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Old 02-04-2019, 11:50 AM   #501
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You would think with all that buying, the gold price might have risen significantly in 2018...
didnt do bad in £sterling terms-

£ 950 - £1007 on the year and well up from the October low of £904
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Old 02-06-2019, 07:18 AM   #502
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So Venezuela's experiment with the supposedly oil backed "petro" is still nascent:
Quote :
...
Venezuela is notably one of the only nations to have launched a national cryptocurrency, and U.S. President Donald Trump ordered sanctions against the petro in March 2018, soon after it launched.

Nicolas Maduro, the nation’s president, has since made a number of efforts aimed to force the adoption of the oil-backed petro, both at home and abroad.

Back in December, Maduro said that the nation would move to sidestep the U.S. dollar and use petros for oil sales starting this year, soon after adding plans to appeal to OPEC for the token to become the “digital currency for oil.”

The country has also reportedly begun converting pension and salaries into petro from its fiat currency, the sovereign bolivar. Venezuela started selling petro to citizens last October via a government portal. Further, banks have been ordered to use the token, as have some businesses.
https://www.coindesk.com/venezuelas-...nder-new-rules

Now comes news that Iran is supposedly rolling out a gold backed crypto:
Quote :
Four banks in the Islamic Republic of Iran have developed a gold-backed cryptocurrency called PayMon, financial news website Financial Tribune reported on Jan. 30.

According to the article, the crypto asset has been developed in cooperation with the Parsian Bank, the Bank Pasargad, Bank Melli Iran and Bank Mellat. Iran Fara Bourse, an over-the-counter (OTC) cryptocurrency exchange, will reportedly list the new cryptocurrency.

The director of Kuknos, the blockchain company taking care of the technical aspects, said that the new crypto asset is a way to tokenize assets and excess properties of the banks. A billion PayMon tokens will be initially released, according to the article.

As Cointelegraph recently reported, Iran is allegedly negotiating with Switzerland, South Africa, France, the United Kingdom, Russia, Austria, Germany and Bosnia to carry out financial transactions in cryptocurrency.
...
https://cointelegraph.com/news/four-...cryptocurrency
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Old 02-07-2019, 07:24 AM   #503
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Today at 830am the Treasury Borrowing Advisory Committee (aka the TBAC ...) "released minutes of its Jan. 29 meeting held at the Hay-Adams Hotel in conjunction with the U.S. government’s quarterly refunding announcement.
...
... the most interesting part of the TBAC minutes was the discussion of the "unique challenges" faced by the Treasury over the medium term, especially the possibility of significant financing gap over next 10 years amounting to over $12 trillion and the potential need for more domestic investor participation if foreign reserve growth slows.

Specifically, the TBAC cautioned that the Treasury’s financing needs are expected to increase significantly even without factoring in recession possibilities over the next decade. Here, the TBAC warns that deficits to the tune of $1-$1.5trn a year, and cumulatively over $12trn, over the next decade, are coming and will have to be funded in the bond market. Meanwhile, as noted recently, the CBO stubbornly refuses to forecast a recession in the next decade, instead projecting a steady 1.5-2% real GDP growth over the next 10y. While the TBAC did not take a position on this laughable assumption, it warned that deficits typically rise 2-5% of GDP in recessions, which would translate to additional deficits of $0.5-1trn at current GDP levels, and warns that "these borrowing needs have to financed in the context of already high global dollar debt exposure."

But the bigger problem is that in the context of soaring deficit funding needs, the TBAC is worried that "foreign investors already hold significant dollar debt" which is why the US will have to increasingly rely on domestic savings to fund its future budget deficits.

The TBAC notes, tongue in cheek, that while the "USD is still the dominant reserve currency", reserve managers have been very gradually increasing allocation to other currencies, and that the USD share of FX reserves has steadily come down from 72% in 2000 to 62% now. It also pointed out that other countries with significant debt issuance needs (as a share of GDP) depend far more on domestic savings. As a result, "the Treasury should plan to meet financing needs more domestically than in the recent past."

Even more concerning, the TBAC notes, is that global FX reserves growth has stalled and global trade, as a share of world GDP, appears to have peaked, while underscoring what may be the most important transition in the global economy in decades, namely that China is now running a flat current account with the rest of the world, ...

