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Chinese Gold Imports Soar To Monthly Record On Insatiable Demand

Tyler Durden's picture




 

In what must be an inexplicable move to momentum-chasers everywhere, as gold continued to decline in price in March, and long before its targeted smash in April, China was not backing off its gold purchases of the yellow product. Quite the contrary: as export data released by the Hong Kong Census and Statistics Department overnight showed, Chinese gold imports in March exploded to an all time record high of 223.5 tons. This follows 97.1 tons in February, and brings the total imports for the first quarter of 2013, or 372 tons, on par with what China imported in the entire first half. It also means that since January 2012, China has imported an absolutely stunning 1,206 tons of gold. Putting this number in context, this is 20% more than the entire reporter official gold holdings of 1054 tons, and represents roughly half of the total 2500 tons of gold mined every year (a number which is set to decline as gold miners find current prices unsustainable and are forced to shut down production).

Comparison of Chinese gold imports: 2012 vs 2013:

And sequential change in Chinese gold imports since January 2012 or when the gold fever in China was truly unleashed:

The latest official Chinese holdings:

And if March was a record month for China, we can't wait for April when prices plunged and when physical buyers, who unlike paper momentum chasers buy more then lower the price falls will see the recent take down as a buying opportunity (if they can find physical of course). From Reuters:

Chinese gold imports are likely to swell further after more than doubling to an all time high in March as retail consumers pounced when prices plunged to a two-year low last month.

 

"Physical demand picked up significantly over the last couple of weeks. Consumers and industrial users tend to see price drops as buying opportunities," Zhang Bingnan, secretary-general of the China Gold Association, told Reuters.

 

"Investment demand should continue to stay strong through the rest of the year because of limited investment alternatives," said Zhang, adding that gold sales and processing volumes both spiked in April.

 

"April imports will be stronger than March," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The world was buying gold and China was no different at all."

And therein lies the rub: because if China fails to mask the ongoing soaring hot money inflows as reported earlier, and which amounted to over $180 billion in q1 as reported earlier, just watch as Chinese demand for physical goes truly off the charts.

The rest of the story is well known but here it is from Reuters:

In March, Shanghai gold futures fetched premiums of more than $30 to global prices, making it cheaper to buy the metal overseas.

 

April could see imports swell further after the drop in international prices spurred frenzied buying in Asia, leading to a shortage of gold bars and coins in Singapore as well as Hong Kong, which is China's main source for gold imports.

 

The drop in prices has prompted a gold rush in China, with Chinese shoppers flocking to retailers to buy jewellery and bars.

 

A spokesman for Hong Kong jewellery chain Chow Tai Fook, the world's largest jewellery retailer by market value, told Reuters that traffic at its China stores jumped by 50 percent during the May Day holidays.

 

The surge in Chinese travellers during the three-day May Day holiday also drove gold sales in Hong Kong to rise by an estimated 50 percent, with total gold sales from April 29-May 2 reaching some 40 tonnes, local media quoted Haywood Cheung, president of the Hong Kong Gold and Silver Exchange, as saying.

 

The jump in Chinese physical demand also prompted some banks to ship in more supplies from London and Swiss vaults, traders said.

What about New York vaults? And specifically the biggest gold vault in the world, located 90 feet below 1 Chase Manhattan Plaza?

Or is there maybe a correlation between the record drawdown in JPM's commercial holdings and the record break out of Chinese gold fever? We hope to find out soon.

As for the increasingly irrelevant spot price of gold paper derivatives, we can only hope "experts" like Paulson et al can continue their liquidation of gold ETF "holdings" for as long as possible: after all one can buy far more gold more when the price is lower, not higher.

 

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Wed, 05/08/2013 - 09:32 | 3540659 LawsofPhysics
LawsofPhysics's picture

So many paper promises to deliver, so little real assets (physical gold).  Applies to many aspects of the current eCONomic system.  Now about that pension...

