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Guest Post: What The Heck Is Going On With China

Tyler Durden's picture





 

Submitted by Doug Hornig, Casey's Gold & Resource Report

That’s a question that Westerners have been asking for, oh, several millennia now. Or at least since Marco Polo aimed his ponies down the old Silk Road in 1271.

Now as then, China keeps its own counsel. We know what they want us to know, plus what we can surmise from rumor and reading between the lines. But lately, we’ve been able to add presumption to news and come up with something that looks very significant.

Specifically, there’s been a flood of tantalizing stories out of the East that, taken together, strongly suggest a growing preoccupation with a form of money that was ancient even in Signor Polo’s time. And it ain’t silk. It’s gold.

We already learned, back in April, that China has been salting away bullion for the previous six years, out of sight of international gold watchers. To the tune of 14.6 million ounces. Now the evidence suggests that that was merely the prologue.

Let’s take these tidbits one at a time:

Sovereign wealth fund dumping $$ for gold? This one is still at the rumor stage, but highly-respected website Mineweb.com is supporting it. What we know for sure is that the country founded its primary sovereign wealth fund, China Investment Corporation (CIC), two years ago, with the stated aim of rapidly deploying some of its $1.5 trillion forex surpluses – $200 billion initially, with another $100 billion recently added to the kitty – into investment in non-Chinese enterprises. This it has been doing in spades, acquiring businesses around the globe. Extractive industries are among them, including Teck Corp., the diversified Canadian mining giant.

Might it also be buying up gold? We don’t know that for sure, but it seems likely. And, in addition, rumors sneaking off the mainland indicate that within the CIC, a lot of effort is being poured into prospective investment deals in the oil and precious metals sectors. The more it produces, the more it can keep.

The Chinese have made no secret of their disdain for current American economic policy and what they see as the inevitable destruction of the dollar. That they would be moving to diversify out of the greenback shocks precisely no one, and gold is one logical landing place for all those bucks. We suspect that’s exactly what is happening, behind the scenes as well as center stage.

Gold and silver pushed to the people. As recently as 2002, the private ownership of gold was prohibited in China. You could be jailed if caught with any in your possession. Beginning in 2009, in a stunning about-face, the central government removed all restrictions. In fact, as Mineweb and other sources report now it’s actively pushing folks to buy some personal metal, with China's Central Television, the main state-owned television company, running news programs cum infomercials, letting the public know just how easy it is to purchase gold and silver as an investment.  

It truly is as simple as can be, because every bank sells gold and silver bullion bars in four different sizes to individuals. (Try to find the same the next time you make the trek down to Wells Fargo.) Mining companies are reportedly encouraging employees to convert some of their wages to gold on payday. Gold is traded in some form 24 hours a day. And paper proxies for the metal are also soaring in popularity.

There are persistent rumors that the export of silver has already been banned. Gold could be next.

Thus China, which only yesterday was the lowest per-capita consumer of gold in the world, is bidding to become the biggest. Some analysts believe it will pass India – the top dog since forever – as early as 2010. Clearly, the government believes the country is strengthened if everyone who can holds some hard currency.

All this suggests a mania in the making, and only in the formative stage. Imagine if hundreds of millions of new consumers climb on that particular bandwagon…

China repatriates its bullion. Meanwhile, in early September numerous sources (see, e.g.: http://www.marketwatch.com/story/hong-kong-recalls-gold-reserves-from-london-2009-09-03) reported an announcement that Hong Kong is pulling all its physical gold holdings from depositories in London and transferring them to a newly built, high-security depository at the city's airport.

That means the government is backing the promotion of Hong Kong to a more formidable status as a Swiss-style, regional trading hub for bullion, at the same time as it reduces London's role as a key settlement and storage center.

Press reports cited government officials as saying that marketing efforts will be launched to convince Asian central banks to transfer their gold reserves to the Hong Kong facility. Outreach will also be made to commodity exchanges, banks, precious metals refiners and ETF providers.
There can be little doubt this signals that the Chinese government fully recognizes the importance of gold in a time of crisis, and that the most prudent plan involves keeping its stores close at hand.