As a result of these transformations, there has been an even lower official foreign demand for USTs, ...
...
While there are no definitive answer to the very concerning questions brought up by the TBAC, keep a close eye on future TBAC presentations and especially any future reference by this all-important committee made up of the most important banks and hedge funds in the US...

... which appears to be increasingly concerned not only about how the US will fund its exploding debt deficits but also about the reserve currency status of the US Dollar.
https://www.zerohedge.com/news/2019-...reserve-status
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Old 02-07-2019, 07:32 AM   #504
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Quote :
...
Conclusion:
So, the Fed isn't buying and has in fact rolled off a massive quantity of mid duration US debt, foreigners aren't buying, banks aren't buying, insurers aren't buying, American's aren't buying savings bonds, state nor local governments are buying, and there is little to no spread to compensate any leveraged "investors" to buy mid to longer duration US debt. Yet the Treasury tells us that "other investors" (suddenly became hyper-interested just as QE ended) and have come up with over $3 trillion in cash since 2015 to buy low yielding US debt like never before?!? And this massive shift in buying into Treasury's has inexplicably had little to no negative impact on other asset classes (stocks, real estate, commodities)???


Is there any party (aside from central banks or central bank conduits) that could come up with such gargantuan quantities of dollars to yield so little and do it essentially without leverage??? Tell me again, who buys US Treasury's...and particularly who buys mid and longer duration US debt (responsible for setting the 30yr mortgage rate)??? Otherwise, this may sadly be the smoking gun of an active, accelerating, and perhaps unraveling Ponzi scheme?
More (details): https://econimica.blogspot.com/2019/...y-buys-us.html
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Old 02-12-2019, 07:39 AM   #505
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Looks like the concerns raised by the TBAC are getting serious attention:
Quote :
...
When Jerome Powell and the president sat down for dinner at the White House in early February one wonders what was on the agenda. Treasury Secretary Steven Mnuchin, who also attended the dinner along with Fed vice-chair Richard Clarida, joked that having the Fed chairman over to dinner was “somewhat of a covert operation … so it didn’t create speculation.” The Fed press statement that followed went to great lengths to assure Wall Street and the rest of the world that nothing of consequence happened. Individuals at this level of government, though, do not have hastily-called, high-profile meetings at the White House simply to socialize and attend to their friendship.

The rhinoceros in the room could very well have been how the federal government will go about financing the $12 trillion in debt Goldman’s Beth Hammack earlier brought to the Treasury Secretary’s attention and what role the Federal Reserve intends to play in the process. China and Japan, America’s two largest financiers by far, have withdrawn from the market and there is no certainty as to when they might return. That leaves domestic U.S. private investors and financial institutions to fill the yawning gap and, failing that, the Federal Reserve with a new round of quantitative easing.

How the $12 trillion debt bombshell is handled will carry very large implications for the stock and bond markets, the value of the dollar and consequently the price of gold. Some would say we are a long way from another round of quantitative easing, but we will remind our readers it was only a few months ago that we were assured of at least two additional rate hikes in 2019 and stepped-up quantitative tightening. Circumstances and response, as we have seen over the past few weeks, can change in a heartbeat. Ominously, San Francisco Federal Reserve president Mary Daly told reporters last week that the Fed is considering quantitative easing as a permanent option in the monetary toolkit and not, as Bloomberg put it, “just as a last-ditch measure to deploy in emergencies.” (Please see Balance Sheet Could Be in Regular Fed Toolkit/Bloomberg/2-8-2019)
...
http://www.usagold.com/cpmforum/nv1001-feb19/
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Old 02-12-2019, 09:22 AM   #506
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Gold did well in QE1 and QE2 but fell back hard during QE3

Why should I get excited about QE4 ?
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Old 02-13-2019, 07:16 AM   #507
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So, the NY Fed has a blog ...
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...
In sum, the period since the global financial crisis has not seen a widespread change in the international monetary architecture. While the dollar’s international status may have declined in some pockets, overall it remains dominant. Nevertheless, recent trends bear watching as history suggests that a currency’s dominant status is not immutable.
https://libertystreeteconomics.newyo...ngs-stand.html

It didn't use to be cool to talk about this issue in public.
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Old 02-13-2019, 07:23 AM   #508
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Venezuela hopes to create a trade bloc consisting of China, India and Russia to help the South American country settle oil payments in currencies other than the dollar, its oil minister said on Tuesday.
...
https://www.reuters.com/article/us-i...-idUSKCN1Q11GF