Wed, 05/08/2013 - 09:34 | 3540668 Pladizow
Pladizow's picture

-_- say, "We so solly we take all round eye gold."

Wed, 05/08/2013 - 09:40 | 3540689 Agent P
Agent P's picture

"You see Mr. Powers, I rove gooooorrrrd!!!"

Wed, 05/08/2013 - 09:49 | 3540710 AllThatGlitters
AllThatGlitters's picture

 

Gold already ripping higher this morning.

 

Short-Squeeze Starting? Check out the live price: 

http://www.pmbull.com/gold-price/

Lately, I've been reading a lot of capitulatory comments from former gold longs, backslapping from gold skeptics and breathless reports from agnostic TA folks that the gold bull is over. This was the best signal that gold was gonna head higher.

Yet, gold bars on that page are *still* available and *still* at just $25 over spot. Unlike silver, retail can still get in on the act.

Wed, 05/08/2013 - 09:49 | 3540732 nope-1004
nope-1004's picture

Ya, price controls work!  LOL.

 

Wed, 05/08/2013 - 10:43 | 3540774 Abraxas
Abraxas's picture

The plan is to sell all of our gold to Chinese and Indians, then decide that they have WMD and that they use biological and chemical weapons against their own people; we'll then liberate their people and liberate them from the gold that we just sold them. Hell, we can do it again and again...

Wed, 05/08/2013 - 11:34 | 3541273 cynicalskeptic
cynicalskeptic's picture

unless we go broke first and can't pay for the oil that runs our War machine....  for a time the military might of the US may serve to forestall complete collapse  but despite the dreams of neocons, it will NOT make it possible for the US to dominate the World for another 50 years, insuring that the US gets first in line access to energy and raw materials.  Worked out REAL well in Iraq and Afghanistan.......

We're trying desperately to contain China's growing power and influence (look at the expansion of US troop presence in Africa) but being blunt - they outnumber us, and have a far larger productive capacity when it comes to making things.

The US Empire is not healthy.   As the $US is used less and less as the currency of trade, it's value drops more and more.  The old days of printing more $US when you needed to buy things is going fast.  Now printing more $US only means the price you have to pay is going to be higher.  The rest of the world has caught on to the game.

History has shown that nations and empires grow and then collapse.  Nobody is exempt from that evolution.

And as for China's gold holdings...... wanna bet they're holding FAR more than 1000 odd tonnes?      It's in China's interest to NOT have the price go up and to NOT have the rest of the world be aware of what they have and how fast they're accumulating - UNTIL Chiuna has converted over the $US they hold into gold and other hard assets and is ready for a reset in the world trade model.   That reset is already happening slowly with nations negotaiting direct exchange agreements.  Tha day of the $dollar as the medium of exchange for all world trade is coming to an end.

Wed, 05/08/2013 - 11:45 | 3541320 Shevva
Shevva's picture

I'm thread jacking cause the Chinese are hiding more than bad data.

http://www.thesun.co.uk/sol/homepage/news/4919629/chinese-authorities-tr...

Wed, 05/08/2013 - 12:33 | 3541340 Pinto Currency
Pinto Currency's picture

 

With these levels of monthly physical gold delivery at the Shanghai Gold Exchange, there must  be other sources of Chinese gold than Hong Kong.

http://www.goldminerpulse.com/v/shanghaiGoldExchangePhysicalDelivery.php

 

What prevents Chinese interests from standing for delivery with GLD shares that they purchase?

Aircraft from London and Switzerland can land in Shanghai as well as Hong Kong.

A quick search yields the following:

 

Are there other routes to import gold other than Hong Kong?

http://www.thechinamoneyreport.com/2012/08/16/chinese-gold-imports-hit-383-tons-so-far-in-2012/

"D.Collins

August 16, 2012 at 3:07 pm

Hi Jerome-
From my understanding, Hong Kong is the only hub of gold imports.
But….we know China has access to obtain gold through unofficial channels.
For instance, sov. wealth funds, large commercial banks, etc…
Every few years or so they all of a sudden announce a huge increase in reserves.

