Why Is There A $71 Billion Difference Between China's FX Reserves And... China's FX Reserves?

Tyler Durden's picture

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Renfield's picture

Most intriguing. Thank you for pursuing this - I will be most interested in future follow-ups.

My guess is Option #3, as this would be in keeping with China's statements over the past year. Option #2 also sounds rather possible - I agree #1 sounds pretty unlikely.

Not sure how to evaluate Option #4...if 15% is not accounted for, then where is it? I don't understand that paragraph very well.

dr_teeth's picture

Somebody in China is going to be shot (commit suicide/disappear) over this discrepancy.

Sisyphus's picture

OT. Where is Marla? Vacation? Or have you and her decided to go separate ways? Haven't seen any posts from her in ages? 

Tyler Durden's picture

Marla is here... hiding somewhere

Mr Lennon Hendrix's picture

I like #4; liquidated FX into gold holdings?  Gold looked really strong today, and it was before the JPM "put".  Gold leveled last night in asia, and made it through a cac slap afterwards as well.

Renfield's picture


Just as the US & UK don't really tell how little gold they have...

So China & Russia will never really tell how much.

If that's gold, then I reckon it gonna remain 'unaccounted for'. ;-)

chinaguy's picture

No way to tell, but Occam's razor says it was a slip up, but, they don't really GAF.

It's not like this is going to be anything but one paragraph printed on page 47 of some obscure journal in China. No one there is going to put his neck on the block for something that can not be proved.

carbonmutant's picture

Good stuff as usual, Tyler et al.

It will be interesting to hear their explaination...


Kissy Ass's picture

LoL. They owe an explanation? Funny how people really believe shit like that.

It's also funny how people believe that everyone must follow the rules set by the US, no matter how often they change, no matter how unequally they are enforced. Manipulated, obfuscated, fraud-ulated.

Wake up dummies.

Invest where there will be the greatest amount of growth potential. China.

Anonymous's picture

You mean, like, maybe invest in chinese CRE? A lot of great potential, indeed, just like a cannon bullet going up achieves a lot of potential... to fall back down I guess...

Oracle of Kypseli's picture

Or the greatest potential for another revolution, if things turn sour.

Cognitive Dissonance's picture

"........a $71 billion differential from the PBOC's number."

Hell, that's a sovereign nation's equivalent to loose change found beneath the sofa cushions these days. Or a rounding error for Goldman Sachs when tallying up the quarters profits. Or end of business day floor sweepings at the Federal Reserve.

Now, tack on a few additional zeros and you might actually be on to something. You know, a trillion here, a trillion there, after a while it begins to add up to serious money.

Glen's picture

Option 5 - Rounding error. At 3% of total FX reserves and a system notorious for rubbery figures, the books will never balance.

jomama's picture

i presume you're posting this from a 'safe' location?

tom a taxpayer's picture


Are we going to hold China to a higher standard of auditing than the U.S.?  When we have the Federal Reserve stonewalling an audit of trillions of $, are we  going to quibble about $71 billion in China's FX? While the U.S. destroys accounting standards at big U.S. banks by willfully gutting FASB, are we going to question $71 billion at PBOC?

Yes, all banks foreign and domestic need to be scrutinized and audited. And it is important to track the PBOC. And the federal reserve is relentlessly scrutinized by ZH. But it would be nice to have an audit of the Federal Reserve that gave a $71 billion level of precision or accuracy.


jeff montanye's picture

yes it damn sure would.  can it happen?

JuicedGamma's picture

Amazing that the Chinese have continued to buy US Treasuries meanwhile complaining all the while about the state of the US finances. Probably they've caused some of problems through meddlesome exchange rates and unfair trade policies. I believe they helped enable the low interest rates that were behind the stupid low long rates of the past 10 years. Of course they don't see it, after all they are the communist party, they believe in five year plans, fixed currency rates, censorship, and probably the takeover of private assets if they don't like what your company is doing. Just ask Google.

Anonymous's picture

laws are funny.....they're invisible

suteibu's picture

I'll bet analysts couldn't tell you the true population of China within 3%.  What's the surprise?

Anonymous's picture

god and death and life are one

Anonymous's picture

That is because China bought around 2300 metric tones of gold. They have been secretly buying gold for years.

Get_to_the_choppa's picture

71 Billion will buy you a lot of gold plated tungsten.  Just sayin'.

Anonymous's picture

Or maybe the numbers just refer to a different point in time

Stu's picture

so whats the big deal ?

Anonymous's picture

Probably just secretly stockpiling commodities -- like lead and melamine....

godfader's picture

China's government accounting and statistics is run by Bernie Madoff. Anybody accusing the US of cooking the books has no idea what's going on in China.

junkyard dog's picture

I am going with #2. The country spends every waking moment lying about everything and watching the US news outlets suck it down like water.

Keep buying those made in China toys for your kids. We need China, just ask CNBC.

We need China like I need worms.


Anonymous's picture

"Whether the use of funds was buying and transferring bearer bonds from Italy to Switzerland,"

LOL. I saw what you did there.

Anonymous's picture

But Tyler you yourself revealed that the Treasuries are being largely purchased by the HOUSEHOLD sector.

Mom, kids, apple pie. Little pink households for you and me.

71 billion is chump change

in Zimbabwe!

In the words of Axl Rose

where do we go
where do we go
where do we go

eye eye eye


Anonymous's picture

The PBoC’s reported reserves are a lot more than $2 trillion, and that if correctly accounted they would be pretty close to $3 trillion.


Kayman's picture

China lies. And they do have plan. Obfuscate and Manipulate.

So long as American politicians continue to Kowtow to China, this country will remain in our current quagmire. And it will get worse.

China has sold inferior junk in exchange for U.S. dollars and our government is doing the wiggly-jiggly instead of stopping the insanity.

Until we stop outsourcing American jobs, outsourcing American technology for free, and financially pumping up the political and economic power of the Chinese Communist Fascist state, we will get weaker by the day.

For those seeking the highest return because of China's purported growth (and growth potential) just look to Nazi Germany of the 1930's. Incredible growth by "dictat" never lasts. It ends in blood and tears.

dumpster's picture

China lies


from mad magizene


spy vs, spy 

Anonymous's picture

Here is your answer for the diffence


Add some commissions in there and perhaps some imf gold and voiola!

Anonymous's picture

Well this is an intriguing angle on what China may be up to re 'reserves'.
Just another angle to consider. May have merit.