Is this significant? I suppose it depends upon how long Maduro and the new guy struggle for control of the country. If Maduro somehow maintains a grip on the country for the long term, then this could eventually develop into something (assuming that the country doesn't devolve into chaos and they keep producing/shipping oil). I just have the feeling that Maduro isn't going to last and the new guy will reverse course after the USA lifts sanctions.
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Old 02-13-2019, 10:16 AM   #509
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Originally Posted by rblong2us View Post:
would be ........... will be........... they hope others will join ........

stone cold reality ?
I happened upon this press release from the UK:

https://www.gov.uk/government/news/j...rade-with-iran

Seems like they (both Europe and Iran) still have a lot of work to do in actually building the INSTEX platform.
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Old 02-15-2019, 07:23 AM   #510
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I think this is an ominous sign. In the fallout of the 2007/2008 crisis, there was all kinds of talk amongst the Davos/G20 crowd about different ideas/plans for a NWO monetary system. That talk seems to have faded away as ZIRP (and, in some places, NIRP) seemed to stabilize the system.

Today, we have credit bubbles/stresses growing everywhere - zombie firms/junk bonds, consumer credit debt, headwinds for future treasury issuances, etc. The main global financial institutions (BIS, IMF, Fed, etc.) have all published warnings about the lack of powder to manage the next financial crisis. Still, we don't see chatter about any NWO monetary systems. Has the issue been decided? Or is the world too polarized now with all the nationalist political movements?

In any event, I woke today to find two items published by pillars of the financial establishment promoting gold to weather the next crisis. First, Rogoff wrote a piece for the World Gold Council. And the following was published in The Economist:
Quote :
...
Now imagine the world economy goes into a tailspin. There is panic selling of risky assets. Where should you seek safety? Cash is the most liquid asset; but which kind? The dollar is a natural focal point. Yet America’s fiscal indiscipline and its sizeable current-account deficit might give pause. Other currencies have their faults, too. There is one other destination you might consider, if only because others are starting to think the same way. And that is gold.
...
https://www.economist.com/finance-an...-case-for-gold

Maybe I missed something, but it really seems like they are getting the word out - the next crisis will be unmanaged, protect yourself with gold. It's going to be a bumpy ride.
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Old 02-19-2019, 07:18 AM   #511
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Damn, FT... That's harsh...

Quote :
While many investors are fretting over what stage of the business cycle we are in, the global monetary system is collapsing — with a whimper initially, but ultimately a bang. ...
...
... Central bankers have bought growth by sacrificing financial stability.
...
The other side of low growth in world foreign reserves is the low growth in the money supply of exchange-rate targeting regimes. These problems are particularly acute in China, with broad money growth at its lowest in the post-Mao era. The country’s debt-to-GDP ratio is rising at probably the fastest rate ever for a big economy in peacetime. This is the economy that we are told is de-gearing and reflating! It is not, and the burden of the economic adjustment enforced by the end of the growth in its foreign exchange reserves, and hence money supply, will probably be deflationary and will involve debt default. China will probably move to a flexible exchange rate, thus creating the freedom to grow and inflate away these debts. It is that exchange-rate adjustment that will destroy the current global monetary system.

The key consequence of this collapse will be the destruction of the euro. ...

In the financial, political and social maelstrom of a eurozone dissolution, investors should not expect property rights to be respected. The UK, where democracy and the rule of law will remain largely unchallenged, will become an attractive safe-haven investment for European investors facing increasingly authoritarian regimes and property sequestration on the mainland. Monetary collapses bring social and political ruptures and we now face two such collapses. It would be naive for any investor to assume that “government of the people, by the people, for the people” will survive such ruptures. The risks remain highest in Europe.
https://www.ft.com/content/271f4a2e-...4-d150b3105d21
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Old 04-01-2019, 08:25 AM   #512
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Quote :
The dollar’s share of global central-bank reserves slumped to the lowest level since 2013 while holdings of the Chinese yuan rose for the fifth quarter in the past six, IMF data showed Friday.