Reply Ali August 20, 2012 at 2:53 pm

Hi,

An African investor told me every now and then Chinese Navy ships will dock in a friendly Afrcan port, offloading miltary supplies and load up the physical gold. This lends great weight to what MrCollins has said in his comment.

Ali

 

---------AND--------

http://www.gold-prices.biz/home/chinas-gold-imports-do-we-really-know-the-quantities.html

The Hong Kong Statistics Department reported that China imported 102,779 kilograms of gold from Hong Kong in November, an increase from October’s 86,299 kilograms. This is usually a reliable source of information regarding transactions between the two party's. However, are we to assume that Hong Kong is the one and only supplier of gold to China. Do we really expect that the Chinese, who are intent on building up their gold reserves, would go to just one shop? We doubt that very much, hence the cloak of secrecy surrounding Beijing when it comes to much matters.

Wed, 05/08/2013 - 09:51 | 3540738 TeamDepends
TeamDepends's picture

What if it's true that Europe's wealthiest families are all seeking to take custody of their large bars?

Wed, 05/08/2013 - 10:51 | 3541065 Herd Redirectio...
Herd Redirection Committee's picture

Then the only people's gold whose gold will remain unallocated will be the avg man's gold.

Wed, 05/08/2013 - 21:32 | 3543305 FEDbuster
FEDbuster's picture

Except mine and most of the posters here at ZH.  Ours is either in our gun safes or at the bottom a lake somewhere.

Wed, 05/08/2013 - 09:56 | 3540773 BobPaulson
BobPaulson's picture

If you mean its return to the price it was at Monday, yeah, I saw that. Keeping it real here. I will break out the champagne when it reestablishes the ramp it was on before the pummeling it has taken over the past two years.

Wed, 05/08/2013 - 10:01 | 3540805 Ignatius
Ignatius's picture

The thing to watch out for is if we lose (already lost/losing?) the Comex/LBMA as a reliable price signals. 

FOFOA predicts a crash in the paper price of gold only to re-emerge in physical-only trading at massively higher prices.

Be ready.  Anything can/will happen.

Wed, 05/08/2013 - 10:25 | 3540923 Meat Hammer
Meat Hammer's picture

Agreed.  I have some toilet paper with pictures of dead presidents on hold for just such an occassion.  

Wed, 05/08/2013 - 11:00 | 3541092 TeamDepends
TeamDepends's picture

Ours has some live presidents on it as well.  Oh wait, you're talking about cash....

Wed, 05/08/2013 - 12:16 | 3541430 Pinto Currency
Pinto Currency's picture

 

FOFOA's idea is a  neat idea, however there is more gold trading in the world than on the Comex.  The physical gold off-take would be enormous from London, Mumbai, Dubai, Shanghai, Hong Kong, etc. and the markets do not operate in isolation.  There is this thing called the internet now.

Wed, 05/08/2013 - 11:09 | 3541158 Herd Redirectio...
Herd Redirection Committee's picture

Nucleo Direct, bitches.

If that isn't the closest proxy for an unmanipulated Comex/LBMA I don't know what is.

Wed, 05/08/2013 - 11:36 | 3541283 cynicalskeptic
cynicalskeptic's picture

Just try and use it for TP and you'll be snaking out your waste pipes for a LONG time.  Bank notes make for LOUSY toilet paper unless you're using an outhouse over a pit (and even tehn, they're not so soft.

Wed, 05/08/2013 - 12:10 | 3541413 DoChenRollingBearing
DoChenRollingBearing's picture

Ignatius

You wrote: "Be ready.  Anything can/will happen."

Yes, quite correct.  FOFOA's prediction looks benign in print, but when we see the paper price go down, even thos of us with strong hands holding physical Au start feeling queasy...

Wed, 05/08/2013 - 14:28 | 3542016 Ignatius
Ignatius's picture

Exactly.