China threatens to “just walk away.” In one of the year’s most intriguing developments, commodity and derivative markets were thrown into a tizzy on Monday, August 31, by the worldwide circulation of a story published two days earlier in Caijing magazine (and reported by Reuters here: http://www.marketwatch.com/story/hong-kong-recalls-gold-reserves-from-london-2009-09-03).

According to the Caijing article, a spokesperson for China’s state-owned Assets Supervision and Administration Commission – the regulator and nominal shareholder for state-owned enterprises (SOEs) – told six foreign banks that SOEs reserve the right to default on contracts.
Say what?

Maybe the commission has been paying attention to the “just walk away” forfeiture movement that blossomed among American homeowners whose overall debt on their properties far exceeded the assessed value.

Small wonder there was panic in trading houses that hold a lot of Chinese paper. They hope any problems will be worked out short of a default. In fact, “It's [only] a handful of companies who are being encouraged by regulators to ‘re-negotiate’,” says one banking source. “It's outrageous, but it's China, so everyone is treading very carefully.” Very carefully.

Nevertheless, in addition to tangible losses, those potentially affected fear the establishment of a dangerous precedent, one that could lead to utter chaos in the enormous, tangled world of derivatives.

And there is one other, albeit highly speculative, possibility. Some major entities – we don’t know who, due to the opaque nature of international gold trading – have huge, perhaps quite concentrated short positions in the metal, both on the COMEX and OTC market. Is one of them China, acting through American intermediary banks?

A short position in precious metals means that the initiator of that position is obligated to deliver physical gold or silver if the buyer (who holds the long end) wants it. Suppose China is one of the big shorts. Suppose it’s been playing the market in order to buy at what it sees as bargain prices. Now suppose a gold rally induces it to just walk away from all those obligations to deliver. Who’s going to force it to make good? Guess what, no one has a gun large enough.
Granted, it’s an outlandish scenario. But impossible? No. Beijing has shown nothing but indifference to what others think of it. And if the dollar does crap out as the world’s reserve currency, there’s nothing to say that China won’t see its self-interest as lying in a completely new direction.

Conclusion. Gold, and the companies that produce it, have enjoyed a brisk runup of late, as the metal mounts yet another assault on the beckoning, symbolic $1,000 level. How much of this can be traced to what China has done, is doing, or may yet do?

We don’t know, but we suspect it’s not entirely coincidental. All rumor and speculation aside, as China clearly turns more and more bullish on gold, so will everyone else.

Hopefully you have already secured your share of physical gold and silver before the masses start a run on them. Another of our favorite gold-related investments for 2009 – with even more potential upside than the yellow metal – is a company that has delivered reliable returns throughout the last year… even at a time when the Dow and S&P were tanking. Thus we call it “48 Karat Gold.” Learn more here.

 


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Fri, 09/11/2009 - 16:30 | Link to Comment Gilgamesh
Gilgamesh's picture

FUQI has been making a mint on the shift in China, in those regards.  But I suspect people still aren't going to believe what's happening in front of their eyes.  Yes, the same people that ramble on about China supporting global equity bubbles once again - are the same people who talk down gold (and silver) as wingnut/doomsday.

Fri, 09/11/2009 - 20:36 | Link to Comment gmrpeabody
gmrpeabody's picture

Thanks, Andy, for using the "thinkolator" and saving me from dumpster diving yet another last chance add.

Sat, 09/12/2009 - 08:38 | Link to Comment h4rdware
h4rdware's picture

It had to be either Royal (royalties) or Wheaton, and it wasn't Wheaton, being focused on Silver. But thanks for 'refining' that further. Ahem.

Tue, 09/15/2009 - 22:03 | Link to Comment Pairs Trader
Pairs Trader's picture

While this article is interesting, I find it eerily similar to some of the content of another article already published on Zero Hedge: China et al: Puts Floor in the Gold Market by Asiablues, http://www.zerohedge.com/article/china-et-al-puts-floor-gold-market.  
Asiablue's article is published a day earlier on Seeking Alpha and picked up by Reuter, etc.  However, this "guest post" was not even picked up by Seeking Alpha and is sitting as an "instablog", I'm now less than impressed with this "guest post". 

I have been a long time fan of Zero Hedge site, but this is one big disappointment to me. 

