moving the currency a step closer to satisfying the IMF’s
entry requirements. With Oil Prices falling again below $50 and
the prices of industrial and construction metals such as nickel, copper and aluminium
falling to 6 year lows, and a potential glut appearing on the World’s markets, the greatest
fear arising now is that of further deflationary pressures, thereby causing further downward
pressure on prices and delays by Industry to invest and expand in a ‘falling price’
environment. Now for you our listeners and us, the key
question on our lips is ‘what will this do for the price of gold and silver?
Well, the initial reaction to the devaluation was for Gold prices to rise, with silver following.
Matthew Turner who works in London at Australia’s Macquarie Investment Bank told Bloomberg:
“When Central Bankers lose control, as the PBoC appeared to do this week, gold tends
to do well.” New York Analyst Dane Davis of Barclays Bank said “Gold rose because
some investors initially thought the US Fed would delay its interest rate increase after
China devalued. But that seems to have passed.” We have seen in the past few days gold premiums
ease from $6.50 oz to its normal $2.50 oz. So we are all aware of the current situation
but what about the weeks and months ahead. Well, its true to say, that the FED will have
to look closely at its interest rate policy again, in light of the Yuan devaluation. Any
delay in raising rates, is likely to lead to a higher gold and silver price, as rates
were expected by 70% of the Financial Community to rise next month.
The devaluation of the Yuan may result in China purchasing more gold as a safe haven,
though one could argue that its Stock market should see a small rise due to potentially
increased exports. However, that said, although the PBoC bought 19.3 tonnes for its bullion
reserves during July; Carsten Fritsch, commodity analyst at Germany’s Commerzbank said “but
the monthly volume of 19 tonnes is maybe less than some would have expected”.
The most immediate factor that could affect the price this week is likely to be the releasing
of the FOMC minutes from last month’s meeting on Wednesday and also the Consumer price Index
also due the same day. So we are faced with an interesting balancing
act – will the price of precious metals fall further because of deflation (and especially
silver because of a potential lack of Industrial demand) or will their price rise because of
the fear of a currency war? As Barclays Bank pointed out this morning “that China’s
move last week to devalue its currency was bearish for gold as a commodity but bullish
for gold as a currency.” Citi Bank Research Dept. on the other hand believes that the
US dollar index will top 104 compared to the current 96 thereby undermining the price of
gold further. Our view is that gold will operate for the
next couple of weeks within a very narrow band, while the markets attempt to assess
the ramifications of China’s recent activities. It is true to say that September’s Interest
rate hike odds have now fallen from 60/40 in favour to around 40/60. Our view, is that
short-term at least, we now have a floor of around $1100 for Gold and $15 for silver while
the markets digest and analyse the situation. We are still concerned about deflation being
the more powerful factor which we feel could still undermine all commodity prices. The
key question though is whether Jim Rickards is right in his book “The death of money”
whereby other currencies follow suit and devalue further in retaliation. If that happens the
Gold in other currencies will rise in value, and in dollar terms will do so should the
Fed then delay interest rate rises, and even consider allowing the dollar to fall further.
The next few weeks will give us all a clearer directional trend.
We shall keep you updated as events unfold. We hope you like this video and found the
information beneficial. If so, please give it a thumb up, comment and if you haven’t
already done so, please subscribe. Also it would be helpful if you could share this on
twitter and follow us @illuminatisilv1 and become a friend on our Facebook Page – illuminati
silver. Disclaimer:
Silver Illuminati owners come from a background of Banking, International Wealth Management
and Economics. Having now retired from these worlds we are not qualified to give investment
advice. Therefore, this and other productions must not be deemed to be giving such advice
and merely represent the personal views of its owners.


  1. not that it matters, but that is a Taiwan (Chiang Kai-Shek) coin.  A panda coin would have been  more to the point 🙂

  2. if only i could give constructive information like yourselves… my view on the matter is otherwise irrelevant… i don't know whats going to happen but…. i ll stick to my predictions. once again….. thank you for the video.

