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China Says It Must Add To Gold Reserves To Promote Yuan Globalization And As An FX Hedge

Tyler Durden's picture




 

Back in September, when we provided the monthly observation on what has become a record year to date surge in Chinese imports of gold from Hong Kong, we reminded readers that "in December 2009, the China Youth Daily quoted State Council advisor Ji as saying that a team of experts from Beijing and Shanghai have set up a "task force" last year to consider growing China's gold reserves. "We suggested that China's gold reserves should reach 6,000 tons in the next 3-5 years and perhaps 10,000 tons in 8-10 years," the paper quoted him. Has China managed to accumulated 6,000 tons yet?  We won't know for sure until the official disclosure which will come when China is ready and not a moment earlier, but at the current run-rate of accumulation which is just shy of 1,000 tons per year, it is certainly within the realm of possibilities that China is now the second largest holder of gold in the world, surpassing Germany's 3,395 tons and second only to the US."

Two days ago we showed that the relentless importing of gold in China continues, yet what has been missing is an update direct form the horse's mouth how China feels toward gold (because we certainly know how it feels toward US Treasury paper). Today, we finally got one straight from Beijing, and that during a very carefully supervised time when the 18th Communist Congress is still in session, and every word out of China has profoundly telegraphic implications.

From Bloomberg:

  • China needs to add to its gold reserves to ensure national economic and financial safety, promote yuan globalization and as a hedge against foreign- reserve risks, Gao Wei, an official from the Department of International Economic Affairs of Ministry of Foreign Affairs, writes in a commentary in the China Securities Journal today.
  • While gold prices are currently near record highs, China can build its reserves by buying low and selling high amid the short-term volatility, Gao writes in newspaper
  • China’s gold reserve is “too small”, Gao says

And there it is: while many have speculated that China, which has not given an update of its official holdings in nearly 4 years, is quietly building up its gold reserve holdings behind the scenes, there was no reason to worry. The time to worry would be when China was starting to give indications it is prepared to tell the world what its true gold holdings are (by now certainly well over 1000 tonnes). And the above piece from Wei is just that: because in saying very little, the Chinese official with a key political post has just given the first hint that China is preparing to give its official gold far greater focus. And from there, the time until China releases an IMF update on its official reserve holdings will be measured in days if not hours. Because all the gold will have long been accumulated.

And once that happens it will be too late to buy any incremental gold. Or tungsten.

 

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Wed, 11/14/2012 - 00:16 | 2978775 I think I need ...
I think I need to buy a gun's picture

fiat currencies are the best and gold only as a wealth reserve

Wed, 11/14/2012 - 00:48 | 2978838 nope-1004
nope-1004's picture

Ya, like totally.  Can't slick me any crack from my hommies with no freaking gold, dude kno I'm sayin.  I paste 'em fitties.... get me some crack, a little hooch, some weed.  S'all good, bro!  I'm sayin'.

 

 

Wed, 11/14/2012 - 01:01 | 2978861 TruthInSunshine
TruthInSunshine's picture
China Says It Must Add To Gold Reserves Because The Fed, ECB & Bernanke Are "Batshit Crazy"

 

Fixed it.

Wed, 11/14/2012 - 01:05 | 2978870 markmotive
markmotive's picture

Gold demand in China is just getting started.

http://www.planbeconomics.com/2012/03/29/gold-demand-in-china-just-getti...

 

Wed, 11/14/2012 - 01:20 | 2978893 mick68
mick68's picture

China already has 10K+ reserves guaranteed. But go ahead, believe their official numbers if you like.

Wed, 11/14/2012 - 01:40 | 2978920 fourchan
fourchan's picture

the red army is digging up africa and south america, and god knows where else, for free gold from their free slave army of zombies.

Wed, 11/14/2012 - 01:58 | 2978933 Seer
Seer's picture

Are you saying that Chinese are doing the digging abroad?  Or, are you saying that the Chinese are being forced at home to dig in their own backyards?

Please clarify.

Once clarified I'll be able to pass along the info to the hordes of "free" folks who are staring intently at their iCrap, which was... made in China!

Wed, 11/14/2012 - 02:07 | 2978942 Michaelwiseguy
Michaelwiseguy's picture

"I will steal the majority of peoples money, wealth, and ability to prosper by owning the money supply and making the monetary rules myself." - Dr. Evil

Wed, 11/14/2012 - 02:08 | 2978949 Richard Chesler
Richard Chesler's picture

When China says Gold they actually refer to gold plated tugnsten.

The proof is in the 'Made in China" shitty sticker.

Fuck you China, and fuck you Bernanke.

 

Wed, 11/14/2012 - 04:43 | 2979062 savagegoose
savagegoose's picture

 " IN GOLD WE TRUST "

Text on new Chinese currency.

Wed, 11/14/2012 - 08:11 | 2979194 GetZeeGold
GetZeeGold's picture

 

 

I can't look - Chuck Munger

Wed, 11/14/2012 - 05:42 | 2979093 Tango in the Blight
Tango in the Blight's picture

There is no Red Army since the end of 1991.

Or maybe you mean the People's Liberation Army?