ZH: One suggestion, vet future "guest posts" more carefully.   

Fri, 09/11/2009 - 21:24 | Link to Comment Vicious
Vicious's picture

Interesting article, but you know I think I saw a similar post before. Yeah, it was yesterday! Asiablues wrote about this subject matter too. ZH, watch Asiablues…her content spreads quickly over them Interwebitubes.

 

Check it out:

http://www.zerohedge.com/article/china-et-al-puts-floor-gold-market

http://seekingalpha.com/article/160952-will-this-gold-rush-continue

http://jsmineset.com/

http://www.reuters.com/article/marketViews/idUSSeekingAlpha16095220090911

http://finance.yahoo.com/q/h?s=FCX

http://dianchu.blogspot.com/

Fri, 09/11/2009 - 16:31 | Link to Comment phaesed
phaesed's picture

Didn't know about that gold transfer... interesting

Fri, 09/11/2009 - 16:34 | Link to Comment Anonymous
Fri, 09/11/2009 - 22:55 | Link to Comment Anonymous
Sat, 09/12/2009 - 06:41 | Link to Comment FreddyInBangkok
FreddyInBangkok's picture

thing is exporting gold from Thailand prohibited without all the right permits failing which might lead to confiscation w/fine twice the value. I've found the spread can be somewhat higher. back in March gold dealers closed up shop for a week or so. Volatilty cited.

Fri, 09/11/2009 - 16:35 | Link to Comment Anonymous
Fri, 09/11/2009 - 16:37 | Link to Comment AN0NYM0US
AN0NYM0US's picture

not sure about the link at the end of the article  - seems like a late night infomercial even though it insists it is not - but when I read a pitch like this:

 

"I’m talking about a unique gold investment that’s made a handful of people quite wealthy, independent of recessions, new taxes, and even dips in gold prices.

 

  * Like Jan Henderson, who watched her 401(k) dwindle, but she still received a check worth $1,986 last month as a result of this investment.
    * And Keith Mills, who got a check for more than $1,729 in January 2009, even though the NYSE fell 10% that month
    * John Winthrop can barely stand to watch the news these days, but he doesn’t mind watching his checking account go up over $2,902 every 90 days.

It’s basically the only way to make money in gold no matter what‘s going on in the markets."

 

http://www.caseyresearch.com/crpmkt/crpSolo.php?id=148&ppref=ZHB148ED0909B

Fri, 09/11/2009 - 17:21 | Link to Comment KevinB
KevinB's picture

When I read a pitch like that, my first thought is "Why is he telling me about this? Why isn't he just buying it?".  I find it hard to believe any of it.

Sat, 09/12/2009 - 04:43 | Link to Comment Anonymous
Fri, 09/11/2009 - 16:40 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:57 | Link to Comment MinnesotaNice
MinnesotaNice's picture

Great info... thanks...

Fri, 09/11/2009 - 19:08 | Link to Comment Anonymous
Fri, 09/11/2009 - 16:47 | Link to Comment Trading Nymph
Trading Nymph's picture

I have been following this too...you saw what the Shanghai Copper Futures did when China gave credit to buy copper (another move away from USD). On Sept 28 china is releasing their own bonds. Reading between the lines, I am seeing China also thinking about becoming a major Car Maker and cutting out GM, Ford, etc...maybe even copying their designs? China HATES our USD, we are not listening at all to them and we deserve what we get. They will get their global currency, and we will not be number one....we just keep spending and spending. So yeah, pushing their people to buy gold is a lot better then pushing them to buy Real Estate and Stocks. I believe China is thinking just that when they got stuck with a bubble this year....btw the Shanghai Daily and The China Official Paper are a lot better sources of data IMHO........I talk a lot about it in my humble trading diary, which I normally reprint a lot of economic reports, Marc Chandler from BBH's FX comments (he emails them to me, and says it's ok), Fibo stuff,etc...while I watch the market fwiw....http://www.stockpickr.com/members/showforums/1/5723/

Fri, 09/11/2009 - 16:45 | Link to Comment Trading Nymph
Trading Nymph's picture

Here is the link to the official China Paper, IMHO it should be on everyone's reading list, much more insight then Market Watch, etc..http://www.china.org.cn/index.htm

Fri, 09/11/2009 - 18:08 | Link to Comment Lionhead
Lionhead's picture

Thanks TN; China is high up on my portfolio. Always looking for news articles. US media is about the last place to find good articles or info. Except here of course!