  3. Good question,I'm still not sure ,I also think India is in there somewhere we will see thanks as always . I was waiting for some of the usual commenters view interesting times and then some . Thanks SI for the thoughtful vid………..watching

  4. This is a good interpretation of the data, so screw SGM, but I have doubts with this interpretation. but still a good listen I just don't buying into gold & silver helping Americans or doing much after the alleged collapse .I don't see stacking being viable.option for american stackers Yes, I agree deflation will kill gold & silver as it has been doing, & QE doesn't help Gold's cause. in fact it killed gold & we have 5 years of evidence the whole fed QE didn't cause massive US inflation or Hyper inflation. I am not sure about Fed's over night Fed Fund Rate hike going down this 9/2015 but if they make a move it's very small only 25 bases points which is nothing.I had read some blogs well known commentators from main stream talking it would take like 5 years just to reach 4/5 % fed rate hikes nothing like what we saw during the 80's rate hikes. but we did see gold & silver collapse during the american 80's rates went up PM's crashed plus we were in recession less demand but yes, I agree china wasn't even on the map at the time. I just don't see any of this playing out well.
    globalization made things more difficult to plot out market forces. A nation can devalue all she wants if those people she wants to sell to don't have money forget it. China's actions long term won't help, at some point china is going to implode

  5. Illuminati Silver , can you please tell me if your brothers will kill the Dollar eventually and start a new currency backed buy gold or some type of electronic currency?
    And if so, how long will be this gradual devaluation?

    Also, should we wait and exchange our precious metals with the new currency? or would we have another sell out again once precious metals reach a certain price ( near $50 )?

    thank you

  6. I am a silver stacker, and I actually do not want the price to go up…well maybe in a decade or so.  Back in 2011 when silver was $40 something, I was not buying, and that was no fun….I can't complain with $15 silver, I'm lovin it.

  7. Illuminati Silver,
    should I prepare for World War 3? underground bunker?

    or should I prepare for an economic collapse only?

    thank you.

  8. Illuminati Silver, it really baffles me ,why are you helping a nun brother?
    I know your brothers control the world, why should we trust you?
    why the change of heart?

  9. Thank you again for the assessment, what has been disclosed has been accurate and honest, with any speculation left to the individual in my opinion.

  10. Thanks for the update Illuminati. Your patience is appreciated, too many like to jump the gun on calling how things are going to play out.

  11. We see David Morgan calling a bottom (again) in silver prices yesterday and yet we see silver prices falling today….what a pillock!

    How many times does this man have to get it wrong before people stop buying his books?

    Maybe I should start predictions got to get it right sometime.

  12. Great video as always… hope all is well with you and your families… thanks for all you do… Pete in Montana..

  13. I find the comments section just as valuable as the actual video. Good on all of you for proper dialogue and fair assessments of the current information we have. Thank you Silver Illuminati for taking the time to respond to people's questions to keep the dialogue going. What a great channel.

  14. It took over 20 years, for gold to rise to its $1900 high, a few years ago. Since then, it has been plummeting , and the trend indicates lower lows . The jewish /shemitah/ jubille doesn't come to a end until sept-2016. IMHO, gold will still come lower in price in the next 6-12 months.  We are in a deflationary period .  I see $1000 gold in the near future.

  15. China now does not care about the dollar bubble popping and will not buy treasuries this time around but will actually sell them.