Wed, 11/14/2012 - 07:30 | 2979154 lewy14
lewy14's picture

Exactly. And furthermore, there's no Department of War in the US since WWII. It's the Department of Defense. So yeah, totally different thingies.

Wed, 11/14/2012 - 07:33 | 2979160 Snidley Whipsnae
Snidley Whipsnae's picture

TI Sunshine... sounds about right. I like the edit.

Wed, 11/14/2012 - 08:51 | 2979278 DeadFred
DeadFred's picture

If you look at this report from the right angle you will see a truly remarkable thing, a politician who is telling the truth. Didn't see it coming.

Wed, 11/14/2012 - 01:41 | 2978921 I think I need ...
I think I need to buy a gun's picture

well like ya kno g if i cam wuth thee au u wouldn't want thee au to be like minus some four thee ccrack, or then the truouibley begins and we candiiit iave htaaat

Wed, 11/14/2012 - 01:56 | 2978932 gdogus erectus
gdogus erectus's picture

Looks like the anti gold spam bot forgot to give itself a down arrow.

Wed, 11/14/2012 - 02:05 | 2978946 putaipan
putaipan's picture

you makin' fun of my spellin'.....bayonet up yer ass!   china still has banksters.... all of their gold belong to them!

Wed, 11/14/2012 - 05:42 | 2979092 Al Gorerhythm
Al Gorerhythm's picture

The irony; a paper bug insinuating that the gold bug should get an education.

Wed, 11/14/2012 - 05:30 | 2979086 TraitorsHang
TraitorsHang's picture

Did you read your post before you clicked submit? I'm just curious....

Wed, 11/14/2012 - 00:52 | 2978845 xtop23
xtop23's picture

If China is putting this stuff out over the wire, we probably aren't far from escape velocity. 

Currency war over, queue the trade war.

Wed, 11/14/2012 - 01:37 | 2978903 TruthInSunshine
TruthInSunshine's picture

Here's one of the trades of the next decade, along with the when (not if) to short U.S. tnotes (and other sovereign debt AND credit instuments), as well:

 

Is China's incoming leadership hell bent on forcing a dramatic rise in domestic consumption, in order to attempt to offset what is going to be a continued decline in demand for exported goods, at the risk of creating even more quickly rising inflation, and at the risk of not being able to succeed, given the Chinese propensity to save (on a relative basis), which would lead to rising unemployment (a risk factor that's probably more unsettling to the Chinese Establishment than high inflation, given China's demographics)?

Or will China's incoming leadership double down on the export model that's driven their high rate of economic growth thus far, to the point of swallowing even higher inflation imported from abroad (assuming there's not a serious collapse tantamount to a depression in the global economy), even increasing government subsidization of private industry in order to make exports less expensive to foreign purchasers & maintain the highest rate of employment possible given unfolding circumstances, which would almost certainly essentially mean that China has also refused to truly float its currency?

 

 

Wed, 11/14/2012 - 02:04 | 2978938 Michaelwiseguy
Michaelwiseguy's picture

.

Wed, 11/14/2012 - 02:35 | 2978971 Seer
Seer's picture

“We must find new lands from which we can easily obtain raw materials and at the same time exploit the cheap slave labor that is available from the natives of the colonies. The colonies would also provide a dumping ground for the surplus goods produced in our factories.”

- Cecil Rhodes

Wed, 11/14/2012 - 02:02 | 2978940 Seer
Seer's picture

A fucking down arrow?  For what?

Seems like you've got the pickle identified to me.

They've latched on to the growth demon and it's a sure ticket to hell now.

Wed, 11/14/2012 - 05:47 | 2979096 SWIFT 760
SWIFT 760's picture

Perhaps you're getting warmer. The chinks will buy every possible ounce of gold at its current low price. When they acquire, oh say 35k tons, they can do whatever they want...hedge against anything, internal sovereign value, REPLACE PETRO DOLLARS with PETRO GOLD, their options are numerous.

All the while not to start US dollar devaluation panic thus using their USD FX to obtain their desired outcomes. Sun Tzu's Art of War nearly mimics strategy of the chinks.

Wed, 11/14/2012 - 07:49 | 2979171 Snidley Whipsnae
Snidley Whipsnae's picture

TI Sunshine... Your last paragraph... China will continue on the horse that brought them to this point. If they deviate from their current path it will be only slightly and after a great deal of study. What a EUREKA moment it must have been when they were allowed full membership into the WTO... like the day Gates was given the keys to the kingdom by IBM.

China understands that patience is a virtue... and China has the patience to employ patience... :)

"Patience (or forbearing) is the state of endurance under difficult circumstances, which can mean persevering in the face of delay or provocation without acting on annoyance/anger in a negative way; or exhibiting forbearance when under strain, especially when faced with longer-term difficulties. Patience is the level of endurance one can take before negativity. It is also used to refer to the character trait of being steadfast."

http://en.wikipedia.org/wiki/Patience

Wed, 11/14/2012 - 02:08 | 2978948 Newager23
Newager23's picture

We are getting very close to gold break out. I've been nervous that gold could take another tumble because we didn't break through $1800 in the recent move up. However, after the Obama victory, the story for gold has been very bullish. Now we get this quote out of China today - by far the biggest buyer out there. What could be more bullish?