Fri, 09/11/2009 - 19:24 | Link to Comment Trading Nymph
Trading Nymph's picture

your welcome Lionhead....the other one I mentioned above is http://www.shanghaidaily.com/ there are about 15 other great sources to read via the internet I go thru daily....US media is normally so late to the party...Zero Hedge totally the place to hang with.

Fri, 09/11/2009 - 16:54 | Link to Comment Anonymous
Fri, 09/11/2009 - 19:13 | Link to Comment Anonymous
Fri, 09/11/2009 - 20:32 | Link to Comment Anonymous
Fri, 09/11/2009 - 16:55 | Link to Comment Hephasteus
Hephasteus's picture

Screw china. We got something better than Gold. We got illusions.


RECORD 75 MILLION AMERICANS NOW
PRETENDING THEY OWN THEIR OWN HOMES  
Low Interest Rates Help Many Fulfill The American (Banker's) Dream
 
Minneapolis, Minn. (SatireWire.com) — Showing no ill effects from a weak economy, housing numbers released by the National Association of Realtors today showed that a record 75 million Americans are now participating in the mass self-delusion that they, and not their banks, actually own their homes.
 
"Home ownership is the fulfillment of the American (banking industry's) dream, and we are proud to announce that more Americans than ever have been able to (help lending institutions) achieve that dream," said NAR President Richard Schicter.
 
After putting 20 percent down on a $235,000 house yesterday morning, Minneapolis pediatric nurse Stephanie Doogan officially became the 75 millionth American to take part in the widely accepted fantasy.  
 
"Ever since I was a little girl, I've wanted to (deceive myself into believing I could) be a homeowner," said Doogan, 35. "Well, look at me now! Me, little Stephanie Doogan, I actually have a place I can call 100 percent (minus 80 percent) my own!"  
 
Across the country, other (people in denial concerning their status as) property owners expressed similar satisfaction.  
 
"There's nothing like taking a walk around your (bank-owned) house, then going outside and kneeling down in your (bank-owned) lawn and grabbing a handful of (the bank's) dirt to make you realize how precious (their) land is," said 28-year-old Matt Jackson, who('s bank) bought a $210,000 home on New York's Long Island last year. "It makes me feel as though I really have something that no one can take away from me (unless I miss so much as one mortgage payment)."  
 
Added Devon Knight, who recently thinks he purchased a condominium in Baltimore's Inner Harbor: "When I was renting an apartment, if the furnace went out, I had to get the landlord to fix it. But now, if the furnace goes out, I have to fix it!... hold on, I'm losing the illusion here... why is that good again?"  
 
"Equity," said Jay Harrington, Knight's mortgage broker at First Union. "Just remember, you have equity. And next to the right of every single American (major corporation) to have a say in who gets elected, that's the most sacred thing you can (pretend you) have."  
 
Copyright © 2001-2002, SatireWire. 

Fri, 09/11/2009 - 17:38 | Link to Comment BM (not verified)
Fri, 09/11/2009 - 21:24 | Link to Comment Marge N Call
Marge N Call's picture

EXACTLY. That's why real estate scares me.

Sat, 09/12/2009 - 01:44 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:23 | Link to Comment Anonymous
Sat, 09/12/2009 - 02:32 | Link to Comment Anonymous
Sat, 09/12/2009 - 11:41 | Link to Comment Anonymous
Sat, 09/12/2009 - 01:42 | Link to Comment Anonymous
Fri, 09/11/2009 - 16:56 | Link to Comment Anonymous
Fri, 09/11/2009 - 19:15 | Link to Comment Anonymous
Fri, 09/11/2009 - 16:56 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:02 | Link to Comment Veteran
Veteran's picture

Fuck China.  You can't believe a fucking thing they say.  Inscrutable bastards

Fri, 09/11/2009 - 17:11 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

And you can believe what the US Goverment says?