Wed, 05/08/2013 - 10:02 | 3540808 ParkAveFlasher
ParkAveFlasher's picture

Yeah but tomorrow will be back down again. 

Bury it in a time capsule already.

Wed, 05/08/2013 - 09:49 | 3540735 whirling tword ...
whirling tword freedom's picture

You American have such a rarge penis!... It's sooooo rarge.   Very rarge penis.

Wed, 05/08/2013 - 09:40 | 3540695 new game
new game's picture

not sure i believe what china says...

Wed, 05/08/2013 - 09:48 | 3540729 Keynesian Mess
Keynesian Mess's picture

This is one they would probably lie about to the downside, not the upside.

Wed, 05/08/2013 - 12:12 | 3541418 DoChenRollingBearing
DoChenRollingBearing's picture

That is my suspicion as well.  I have read that they may have much more than they say.

Wed, 05/08/2013 - 10:23 | 3540920 fuu
fuu's picture

I was just coming in to say that the perceived quality of Chinese data releases depends mostly on confirmation bias.

Wed, 05/08/2013 - 10:11 | 3540860 fattail
fattail's picture

Ironically, the chinese invented paper money; so i guess it is no suprise they understand its intrinsic value.

Wed, 05/08/2013 - 10:49 | 3541055 CrazyCooter
CrazyCooter's picture

False. If people actually LEARNED from history, the global society we would have right now would be orders of magnitude more advanced than this mess.

People have to live it in order to learn it, thus the cycle of stupidity.

Regards,

Cooter

Wed, 05/08/2013 - 09:53 | 3540763 Bokkenrijder
Bokkenrijder's picture

Of course there are lies, big lies and Chinese/HK statistics!

Wed, 05/08/2013 - 10:33 | 3540957 DosZap
DosZap's picture

AND for the SECOND month India pulls in another 100 tons, 2 months in a row.AND, 600 Tons of Silver!.

Wed, 05/08/2013 - 09:33 | 3540660 Cognitive Dissonance
Cognitive Dissonance's picture

2013.....The Chinese Year of the Golden Barbarous Relic

<And 2014 and 2015 and 2016 and.....>

Wed, 05/08/2013 - 09:32 | 3540662 EscapeKey
EscapeKey's picture

Yes, but how much paper did they import?

Wed, 05/08/2013 - 09:34 | 3540669 LawsofPhysics
LawsofPhysics's picture

They are printing yuan as well.  The Chinese people have been here before, they know inflation all too well.

Wed, 05/08/2013 - 09:44 | 3540720 EscapeKey
EscapeKey's picture

I was being facetious. I guess I should add the "/s" next time.

Wed, 05/08/2013 - 09:52 | 3540754 gmak
gmak's picture

In fact, that is why the communists were first able to get a foothold - because the mandarins (ruling elite - sound familiar?) engaged in self-serving practices that led to rampant inflation and ubiquitous poverty in the populace.

Wed, 05/08/2013 - 09:34 | 3540671 Cognitive Dissonance
Cognitive Dissonance's picture

They will import as much paper as can be converted into Gold and Silver and not a single toilet tissue more.

Wed, 05/08/2013 - 09:58 | 3540785 BobPaulson
BobPaulson's picture

The true finesse is converting paper to physical without calling "fire!". One trick is to not export a single flake of domestic production and keep that unreported.

Wed, 05/08/2013 - 10:53 | 3541073 CrazyCooter
CrazyCooter's picture

Yeah, that is probably while Kyle Bass didn't take the advice I emailed him to convert his gold purchase a couple years back into a "Golden Bevo" and roll it out at all the home UT football games.

He probably bought more and didn't tell anybody instead. Kyle is a clever dude!

Regards,

Cooter

P.S. What ever happened to their attempt to get the physical bullion. Wasn't that part of what ol' Perry was shooting his mouth off about? I haven't been in TX a couple years now, totally out of the TX news loop.