Most of us have become technical traders, after watching gold and silver move up and down like a yo-yo. But I think we getting close to a major break out. And what I mean is a $50 dollar move, followed by a $70 move. Gold will likely jump over $100 in a couple of days. This should happen sometime before xmas. And gold will likely close over $1900 for 2012.

Why? Because the demand for gold is growing in my opinion. And the floor is being set by central banks throughout the world, who are buyers. Any day now we are going to be hearing about another country buying 100+ tons. And then another. Gold is the new reserve currency to own, and countries are figuring this out.

I used to think the only thing that could push down gold was a recovering economy. But I no longer think that is a possibility. Any day now the DOW is going to drop 500 points and then another 500 points the next day. With this drop the layoffs will begin, as corporations try to defend their share price. This will start a downward spiral in the economy. Thus, the economy is toast and not coming back for a long time. 

So, there is no longer a threat to gold going down. Soon the market will figure this out, and that is when we get our $100 up move over two days. Then another $50 up move a few days later. It's coming. I can feel it. I've been early before, so I wouldn't be surprised if gold closes under $1800 at year end. But it won't take long in 2013. This bull market is NOT over.

This is the first post when I spoke about the price of gold when I did not say to be weary of a stock market crash - sending gold prices plunging. I think that threat is gone. It's time to load up on mining stocks and bullion. We are getting ready for the mania phase to kick in. I thought we would have to wait until 2014 or 2015, but now I think it could begin any day. 

www.goldsilverdata.com (for gold & silver mining stocks)

 

 

Wed, 11/14/2012 - 04:23 | 2979048 Nassim
Nassim's picture

Ever heard of monetary deflation? When rich people holding gold are forced to sell it - because it is the easiest real asset to sell.

Wed, 11/14/2012 - 04:53 | 2979069 cossack55
cossack55's picture

Have you also notice that when the moneybags sell that there is never a shortage of buyers.

Wed, 11/14/2012 - 08:07 | 2979189 new game
new game's picture

why would they sell? they are rich already. they bot gold to hedge against - what? - the very system they fucked to a pulp.

rethink your thought dude. 08 gold was the only asset  that held it own relative to the whole mess...

Wed, 11/14/2012 - 07:06 | 2979128 awakening
awakening's picture

Working so well that Europe took the time out to celebrate today - http://www.abc.net.au/news/2012-11-14/anti-austerity-strikes-sweep-europ...

Wed, 11/14/2012 - 00:16 | 2978777 BeerBrewer09
BeerBrewer09's picture

Gold will keep making record highs.

Wed, 11/14/2012 - 00:21 | 2978788 I think I need ...
I think I need to buy a gun's picture

gold won't reach 2k it will be 36k once obama revalues

Wed, 11/14/2012 - 00:59 | 2978856 pitz
pitz's picture

Along with Dow 36,000?  1:1 ratio.  Motherfucking religion.

Wed, 11/14/2012 - 01:43 | 2978919 I think I need ...
I think I need to buy a gun's picture

SOOOOOOOOOOOOO MANY PEOPLE ON ZERO HEDGE DON'T UNDERSTAND GOLD, YOU DON'T WANT IT AS A CURRENCY DEBASEMENT BITCHEZ

Wed, 11/14/2012 - 02:34 | 2978970 hmmtellmemore
hmmtellmemore's picture

If notes do not say explicitly "worth x grains of gold/silver" then devaluing a currency on a "gold standard" is fairly easy.  All it has to do it raise the notes per ounce peg.  

 

A psuedo gold backed currency will placate many people, but won't stop the devaluing, and so won't stop huge deficits and warfare-welfare State.  I'd recommend selling your gold right after the inital gold backing occurs, around 2020 or so.  Then trade your savings for gold again in 4 or 5 years to get ready for the next 10% devaluation.

Wed, 11/14/2012 - 00:19 | 2978783 Bastiat
Bastiat's picture

Bitchez.

Wed, 11/14/2012 - 07:05 | 2979127 ParkAveFlasher
ParkAveFlasher's picture

jien renz!

Wed, 11/14/2012 - 00:20 | 2978784 Yen Cross
Yen Cross's picture

PBoC should be more worried about the " sudden new amerikan "energy policies"... America will be "net exporter" soon...

  Extraction costs 85bbl. Then net exporting? Fuck You U.S.A.

Wed, 11/14/2012 - 02:36 | 2978972 hmmtellmemore
hmmtellmemore's picture

Leading exporter of fresh fission plutonium energy, will deliver to your door.

Wed, 11/14/2012 - 04:11 | 2979042 Yen Cross
Yen Cross's picture

? All Rightie then...

Wed, 11/14/2012 - 00:24 | 2978789 The Shootist
The Shootist's picture

So, does this article imply their pretty content with they're cheaply bought position? And adding more is icing on the cake?

Wed, 11/14/2012 - 00:24 | 2978796 Top_Kill
Top_Kill's picture

My thoughts exactly. Not that I believe it to be true. But from a trading perspective, that would be the play here.