  16. +Illuminati Silver You stated in a reply to Psycode Woodog; "China likely to implode economically themselves." Just what are you basing this statement on? Are you defining this in terms of the western economic system and the philosophy of neo-classical economics? If your point of view is from this one narrow view, I am certain, China, as a whole, and holistically will not "implode". However, if you are directing this statement to investors in paper markets, such as 'Wall Street' etc., then it is quite possible that your assertion may hold some weight from that point of view, as narrow as it is. In as far as the western capitol market system point of reference in your claim, it is obvious you are not giving any consideration to the BRICS economic factors. As you are using the name; 'Silver Illuminati', perhaps you should bring something into the light of day here. Just who comprises this World Gold Council? Hmmm? Try revealing that.
    I certainly am no 'pumper' as I have no, zero, connection with anything to do with the selling of Gld/Slv, in physical or paper.
    I am a truth seeker, an earnest one. Truth cares not of anyone's opinion. I have no ulterior motive outside of bringing the truth into the light of day when it is so often being muddied, distorted or hidden. I am witnessing very manipulative and sophisticated (to some) distortions, whether intentional or just some not knowing that they really don't know.
    Anyone using an iota of common sense must come to a realization of what true value is. What is essential knowledge. What principles of truth may be employed in discovering truth. Know how FRN's come into existence in the first place. How the current monetary system actually works and who brought this system into its current form. Debt is never an asset. What does a FRN represent? Debt.
    So, I would like to ask you this; If you were seeking to transfer any of your wealth to future generations, in what form would that be? If you were seeking the last line of defense, an ultimate insurance policy to protect your wealth, in what form would that be? For those that do not have the capability to store food/grain, oil, or own a multinational manufacturing corp. that produces market needs for example, what, exactly would you suggest they have in their possession that is a store of value in the base of the material? Are you prepared to illuminate all on these valid questions, and bring your own truth into the light of day? I would like to head off your deflection here and now, by stating I seek no advise from you, only your 'illuminated' answers to just a few general questions as to how 'Silver Illuminati' would address this.
    We shall see just how specific or non specific you will be. Or perhaps you too have a particular agenda to propagate which goes beyond any claim of helping the 'newbies' to be wary of these "pumpers"?

  17. So does this mean Texas will receive their Gold soon?  I mean, Gold is so cheap, it makes no since to hold it…By the way, what happen to the dollar collapse?  Bloody pumpers win again…

  18. price of gold vs currencies from producer countries:

  19. Thanks a Luminati for another great video however I have to say I read all the responses and I am new at this and I'm getting the feeling the gold and silver it's just a worthless metal or at best it takes a third of your lifetime to make any money on it please find me a metal I can make some cash with I heard Donald Trump has 300 million dollars in a quote safe bank account does he have any gold or silver thanks again you been my best source for education

  20. So basically you have no clue whats going on like everyone else haha. Its like we are treading into new waters its almost scary to invest in anything right now.

  21. some nice upswings this week in metals. is it a dead cat bounce ?  If we can hold at current prices for the next few weeks, ill be surprised.  Im expecting another downtrend in metals before years end.

  22. When the stock marketing start melt down, but Gold start rally from last week too. My question will be " Gold already become safe heaven" or Gold will expect a huge drop like 2008 before it goto a long term bull market?

  23. If you read this, You better pay attention. This AVATAR Illuminati Silver is to be The genuine article. If you found  this channel, perhaps divine intervention sent you here. Do not take what (THEY) say for granted.  They are the real deal. And they are telling you what happens before it happens. Its to late for prepping, Prep time is over. Its all over……….
    Yes your children will go to the light, But what about you? Ignorant, Arrogant,  and putting them in harms way, bringing them to this unstable world, Or what about your own vanity and self indulgence?  Are you questioning yet?

  24. thank you i have finally set up an account so i can hit the like button. could you please check out and put dr geger from nutrition facts .org into your shout out hat. i do not have any interests in his site i only wish to repay your quality information you have given me.  No point being wealthy if you are not healthy. Kindest regards Lisa.

  25. Have you heard of bitgold? check it out, use it as a debt card or redeem for physical. Your account rises and falls with the price of gold. Heres the link- https://bitgold.com/r/nE9FT1

  26. it all about 1st controlling printing of money of the whole world. 2nd converting all agricultural land into private land 3rd devaluation money into just paper no value. if you still dont understand the last commodity they want to control is food water and air then thats it. end of evrything.

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