Wed, 05/08/2013 - 11:38 | 3541290 cynicalskeptic
cynicalskeptic's picture

"They will import as much paper as can be converted into Gold and Silver and not a single toilet tissue more."

 

Those paper $US are still very useful for buying up mining companies, farmland in Africa and long term energy contracts.   China is being astute in converting paper promises into hard assets.

Wed, 05/08/2013 - 14:41 | 3542062 Kirk2NCC1701
Kirk2NCC1701's picture

Speaking of "being astute"... Why do I have to point out the obvious:  The math does not add up! 

The US has 8100 tons and this represents 75% of reserves, but China's 1100 tons represent 1.6%?   Oooookaaay. ROTFL.

Wed, 05/08/2013 - 10:04 | 3540824 augustusgloop
augustusgloop's picture

huge amounts of scrap paper!  sad. we sell scrap to china, they add value and sell it back to us:

http://www.cnbc.com/id/44716908

Wed, 05/08/2013 - 11:18 | 3541205 Stuck on Zero
Stuck on Zero's picture

One thing for sure. Chinese products go from the showroom to scrap yard incredibly fast. 

 

Wed, 05/08/2013 - 09:33 | 3540663 Shell Game
Shell Game's picture

And the US remains a net gold exporter.  Yes, this will end well...

Wed, 05/08/2013 - 09:35 | 3540675 EscapeKey
EscapeKey's picture

Well, Archduke Bernanke has with his profound wisdom declared that gold is not money.

What, do you suggest he's got his head up his arse?

Wed, 05/08/2013 - 09:40 | 3540698 Shell Game
Shell Game's picture

It seems that is where he mines his nuggets of wisdom..

Wed, 05/08/2013 - 09:43 | 3540712 Kayman
Kayman's picture

Well, we had a BigMac eating President owned by the Chinese, why not Bernanke ?  After all, loyalty and fidelity to country is now in the free market.

Wed, 05/08/2013 - 11:26 | 3541242 Quinvarius
Quinvarius's picture

Well if he had not lied, and he had said gold is money, JPMs super whale trade would have ended them within 24 hours.  The situation is so bad these guys have lie like Madoff about everything.

Wed, 05/08/2013 - 13:05 | 3541646 Kirk2NCC1701
Kirk2NCC1701's picture

"And the US remains a net gold exporter.  Yes, this will end well.."

... for (a) China and (b) Goldman Sachs and their growing Chinese operations. 

Got the picture, ZH?  Any tentaculous questions?

Wed, 05/08/2013 - 09:34 | 3540666 rehypothecator
rehypothecator's picture

China: 372 tons, 1Q 2013.  Germany: 350 tones: "That will take seven years."  

Wed, 05/08/2013 - 09:36 | 3540677 The Abstraction...
The Abstraction of Justice's picture

Chinese bullion lorries have titanium hulls and are made by Mercedes. German bullion lorries have hulls of compressed baby food and are made by Ching Chang Ghong Ltd.

Wed, 05/08/2013 - 21:18 | 3543270 Crisismode
Crisismode's picture

 

 

What the hell is a lorry?

Only ships and boats have hulls, from what I've heard.

Titaniam hulls on any size boat would price the damn thing out of the market.

 

 

Thu, 05/09/2013 - 07:31 | 3543900 The Abstraction...
The Abstraction of Justice's picture

British for truck.

Wed, 05/08/2013 - 09:37 | 3540683 EscapeKey
EscapeKey's picture

"will" might mean "might" given a CME force majeure.

Wed, 05/08/2013 - 09:38 | 3540688 Debugas
Debugas's picture

the difference is - china is paying for its gold whereas germany wants to get it for free

Wed, 05/08/2013 - 09:44 | 3540719 new game
new game's picture

ha, hey germany; got gold yet? yeh, the real stuff - 24K bars.

think they got stiffed?

benank to merkel: we will print ya up some up real soon...