Wed, 11/14/2012 - 00:34 | 2978812 Stuart
Stuart's picture

it means there's a hard floor, a really hard floor and those who think they're smarter than the rest and wish to test it better be damned well paying attention else they'll be left behind covering their underwater shorts without any notice....Naked COMEX shorts better take notice.  They've just been put on the endangered species list.   I wonder if they're smart enough to even know it yet.  

Wed, 11/14/2012 - 08:02 | 2979182 Snidley Whipsnae
Snidley Whipsnae's picture

You get it Stuart... First comment to mention the 'FLOOR' that China has placed under gold.

Of course China and everyone else wants to aquire gold cheaply... but, China will not stop buying physical gold if the paper gold price rises waaay above their floor.

Seems to me that every central bank in the world has suddenly awakened to the fact that they need gold and were foolish to lend/sell their gold reserves. In addition, all of SE Asian peoples are accumulating when possible. If more than half the world's population buys 1/10 oz of gold per year then the supply taken off the market is significant. Especially when central banks are attempting to replace their reserves.

As James Turk said... "Where is all this gold coming from?"

Wed, 11/14/2012 - 08:10 | 2979190 JoBob
JoBob's picture

(Redundant)

Wed, 11/14/2012 - 00:25 | 2978792 Top_Kill
Top_Kill's picture

k

Wed, 11/14/2012 - 00:26 | 2978797 holdbuysell
holdbuysell's picture

Just be careful from whom you buy:  the Federal Reserve Bank of New York and the Bank of England have been known to provide bad delivery bars.

Ask Germany.

http://www.zerohedge.com/news/2012-11-09/exclusive-bank-england-fed-no-i...

Wed, 11/14/2012 - 03:33 | 2978884 xtop23
xtop23's picture

And buy in units of 1oz. or less. They're a lot more difficult to produce and much more expensive to counterfeit. Not really cost effective at current valuations. They like the 10oz +'rs.

When we go truly parabolic though, your own mother will sell you tungsten.

Wed, 11/14/2012 - 00:26 | 2978804 Stuart
Stuart's picture

Got Gold Bitchez!!  Better get more soon, not paper, the real stuff.

 

Wed, 11/14/2012 - 00:32 | 2978806 Dr. Engali
Dr. Engali's picture

China to JPM : Thank you very much for suppressing the price of gold and helping us get it cheaper than we otherwise could have. We know we promised banking in China for return but guess what.........readership changed bitch ...fooka yu.....your gold berong to us!

Wed, 11/14/2012 - 00:34 | 2978814 The Shootist
The Shootist's picture

6,000 tons? If they're in that ballpark, they better hope to hell it's not the tungsten shit from the fed or LBMA.

Wed, 11/14/2012 - 00:56 | 2978853 ilovefreedom
ilovefreedom's picture

I would actually not mind this as it would expose illegitimate holdings.

Only so many multi-kilo investment grade bullion bars. 

Let's start auditing and assaying those since most havent seen the light of day in decades.

Wed, 11/14/2012 - 05:38 | 2979091 Urban Redneck
Urban Redneck's picture

6,000 tons would imply that they were not fully "truthful" with their last disclosure of "official" holdings as they do have domestic demand.

Wed, 11/14/2012 - 02:39 | 2978975 hmmtellmemore
hmmtellmemore's picture

Harro Opium War cawring, it for you

Wed, 11/14/2012 - 04:10 | 2978978 BlackholeDivestment
BlackholeDivestment's picture

Bugs to All the Tea: Eh, what's up Doc? Dig the trip from the Essense of Man, and thanks for helping with the hole. I hope you get the General idea better than you have. The Broad? Well, she can't act ''alone'', not without ''heels'' aaah buv her, ah buv her head. Oh my no, don't stop ...thinking about The Day After Tomorrow and the other side of the Rainbow Flag next to Old Glory. Use yer head, they do it on Malls in public and people just walk on and buy when Black Friday Comes daah dah dum dumb. http://www.youtube.com/watch?v=UVQKiqCZ9No Put your ear a bit closer to the track and you will feel the vibe of the Peace Train coming to Jerusalem. The smoke and mirros have everyone ignoring why people of Fukushima are looking down the other side of Morning. Hey, wait a minute. Doc, Doc, wake up Doc, lets get back to the future. It's curtains for the ignorant slut for a reason. http://www.youtube.com/watch?v=Ul5HTPES-yU Just weight, you will not see, just a rider on the black hole. You will hear the sound of Krugman's Fifth Symphony, played inside ''One New World Devil's Tower'' tune, clear enough to hear Aaron's trumpet. ''Rock'',  ah like ah hewn rolling stone Russo. Oh, ''Dimon's'' are forever, odd ''fellows'', risen for hoursemen from the Ground Zero Interest graven image. Final confirmation, that the Lady; drinking the 911 wine of wrath from the give me Silver Blue and Gold shelter Helter Skelter cup overflowing with puts, while naked and without Magic Underwear under her favorite Red vote 2 party number 666-ADD-Debt call me Wha Wha Whaa Blondieee I'm on the hook not in the Good Book dress, is a tramp stamped design for Agent Smith. http://www.youtube.com/watch?v=pr7QhIJVvxo 

The Pope's Butler did it? LMAO. I bet the two witnesses in that case were not related to Daniel's prophetic call of destruction or any murdered person that left behind a record of events that lead up to the revelation of their death. http://www.youtube.com/watch?v=2ySu-kY3YWc&feature=fvwrel

Wed, 11/14/2012 - 07:07 | 2979132 onebir
onebir's picture

^^^=stream of unconsciousness.