The U.S. currency accounted for 61.7% of global allocated foreign-exchange reserves in the fourth quarter, down from 61.9% and the tenth decline in the past 12 quarters according to the IMF's Currency Composition of Official Foreign Exchange Reserves (COFER) for Q4 2018 report. The drop occurred despite a 1% jump in the value of the dollar in the fourth quarter. The euro, yen and yuan each gained as a share of allocated reserves. While modest at just 1.9%, reserve allocation to the Chinese Yuan has been increasing rapidly and is now almost double where it was two years ago.
...
https://www.zerohedge.com/news/2019-...ar-q4-buy-yuan
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Old 04-05-2019, 07:09 AM   #513
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I guess MBS has a death wish...
Quote :
Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.

They said the option had been discussed internally by senior Saudi energy officials in recent months. Two of the sources said the plan had been discussed with OPEC members and one source briefed on Saudi oil policy said Riyadh had also communicated the threat to senior U.S. energy officials.

The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign of the kingdom’s annoyance about potential U.S. legal challenges to OPEC.

In the unlikely event Riyadh were to ditch the dollar, it would undermine the its status as the world’s main reserve currency, reduce Washington’s clout in global trade and weaken its ability to enforce sanctions on nation states.

“The Saudis know they have the dollar as the nuclear option,” one of the sources familiar with the matter said.
...
https://www.reuters.com/article/us-s...-idUSKCN1RH008
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Old 04-09-2019, 07:32 AM   #514
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oh no we didnt (-;

https://www.zerohedge.com/news/2019-...on-petrodollar
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Old 04-09-2019, 07:36 AM   #515
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so SDR / one world currency gets another airing ?

https://www.zerohedge.com/news/2019-...world-currency
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Old 04-09-2019, 08:13 AM   #516
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Originally Posted by rblong2us View Post:
so SDR / one world currency gets another airing ?
...
...
And in the master's chambers
They gathered for the feast
They stab it with their steely knives
But they just can't kill the beast.
...

So the idea isn't dead, it just sat on the back burner until we caught back up to the proverbial (kicked) can.
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Old 05-06-2019, 07:04 AM   #517
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As if to mark one year since President Trump formally withdrew from the JCPOA - better known as the "Iran Deal" - last May, the foreign ministers of the UK, France and Germany, as well as EU foreign policy head Federica Mogherini, on Saturday issued a statement condemning the White House's decision, and vowing once again to abide by the terms of the deal.

The statement is the latest sign that Trump's decision to reimpose sanctions on Iranian oil exports could set up the US for a showdown with its allies in Europe that could accelerate the de-dollarization of the global financial system, as Europe continues to work on an alternative payments system to the Treasury-dominated SWIFT network.
...
https://www.zerohedge.com/news/2019-...export-waivers
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Old 05-07-2019, 08:52 AM   #518
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So you might recall that back in November the USA issued 180 day waivers/exemptions to some countries to continue trading for oil with Iran. The 180 days ends this month and the USA is not renewing them. Might explain the USA's movement of military assets to the region...

Quote :
The White House said waivers for China, India, Japan, South Korea and Turkey would expire in May, after which they could face US sanctions themselves.

This decision is intended to bring Iran's oil exports to zero, denying the government its main source of revenue.
...
https://www.bbc.co.uk/news/world-middle-east-48011496

Quote :
May 6 (UPI) -- The USS Abraham Lincoln Carrier Strike Group and a bomber task force are being deployed to the Middle East in response to threats to U.S. troops by Iran or their allies, American government officials said.

The United States is responding to "a number of troubling and escalatory indications and warnings," White House national security adviser John Bolton said. He didn't provide details but said the United States wants to send a "clear, unmistakable" message to Iran that "unrelenting force" would meet any attacks against U.S. troops or allies.
...
https://www.upi.com/Top_News/World-N...8281557138911/

Quote :
The standoff between the Trump administration and Iran is escalating, and Europe is caught in the middle. The U.S. is exerting pressure through renewed economic sanctions, and hardliners in Tehran are issuing fiery threats of retaliation.

Brussels and national governments in the U.K., France and Germany, meanwhile, have been criticized by both sides for promising to preserve trade with Iran while also treading softly with the Americans to avoid a full-blown diplomatic crisis. Europeans “speak eloquently,” Iran’s foreign minister Mohammad Javad Zarif said in February. “They also need to walk the walk.”

But it would be wrong to dismiss Europe’s efforts as hopeless.