Wed, 05/08/2013 - 10:10 | 3540856 krispkritter
krispkritter's picture

The FED is still buying tungsten fakes from China to send to Germany...once production ramps up I'm sure the 8k tons of US 'gold' will materialize...

Wed, 05/08/2013 - 11:15 | 3541188 Herd Redirectio...
Herd Redirection Committee's picture

Tungsten prices are up 50% since 2011.  Wonder what the new industrial use is?

On another note, in my mind there is the possibility for a nightmare scenario tp unfold where enemies of gold and silver flood the market with counterfeits.  And everything will have to be assayed just to prove purity.

It will add to transaction costs, create uncertainty, reduce people's willingness to barter in exchange for PMs (unless they can prove purity).  Its also a serious crime, but when has that ever deterred the scumf*cks in charge.

Wed, 05/08/2013 - 12:06 | 3541404 SamuelMaverick
SamuelMaverick's picture

Gold testing and assaying is simple and easy. Testing is not an issue.

Wed, 05/08/2013 - 12:48 | 3541571 Herd Redirectio...
Herd Redirection Committee's picture

OK, but it still adds transaction costs/time to the transaction, right?  What is the time cost for assaying, say, a 100 oz bar, 1000 oz bar and 1 oz coin?

Counterfeiting/debasing was common as all hell back in the day, and people still were able to transact using precious metals, so you are right, it shouldn't be too great of a concern.

Wed, 05/08/2013 - 21:21 | 3543277 Crisismode
Crisismode's picture

 

 

There are very simple and effective weight/measure/volume tools for assessing known value common bullion coins.

 

There is no need to assay common bullion coins.

 

Wed, 05/08/2013 - 09:46 | 3540724 Kayman
Kayman's picture

Perhaps the German gold could be used as a down payment for the free protection they have received for the past 68 years.

Wed, 05/08/2013 - 09:55 | 3540769 gmak
gmak's picture

Earth to USA:  No one wants your 'protection'.  Go away.  I'm sure the Romans thought they were providing protection with their military outposts in their empire as well.

Wed, 05/08/2013 - 09:58 | 3540790 tarsubil
tarsubil's picture

Nah, I think the Romans were a little more honest about being an empire.

Wed, 05/08/2013 - 09:58 | 3540782 tarsubil
tarsubil's picture

So true. Those peace loving Germans would have never been able to defend themselves without our help. Just like how we won WWII and not the Russians on the much larger eastern front.

Wed, 05/08/2013 - 11:18 | 3541206 Herd Redirectio...
Herd Redirection Committee's picture

You know the Russians dressed civilians up in military uniforms and used that as diversionary forces?  I think their contribution (those slaughtered civilians) has been largely undervalued, or even completely unappreciated, by students of history (in the West, any way).

Sometimes you were sent out without a gun.  "I don't have a gun"

"Don't worry, you can pick one up along the way"

Meaning... Off a corpse, when you get real close to the front line.

Wed, 05/08/2013 - 11:50 | 3541335 Buckaroo Banzai
Buckaroo Banzai's picture

Yeah, but we did give them someone to surrender to who wouldn't send them to die in a uranium mine in Siberia

Wed, 05/08/2013 - 10:08 | 3540842 forwardho
forwardho's picture

It was!

Wed, 05/08/2013 - 15:13 | 3542191 NoClueSneaker
NoClueSneaker's picture

Häääää ? "Free protection " ???? Germany pays cash for its own occupiers - till today ...

And after all - the most of the "german" gold in the vaults of Liberty Street 33 is the gold of the German Reich, FRG is not a legit owner, doesn't even have an constitutuion . 1200 T stay by the NY Feds after 2020 .

Germany is an WS-Vassal state and an EU-Trojan ... Q.E.D.

Wed, 05/08/2013 - 09:46 | 3540726 EscapeKey
EscapeKey's picture

get it for free? the fuck?

they are storing it externally. how does asking for it back in any way equal "get it for free"?