Wed, 11/14/2012 - 08:06 | 2979185 Snidley Whipsnae
Snidley Whipsnae's picture

coded message?

Wed, 11/14/2012 - 00:33 | 2978808 Yen Cross
Yen Cross's picture

Blah, Blah! India is loading up! BTW? What happened to the Indian " off shore" parts expansian idea?

  Earth to Qualcomm?

Wed, 11/14/2012 - 00:42 | 2978828 EHM
EHM's picture

The Chinese have a great sense of "tradition."

Wed, 11/14/2012 - 00:46 | 2978836 wandstrasse
wandstrasse's picture

surpassing Germany's 3,395 tons

-> surpassing Germany's 3,395 tons OF PROMISES / LIES / TUNGSTEN... that is not so hard to accomplish / hardly worth mentioning.

Wed, 11/14/2012 - 00:51 | 2978844 Big Ben
Big Ben's picture

China owns over $1 trillion in US debt. By my calculations, that would buy about 17500 metric tons of gold @ $2000/oz. Just a thought...

The US is never going to repay its debt. But gold will always be gold.

Wed, 11/14/2012 - 01:28 | 2978907 infiniti
infiniti's picture

China owns $1 trillion in US debt like the US owns 1 million Chinese factories. Good luck collecting.

Wed, 11/14/2012 - 12:46 | 2980146 falak pema
falak pema's picture

the US oligarchs do NOT own 1 million chinese factories. They sub to 1 million chinese factories owned by chinese entrepreneurs.

Ownership is simple concept.

Wed, 11/14/2012 - 01:04 | 2978868 BobPaulson
BobPaulson's picture

Announcing: the worst kept secret in the world.

Wed, 11/14/2012 - 01:13 | 2978886 Yen Cross
Yen Cross's picture

 China is to "Africa" as United States is to "South America"...

     We need to write down debt...   In the beginning, growth was good.   Lets look at "energy". massive pork belly spending?

Wed, 11/14/2012 - 02:14 | 2978957 putaipan
putaipan's picture

mmmmm....polk berries!

Wed, 11/14/2012 - 02:44 | 2978980 Yen Cross
Yen Cross's picture

 uhhhhh ? " get to work"  BITCH! Or I'll pimp slap you!

Wed, 11/14/2012 - 01:17 | 2978887 ebworthen
ebworthen's picture

Funny.

The world producer of nearly everything now moves to the gold standard.

Wonder what Steve LIESman and the other paper tigers will say; "Gold is a barbarous relic, the U.S. will stay strong with commentary, promises, and paper fiat!"

Right Stevey boy; didn't work for the U.K. or France or Spain or Portugal or...

But nevermind, history is meaningless and "this time is different", right?

No one needs tangibles, no one needs a deed or rights to their posessions, no one needs the rule of law just the U.S.S.A. Ponzi dreamland of lies and theft, right!?!?  Stevie boy!?!?

Fucking fools, God-damned fucking dreaming somnambulent Keynesian propagandistic MSM mealy-mouthed clueless tongue-wagging intellectually challenged, hopium dream of the past addled fucking fools!!!!

Wed, 11/14/2012 - 01:20 | 2978896 Yen Cross
Yen Cross's picture

Excellent post!

Wed, 11/14/2012 - 01:22 | 2978898 infiniti
infiniti's picture

"Moves to the gold standard"

 

Uhh... THEY HAVE NO GOLD

Wed, 11/14/2012 - 02:44 | 2978981 dark pools of soros
dark pools of soros's picture

we went from gold, to oil to currently on the bomb standard.

after that, what's left?  pussy standard?

 

Wed, 11/14/2012 - 01:19 | 2978892 MsCreant
MsCreant's picture

We all assume Fort Knox is empty. What if the US was accumulating on the sly, and not telling one solitary bitch about the whole thing?

Wed, 11/14/2012 - 01:26 | 2978902 BobPaulson
BobPaulson's picture

Well, they certainly have a lot. In a complete jump from fiat to gold, the US would come out way ahead of China if the stated reserves exist. Believing the US actually has empty vaults down there is a bit of a stretch for me, probably because I know it's what I want, and I forever try to remind myself not to believe simply what I want to happen.

Wed, 11/14/2012 - 01:29 | 2978908 The Shootist
The Shootist's picture

That's as likely as Obama the Legend not being an empty suit commie fraud.

Wed, 11/14/2012 - 03:42 | 2979027 fukidontknow
fukidontknow's picture

to stack you gotta have cash left over, the US blows it all on war and banksters so probably no stack

Wed, 11/14/2012 - 09:14 | 2979330 MsCreant
MsCreant's picture

That's what is true for you and I. However, for the US, "We print, therefore we are." Just sayin'.

Wed, 11/14/2012 - 11:57 | 2979894 falak pema
falak pema's picture

That's what the two twins of Miami sang: we print our emails to the MIC big brass, who pay us back under their desks in mad gladness.