A big source of contention for both Washington and Tehran is Instex, a special-purpose vehicle unveiled by Paris, Berlin and London in January. Its ultimate ambitions are bold: to keep trade between Iran and Europe going without relying on cross-border financial transactions (which might fall foul of the U.S.). While not explicitly a sanctions-busting vehicle, it was clearly designed with President Trump in mind. It was his re-imposition of the U.S. trade ban that led to Iranian banks being cut off from the SWIFT banking network, and to international businesses scrapping their investment plans in the Islamic Republic.

By using Instex like a central clearing house, the idea would be that buyers and sellers in Iran and Europe could get their money without making transfers into and out of the Middle East country. It’s a complicated system, but in a very simplified form you could imagine having a European trader who wants to buy gas from an Iranian supplier and a European manufacturer who wants to sell aircraft parts to an Iranian company. Instead of the trader paying the Iranians for the gas, they would transfer the money to their fellow European manufacturer (in lieu of payment from its Iranian customer). At the same time, the Iranian aircraft company would pay its compatriot gas supplier for the supplies sent to Europe. Hence no cross-border money flows.

To be clear, Instex right now only wants to deal in humanitarian essentials — medicine and food, for example — but Europe has said it wants to expand the facility in the long term. Combined with new “blocking regulations” that make it an offense for EU businesses to comply with U.S. extraterritorial sanctions, there’s a loud message here that Europe’s leaders want to go their own way.

Criticism has focused on the everyday practicality of using Instex beyond those humanitarian aims, plus the wisdom of Europe resisting its key NATO ally, whose dominant currency affords it huge extraterritorial reach when waging economic war. For the Trump administration, the special purpose vehicle is a misguided attempt to “break” American sanctions and offer cover to the Islamic Republic. For Iran, it’s a paper tiger. Zarif says Europe has dragged its feet and is clearly reluctant to launch the system.

Neither complaint is entirely fair. Instex is obviously a work in progress, a sketch on paper more than a reality. But for London, Paris and Berlin, whose unity tends to crumble under U.S. pressure, a public commitment to this vehicle is a kind of success in itself. And it is being taken seriously by parts of the American establishment, who are aware of any risks — however distant — to the dollar’s dominance. “The plumbing is being built and tested to work around the United States,” former Treasury Secretary Jack Lew warned in February. “There will increasingly be alternatives that will chip away at the centrality of the United States.”
...
https://www.bloomberg.com/opinion/ar...em-with-instex
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Old 05-10-2019, 06:01 AM   #519
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Quote :
We, the High Representative of the European Union and the Foreign Ministers of France, Germany and the United Kingdom, take note with regret and concern of the decision by the United States not to extend waivers with regards to trade in oil with Iran. We also note with concern the decision by the United States not to fully renew waivers for nuclear non-proliferation projects in the framework of the JCPoA (Joint Comprehensive Plan of Action).
...
The remaining participants to the JCPoA are committed to working on the preservation and maintenance of financial channels and exports for Iran, together with third countries interested in supporting the JCPoA. We are determined to pursue efforts, together with other European partners, to enable the continuation of legitimate trade with Iran, including through the operationalisation of the special purpose vehicle "INSTEX". In this regard, the shareholders are committed to significantly increasing their financial contributions to INSTEX’s operational budget. We encourage all countries, including Russia and China as JCPOA participants, to make their best efforts to pursue the legitimate trade that the agreement allows for, through concrete steps.

We recall the European Council conclusions adopted on 4 February 2019 and EU’s support for the development of EU-Iran relations in areas of common interest. Complementary to preserving the JCPoA, we support a comprehensive approach with Iran with a view to addressing all issues of concern, including its contribution to regional instability and its missile activities.
https://eeas.europa.eu/headquarters/...germany-and_en

Whoa.
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Old 05-13-2019, 08:27 AM   #520
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So Trump's tariff war with China is supposed to be a hard nosed negotiating tactic. Some pundits claim it's just the next step in an inevitable crisis escalation which will eventually lead to a shooting war. I don't know if the latter is inevitable, but the stakes appear to be rising...

Quote :
... The Global Times reports that Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically. ...
https://www.forexlive.com/news/!/chi...une-1-20190513

Direct link: https://twitter.com/HuXijin_GT/statu...09254134767616
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