 

Wed, 05/08/2013 - 09:49 | 3540737 Shell Game
Shell Game's picture

+1   He's from the future, where possession is ownership.

Wed, 05/08/2013 - 10:51 | 3541064 Urban Redneck
Urban Redneck's picture

If the Germans were half as smart as they think they are- they would have borrowed a few billion of the free-Bernanke bucks that are parked in German Banks and done the expedient thing, and then swapped the paper IOU back to FRBNY at a later date.

Wed, 05/08/2013 - 09:49 | 3540736 thefedisscam
thefedisscam's picture

Rubbish! German just asking their OWN gold BACK kept by the U.S.!

Wed, 05/08/2013 - 11:41 | 3541301 cynicalskeptic
cynicalskeptic's picture

They'd have had a better shot at buying it back on the open market than waiting for the US to 'repay' it.  

Wed, 05/08/2013 - 10:05 | 3540829 augustusgloop
augustusgloop's picture

yes but Cyprus's 10 tons will flood the market...that's the story, right?

Wed, 05/08/2013 - 14:54 | 3542134 Kirk2NCC1701
Kirk2NCC1701's picture

"China: 372 tons, 1Q 2013.  Germany: 350 tones: "That will take seven years."  

Have you ever noticed that suddenly things make perfect sense when you have the vital piece of info, or your paradigm shifts?  Well, your paradigm (and that of your friends) will shift when you learn that the Fed-led Federation will NOT anchor to gold, but go to SDRs.  Whereas the BRIC+ countries will anchor to gold.  Your stack of PM won't mean 'shit', unless you move out of the FED-zone.  

The other piece of useful fact you need to think about, is that 187 countries have Central Banks (CBs).  That use fiat.  The only ones that didn't/don't, were/are:  Afghanistan, Iraq, Egypt, Lybia, Syria, Iran, N.Korea.  See a pattern here?

Sorry for the band news.  But BTFD, Keep Stacking and ... junk the messenger anyway, if it makes you feel better.

Wed, 05/08/2013 - 09:34 | 3540667 The Abstraction...
The Abstraction of Justice's picture

The central banks, and the entire political and legal system that support them, in Europe and the USA are all guilty of treason, defrauding their peoples of precious metal and giving it to hostile foreign powers.

Wed, 05/08/2013 - 11:09 | 3541160 Bam_Man
Bam_Man's picture

But Bernanke says it's "not money" and the (supposedly) wise, old geezer Buffett calls it a "lump of metal". So if they want it, let them have it!

 

Wed, 05/08/2013 - 13:13 | 3541615 Pinto Currency
Pinto Currency's picture

 

Bernanke: Gold and silver aren't money but are simply a tradition.  I quit.

Wed, 05/08/2013 - 09:35 | 3540678 holdbuysell
holdbuysell's picture

Why are they buying?

Just ask The Federal Reserve Chairman:

"It's tradition."

/sarc

Wed, 05/08/2013 - 09:36 | 3540681 Temporalist
Temporalist's picture

Is this an inverse chart to CNBS viewership?

Wed, 05/08/2013 - 09:38 | 3540687 Hulk
Hulk's picture

The paper holders are starting to figure out the game. The conversion to physical will be an interesting show to watch...

Wed, 05/08/2013 - 09:42 | 3540706 Cognitive Dissonance
Cognitive Dissonance's picture

I suspect it will play out along the lines of spontaneous combustion. One minute there is just some heat and maybe a little smoke, the next a roaring inferno.

<Better not be in the back of the plane when it goes cus you won't get out in time.>

Wed, 05/08/2013 - 09:52 | 3540757 Hulk
Hulk's picture

The 100th monkey has just learned how  to wash his coconut...

Wed, 05/08/2013 - 10:02 | 3540811 krispkritter
krispkritter's picture

I assure you my 'coconuts' are very clean, thank you very much...