We print our scented emails but we spend more on perfume, thats why we are always in debt. God, this under the desk stuff is good for my heart but not for my bank account. 

I guess whats true for the twins is true for the US! 

Wed, 11/14/2012 - 01:20 | 2978897 infiniti
infiniti's picture

China's monetary base is the largest in the world - yet their gold reserves are among the lowest. Good luck, China.

Wed, 11/14/2012 - 01:31 | 2978912 BobPaulson
BobPaulson's picture

Yes, my point above. They are not going to poke a hole in the US Dollar any time soon if they are the second biggest counterparty to that debt. That is endgame and they can't do it until their domestic market for their goods is stronger, and the US military is looking a bit more underfunded. 20 years?

 

 

Wed, 11/14/2012 - 02:25 | 2978965 crazyjsmith
crazyjsmith's picture

20 yrs? But the US will be the world's largest exporter of oil...
Didn't you read that article? We'll be rich, bitch!!!

Wed, 11/14/2012 - 02:59 | 2978999 sitenine
sitenine's picture

+1 thanks for the smile :-)

Wed, 11/14/2012 - 08:34 | 2979247 youngman
youngman's picture

Remember China is now a Primary Dealer...Geitner gave them that status......in time we will know why....and I do not think is was for the benefit of the USA

Wed, 11/14/2012 - 02:26 | 2978966 nevket240
nevket240's picture

They have just upped the ante on the other RB's around the world including our deluded doughnutz here in OZ.

This is the legitimizing of Gold as a world currency base. This will have the Arse Puckerers at the IMF scratching their nuts about how to keep themselves relevant in a world where Sovereigns give em the finger.  I hope

regards

Wed, 11/14/2012 - 02:46 | 2978984 Yen Cross
Yen Cross's picture

 Fu..K  Big Bird! I'm Long basement babies!

Wed, 11/14/2012 - 02:48 | 2978987 Yen Cross
Yen Cross's picture

 Mrs. Creant, I'll  lay the wood! Just give me a call!

Wed, 11/14/2012 - 02:58 | 2978993 sitenine
sitenine's picture

I'd say China can afford the gold, considering their currency just hit all time highs against the dollar http://news.xinhuanet.com/english/business/2012-11/13/c_131971563.htm

China is also the worlds top producer http://en.wikipedia.org/wiki/Gold_mining_in_China

And, very little of that PHYSICAL gold ever leaves the country http://www.zerohedge.com/contributed/2012-11-04/emperor-has-no-gold

The Chinese are well positioned for a hostile takeover IMHO.  The NWO crowd would be wise to pay attention - you know what they say about the best laid plans of mice and men...

Wed, 11/14/2012 - 02:53 | 2978995 DionysusDevotee
DionysusDevotee's picture

Wheres the source?

Wed, 11/14/2012 - 03:04 | 2979002 Peter Pan
Peter Pan's picture

In the longer run there is a direct relationship between gold and human stupidity. The higher the price of gold, the higher the level of stupidity that pushed it there.

Ignorance and lies have been the medium of exchange for so long, that knowledge and truth now seem counterfeit. But not for much longer. Gold and silver are eventually vindicated. 

Wed, 11/14/2012 - 03:07 | 2979005 kedi
kedi's picture

So China is turning other country"s debt, a huge pile of it U.S. into gold. Isn't that really what they are buying it with? So when the debt chain collapses and people go looking to collect on their paper, a lot of it will have turned into gold in vaults in China. Good luck getting that back in exchange for you IOU's. So how will that work out as to the value of gold in the rest of the world? Those buying gold as a personal hedge against the collapse of fiat currency will sort of be stuck with a commodity that their country will abhor due to it's being controlled in too large a part by another country. In a chain of real economic value, will gold bought with overextended debt, stashed in China be a viable or actually valuable currency in any other country>

Wed, 11/14/2012 - 04:08 | 2979040 Yen Cross
Yen Cross's picture

SHORT RISK!

Wed, 11/14/2012 - 04:43 | 2979061 savagegoose
savagegoose's picture

yippy

Wed, 11/14/2012 - 05:12 | 2979079 q99x2
q99x2's picture

They don't need gold because of virtual currencies, which also have physical forms, now provide the same benefits as a gold based currency as well as having additional flexibility. But gold is nice because you can hold it and trade it without having to depend on any dang computers.

China is making big centrally planned decisions that typically end in disaster for those they are supposed to represent.

Wed, 11/14/2012 - 06:10 | 2979108 Alpha Monkey
Alpha Monkey's picture

bought my first bitcoins a few days ago. 

Wed, 11/14/2012 - 05:41 | 2979085 falak pema
falak pema's picture

China now will make its official entrance into the world currency game. The last ten years has seen China emerge as a world contender; witness the Peking Olympics blessed by GWB himself in dire WS meltdown.

With the NEW politburo now in place, China will rev up its monetary gear, and use the current USD crisis and surrogate Euro zone meltdown to impose itself as an alternative superstate with its own money backed up by its BRIC allies and a precious metal back up.

Can the one party crony politburo state manage this hubristic transition?