Fri, 09/11/2009 - 17:17 | Link to Comment Busy-Body
Busy-Body's picture

CNBS (I mean, GE) said I could believe - no conflict of interest there......;)

Fri, 09/11/2009 - 17:11 | Link to Comment George the baby...
George the baby crusher's picture

Wow, finally a university educated academic in our midst.  And of course Americans are being totally honest about the trillions of scams that is called market capitalism.

Fri, 09/11/2009 - 17:27 | Link to Comment Veteran
Veteran's picture

Hey, I paid for my edumac..., eduka..., my degree just like the rest of you. 

Fri, 09/11/2009 - 18:03 | Link to Comment Miles Kendig
Miles Kendig's picture

When you have them buy the balls, their hearts and minds will follow.

You know this fact of life Vet..  Why so shocked and surprised?

Fri, 09/11/2009 - 18:14 | Link to Comment Veteran
Veteran's picture

I know, I know.  I hate myself

Fri, 09/11/2009 - 19:28 | Link to Comment Miles Kendig
Miles Kendig's picture

Hate yo'self all you want... I still respect and admire you... Welcome to Friday my dear associate....

http://www.youtube.com/watch?v=VlaXZtd8_nM

Fri, 09/11/2009 - 17:10 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Does Bobby Prechter know there is a country called China?

Fri, 09/11/2009 - 17:13 | Link to Comment George the baby...
George the baby crusher's picture

Bobby thinks china is something his grandmother had in her kitchen cupboards.

Fri, 09/11/2009 - 18:04 | Link to Comment Miles Kendig
Miles Kendig's picture

And when ginger was added made for a great pass along for a dinner party.

Fri, 09/11/2009 - 18:30 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:11 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:18 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:24 | Link to Comment waterdog
waterdog's picture

China has its own gold mines. They are of very poor quality. It is very expensive to get an ounce of gold from mine to vault in China. Efficiently operating facilities in other countries run by private companies are costing mine to vault gold at $ 300 an ounce. China's mine to vault is probably $ 650 if not more. China's about-face in gold ownership is caused by China dumping the cost of mining its gold onto its citizens. With gold selling for $ 950+, China can afford to mine gold as long as it is sold in China. The amount of gold held by China would not buy one attack bomber from the US.

Fri, 09/11/2009 - 19:26 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:33 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:37 | Link to Comment Anonymous
Fri, 09/11/2009 - 17:39 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:20 | Link to Comment Bam_Man
Bam_Man's picture

Yes, China's "execution skills" are indeed amazing.

With the possible exception of Texas, they "execute" far more efficiently than we do here in the US.

 

Fri, 09/11/2009 - 17:47 | Link to Comment mkkby
mkkby's picture

This story says China is buying a lot of gold.  Then later, maybe they are short.  Someone's very confused.

Fri, 09/11/2009 - 17:53 | Link to Comment Anonymous
Fri, 09/11/2009 - 19:28 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:00 | Link to Comment Miles Kendig
Miles Kendig's picture

TD - You don't now?  Now I feel better for sure.

Fri, 09/11/2009 - 18:10 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:12 | Link to Comment Joe Sixpack
Joe Sixpack's picture

"Try to find the same the next time you make the trek down to Wells Fargo"

 

You know, the guys whose ads picture a stagecoach carrying gold in the old West. Yea, them.

Fri, 09/11/2009 - 18:14 | Link to Comment Joe Sixpack
Joe Sixpack's picture

"And there is one other, albeit highly speculative, possibility. Some major entities – we don’t know who, due to the opaque nature of international gold trading – have huge, perhaps quite concentrated short positions in the metal, both on the COMEX and OTC market. Is one of them China, acting through American intermediary banks?"

Barrick Gold?

Fri, 09/11/2009 - 18:59 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:50 | Link to Comment Spitzer
Spitzer's picture

Bank of Nova Scotia in Canada sells metal. Its right there, just drop it in your pocket.

What is people opinion on Prechters $400 gold call ?

 

 

Fri, 09/11/2009 - 19:08 | Link to Comment Anonymous
Fri, 09/11/2009 - 18:59 | Link to Comment Pizza Delivery Man
Pizza Delivery Man's picture

"P. S. Remember... for only $39, you get:"

Started sounding like a shamwow/slap chop infomercial.

Thanks...but no thanks.