BIG QUESTION for the decades to come!

Lets for a moment give them the benefit of the doubt as the West is going south bigtime and the East is on an economic roll.

This gobal geo-strategy will be complete and official the DAY the prime commodity that makes the world go round, aka ME OIL, becomes pegged to Yuan and unpegged to USD. That day the multipolar world will have truly emerged and the hegemony of King $ and of Pax Americana military play will be over.

No more Saud and Chinese money to back up General Petraeus and Consorts hanky-panky in Iraq-Iran-Afghan sheeple bashing. All MIC hanky-panky from then on reserved on Miami sheeple bashing. 

Look ahead and see whats written in the tea leaves of the tea party stalwarts who support MIC.

Neo cons and government shills, the Alamo will now be beseiged once again. You can practically hear those trumpets play. That's what US hubris has now achieved in the tatters of its own world "clash of civilization" play. 

Meanwhile in Euro zone the banks impose the Club Med bashing of the south while the north wrings in hands knowing one day Nemesis is going to pay them also a visit. We are in tipping times. 

The true initiative lies with the Oligarchs who own the world from Caymanista land. The new Conquistadors now ready to work with whoever champions the new Habsburg world empire; whether it be DC or London City or Pekin middle kingdom.

Guns for hire and extractive empires ready to pump commodities for the new Czar/Mongol Lord of world empire! 

Whatever the monetary denomination, USD or Yuan, the MONEY line belongs to the Oligarchs, as they have the technology, the resources and the world networks in place. They are the new Medecis of this Renaissance age. Their banks, their multinationals will talk to whoever is political top dog; as he is just a debt slave of their oligarchy. Thats the price for buying rice to feed the people.

On this issue remember how this same Oligarchy breed captured the new money line of USA in 1913, when they struck a deal with the Rockafella-Morgans in Jeckyll Island and spawned the private run FED.

Nothing new to repeat what happend in London city in 1815, then in 1913 in DC/WS !

We had kings and Popes, in the last feudal age. Now we will have transnational Oligarchs and Statist Czars to share the cake. In this new global neo-feudal age, centrally planned to serve these two crony cabals.

Where are the new GWs and LAfayettes of first world? Now faced with the ruins of its "we the people" meme, from behind the tinsel curtain of imprisoned democracy and republic. Just look at how the debt mountain grows to ensure the nations' servitude all over the world.

Peak Enlightenment is the greatest betrayal of Mankind.

Wed, 11/14/2012 - 06:51 | 2979120 zerozam
zerozam's picture

I stopped reading after your third sentence..

Wed, 11/14/2012 - 07:05 | 2979126 onebir
onebir's picture

That's patience!

Wed, 11/14/2012 - 10:03 | 2979462 falak pema
falak pema's picture

I agree, I hate reading what I write, its depressing. Thats why I write on other subjects more refreshing on the side! 

But I abide by what I say, depressing on not. 

Wed, 11/14/2012 - 08:07 | 2979187 fijisailor
fijisailor's picture

"Can the one party crony politburo state manage this hubristic transition?

 

Duh yes.  Don't we in the US have a good idea how this type of govt works?

Wed, 11/14/2012 - 05:56 | 2979098 Anasteus
Anasteus's picture

Looking at the current relatively low gold price, one has to ask whether the US cronies actively support the Chinese efforts or not. The artificial price suppression managed by the comrades at JPM is exactly what China wants. Seems like Rothschilds have already grasp the fact America and dollar is virtually over shifting the focus on China and renminbi.

Wed, 11/14/2012 - 08:02 | 2979183 youngman
youngman's picture

I think that was part of the deal that Geitner made 3 years ago when he went over there....he guaranteed a price range for China...IMHO

Wed, 11/14/2012 - 06:06 | 2979105 Freegolder
Freegolder's picture

Could we have a link please, search of Bloomberg and google turns up nothing for me. Thanks.

Wed, 11/14/2012 - 07:32 | 2979158 slackrabbit
slackrabbit's picture

And remeber China does NOT export its mined gold!!!

 

 Max Keiser interview where guest Dominic Frisby makes a comment regarding Chinese gold bars (ref 20:30-21:15):

 

(edited for clarity) "... I had dinner about a year or two ago with the head of Gold at HSBC and one of the things that he described — and most of the world's gold goes through HSBC, at some stage — looking at the gold in his vault ... despite the fact that China is the biggest producer - he never sees bars, with Chinese stamps on them ...

youtube here: http://youtu.be/RjQu9qFpStw?t=20m9s

 

Database confirms Max Keiser Guest statement (updated x 2)

http://screwtapefiles.blogspot.co.uk/2012/10/database-confirms-max-keise...


 

Wed, 11/14/2012 - 08:50 | 2979273 Anasteus
Anasteus's picture

Another possibility is all the gold the dude sees in the HSBC vaults is Chinese gilt tungsten bars with stamps faked too.

Wed, 11/14/2012 - 07:38 | 2979164 negative rates
negative rates's picture

The empty wearhouse is still considered the greatest holder of gold. I wish people could show more proof before assuming such vast quantities and then concurrently selling that position with a fiat paper product. Trust yes, but verify!

Wed, 11/14/2012 - 07:50 | 2979167 spanish inquisition
spanish inquisition's picture

Well, that is good news for the (petroless) dollar survival!

When the SHTF there will a stable currency to peg to!

Edit: Can I get a "Irony Bitchez!" holla.

Wed, 11/14/2012 - 08:00 | 2979177 Monedas
Monedas's picture

Coming out of the closet about their gold plans .... defuses speculation and rumors .... disarming the alarmists .... provides calm reassurance and cover .... while they continue to hoard like MADMEN !   This is damage control for hoarding they can no longer deny !

Wed, 11/14/2012 - 08:00 | 2979180 youngman
youngman's picture

"China can build its reserves by buying low and selling high amid the short-term volatility, "

Interesting quote....

Buying low I understand..from us..the stupid west with our or their HFT´s computers that can tank the price....

now the "Selling"....SELLING..to me that means the tungsten gold they have produced for us stupid westerners...I do not think I would buy gold from China at this point....

Wed, 11/14/2012 - 08:05 | 2979184 Monedas
Monedas's picture

Pt can't be faked with tungsten .... it's 10% heavier than Au and muck (much) rarer .... I'd say Pt is a buy !

Wed, 11/14/2012 - 08:22 | 2979215 Snidley Whipsnae
Snidley Whipsnae's picture

Youngman... It's difficult to know what was lost in translation.

Perhaps the speaker meant that China is playing the paper gold game to aquire easy profits to purchase physical?

Perhaps the speaker meant that China's soverign wealth fund is aquiring low to sell to the PBoC at a profit?

Some other fu in translation?

I also found that comment odd.

Wed, 11/14/2012 - 08:37 | 2979235 Monedas
Monedas's picture

Think like a liberal !  They may be playing their "Oh, shucks, we are NOT very sophisticated !" card .... to play down their deadly earnest hoarding ?

Wed, 11/14/2012 - 08:09 | 2979191 orangegeek
orangegeek's picture

Funny how we hang off every word when it suits our opinion.

 

Remember folks - communists.  State run everything.  The truth is what the states says no matter what the truth is.

 

So China wants to buy up all this gold.  Great.  And you believe them?  Great.

 

The US Dollar transacts in 60% of global trade.  The Euro is second.  So the US will just politely let the Juan take things over.

 

Gold backed currency or military backed currency??

Wed, 11/14/2012 - 08:23 | 2979202 Monedas
Monedas's picture

I wish the US would keep adding to it's stack and even encourage it's citizens to do the same !  We should use a little of all the fiat we've created to buy some gold insurance ? How about Obamy and Bernanky doing a commercial for the U.S. Mint ?

Wed, 11/14/2012 - 08:17 | 2979204 DowTheorist
DowTheorist's picture

The gold/dow ratio has turned bullish on Nov 7, this has long term bullish implications for gold. Certainly not a good omen for stocks. More about it here:

 

http://www.dowtheoryinvestment.com/2012/11/dow-theory-update-for-nov-8-s...

Wed, 11/14/2012 - 08:19 | 2979210 fijisailor
fijisailor's picture

So the biggest coin counterfeiters and probably bar couterfeiters in the world may have 6000 tons.  6000 tons of what?  No one could ever reliably believe anything the Chinese say no matter how much they import or produce

Wed, 11/14/2012 - 08:24 | 2979223 Snidley Whipsnae
Snidley Whipsnae's picture

"No one could ever reliably believe anything the Chinese say no matter how much they import or produce"

Do you believe what any banker or pol says?

Wed, 11/14/2012 - 08:35 | 2979250 fijisailor
fijisailor's picture

Uh no, nor our govt either

Wed, 11/14/2012 - 08:40 | 2979260 youngman
youngman's picture

I am sure the Party´s gold is good gold...now the stuff they sell to us...that is suspect...but you die if you shortchange the Communist Party...period

Wed, 11/14/2012 - 08:48 | 2979272 fijisailor
fijisailor's picture

So their "party"  is much more reliable than our"party".

Wed, 11/14/2012 - 08:42 | 2979243 Monedas
Monedas's picture

Gold is part of the Chinese DNA .... Gold trumps Communism !   The lovely Arafat amassed quite a private fortune from the Palestinians .... I imagine some of those Chicom leaders have substantial hoards .... despite socialist protocols !

Wed, 11/14/2012 - 08:45 | 2979269 Quinvarius
Quinvarius's picture

The Western moron bankers have had enough warning to get out of the way or be destroyed from China.

Wed, 11/14/2012 - 09:01 | 2979297 fijisailor
fijisailor's picture

The western moron bankers will put money in their own private pockets assisting their own destruction.  There's no honor among thieves.

Wed, 11/14/2012 - 08:56 | 2979279 Monedas
Monedas's picture

You just know that "Ben Bern Banky" has his private hoard !  He probably buys his own dips ?

Wed, 11/14/2012 - 09:05 | 2979305 poldark
poldark's picture

I wonder if the UK could buy back the gold Brown sold at $230 oz?

Wed, 11/14/2012 - 12:01 | 2979902 Bansters-in-my-...
Bansters-in-my- feces's picture

*Gao smart man.

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