Fri, 09/11/2009 - 19:04 | Link to Comment Anonymous
Fri, 09/11/2009 - 19:11 | Link to Comment Anonymous
Fri, 09/11/2009 - 19:13 | Link to Comment Bam_Man
Bam_Man's picture

There really is no story here.

All this means is that China intends to maintain their Yuan/Dollar peg for the foreseeable future.

They are clearly promoting public gold ownership as a way for people to "hedge" against the inflationary effects of maintaining the peg.

Not really a BIG deal.

Fri, 09/11/2009 - 19:29 | Link to Comment Anonymous
Fri, 09/11/2009 - 20:47 | Link to Comment gmrpeabody
gmrpeabody's picture

When you can snatch the pebble from my hand, Grasshopper!

 

In other words..., when you can see the game changer before anyone else....

Fri, 09/11/2009 - 19:15 | Link to Comment Anonymous
Fri, 09/11/2009 - 19:57 | Link to Comment Anonymous
Fri, 09/11/2009 - 21:25 | Link to Comment DaylightWastingTime
DaylightWastingTime's picture

the midas crutch for a crippled economy

Fri, 09/11/2009 - 22:14 | Link to Comment deadhead
deadhead's picture

speaking of china, the wsj reports that Obama okayed the tariffs on chinese imported tires (happy usa labor unions, natch), which is likely to perturb the chinese a wee bit.  will be interest to see what Beijing responds with.

any thoughts on this from our china experts....

edit...link for article   http://online.wsj.com/article/SB125271824237605479.html#mod=WSJ_hpp_MIDDLTopStories

Sat, 09/12/2009 - 00:58 | Link to Comment Anonymous
Sat, 09/12/2009 - 04:52 | Link to Comment Hephasteus
Hephasteus's picture

BS TOTAL BS.

Sat, 09/12/2009 - 04:52 | Link to Comment Anonymous
Sat, 09/12/2009 - 05:02 | Link to Comment Anonymous
Sat, 09/12/2009 - 08:05 | Link to Comment Anonymous
Sat, 09/12/2009 - 08:33 | Link to Comment Anonymous
Sat, 09/12/2009 - 08:42 | Link to Comment Anonymous
Sat, 09/12/2009 - 09:13 | Link to Comment Anonymous
Sat, 09/12/2009 - 10:38 | Link to Comment Anonymous
Sat, 09/12/2009 - 14:18 | Link to Comment waterdog
waterdog's picture

To all of those who took the time to comment on my position about China, thank you very much. I agree with all of you.

A negative response is 1000% better than no response at all.

I do wish that those that become very upset with me use rough language to refer to me by, rather than vulgar. Many times, the reaction of the readers to my comments is more entertaining than the comment.

Keep it sweet, or I will piss everyone off, except Marla.

Sat, 09/19/2009 - 05:20 | Link to Comment Mediocritas
Mediocritas's picture

Ok, let's assume that China is *not* one of the big shorts (I have no reason to believe it is). Let's also assume that it is going to stand firm at the end of the month and demand delivery, which will force those participating in the gold carry trade to come forward (a repeat of earlier in the year: http://seekingalpha.com/article/129128-did-the-ecb-save-comex-from-gold-...).

1: Which big bear(s) will emerge from the forest?
2: Who will execute the stick-save?

I'm going with the JPM/Fed combo (based on Barrick's freakout).
http://gata.org/node/7773

Timing wise, possibly as soon as Sep delivery. If not then Dec would be a major pressure point if we don't already see a major COMEX default before then (triple witching + 6 month contracts).

The most disruptive case I can think of is that China emerge at the end of the month as a big taker of physical delivery, JPM is on the hook and can't deliver, and no CB (or the IMF) comes in for the save. What was JPMs net derivative exposure at last count?

CBs have to be aware of the risks associated with the carry trade (http://whiskeyandgunpowder.com/the-gold-carry-trade/) which might explain why CB gold sales have been so anemic the last few years, they're bunkering down:
http://www.gata.org/node/7396

Finally, here is a repost, but people *really* should read it, highly prophetic from 2003:
http://www.gold-eagle.com/editorials_03/siebholz062903.html

Do NOT follow this link or you will be banned from the site!