 

Wed, 05/08/2013 - 10:13 | 3540851 Tinky
Tinky's picture

Reminds me of an old, often amusing, irrepressible friend who, when once asked in a public lavatory why he washed his hands before using the urinal, responded with a burst of laughter, followed by "I know my dick is clean!".

Wed, 05/08/2013 - 11:46 | 3541323 Hulk
Hulk's picture

This monkey washes his hands before using the bathroom for Mrs Hulk's sake...

Wed, 05/08/2013 - 09:58 | 3540781 eclectic syncretist
eclectic syncretist's picture

The COMEX has went from having 100 tonnes of registered gold to 64 tonnes over the past 15 trading days.  If this article is correct, then China is importing the equivalent of the entire COMEX registered inventory EVERY WEEK!

That should bring into clearer focus exactly how close this paper/physical farce is to falling apart.  It could literally fall apart at any moment now.

And another thing, another two tonnes of gold left the COMEX warehouses today.

Wed, 05/08/2013 - 09:39 | 3540693 dbach
dbach's picture

remember the last commodity that the Chinese were hoarding? Cotton. That didn't go too well.

http://finviz.com/futures_charts.ashx?t=CT&p=w1

Wed, 05/08/2013 - 09:41 | 3540702 LawsofPhysics
LawsofPhysics's picture

Cotton farmers beg to differ with you.

Wed, 05/08/2013 - 09:41 | 3540703 SheepDog-One
SheepDog-One's picture

8,000 tons of gold...yea sure, U.S.A. we believe you.

Wed, 05/08/2013 - 10:09 | 3540843 Ignatius
Ignatius's picture

No audits nor accountability.  It's a kind of theme these days.  Usama 'killed' but no pics, no evidence, no body and with the deaths of a number of Seal Team 6 members, no witnesses.  Faith based facts and news.

Wed, 05/08/2013 - 11:37 | 3541284 Herd Redirectio...
Herd Redirection Committee's picture

Crazy thing about that story is,  I heard the helicopter crashed shortly after takeoff, killing many of the Seals on the spot

So probably the mission was, go in and shoot SOME GUY living at the complex, literally, any guy, preferably with a beard.  When you find out its not Bin Laden take the body any way (under orders), and get out of there (by Heli, same as you came).  

Now the covert ops who organized the mission knew they can't have these guys be 'living heroes' who get asked all kinds of questions about assassinating Osama, because one will crack, discrepancies will emerge, etc.

So the helicopter has been rigged with explosives, or just a small charge close to a fuel tank.  The Seals get back on the helicopter to get out of there, thinking "That wasn't Osama, what the hell, this stinks" and 3 seconds later, BOOM, the helicopter explodes, killing most of the SEALs.

When its reported, though, its reported as if the helicopter crashed, and the seals lived.  Only to then die in ANOTHER helicopter crash 4 or 6 weeks later.  The 2nd helicopter crash was just a cover story, those bodies were already in the morgue, IMO.

Wed, 05/08/2013 - 13:26 | 3541722 Ignatius
Ignatius's picture

And a compliant corporate media that will not investigate any of it....

Wed, 05/08/2013 - 11:08 | 3541155 USGrant
USGrant's picture

The last GAO letter in 1975 admits only about 746 tonnes of good delivery if the 24 million oz stated is taken as troy ounces. [http://www.lewrockwell.com/orig11/weber-c1.1.1.html

Wed, 05/08/2013 - 15:09 | 3542171 Kirk2NCC1701
Kirk2NCC1701's picture

And yet you believe the math... that Amerika's 8100 tons = 75% of reserves, and China's 1100 tons = 1.6% of reserves.

No wonder the US is #29 in the world for math skills. /s  You guys may want to watch the PBS program of TED talk series.  Last night's episode - to be repeated today -- was about EDUCATION.  Had Bill Gates on it as one of the Ted speakers.  Watch it, you'll learn something.

Wed, 05/08/2013 - 21:32 | 3543303 Crisismode
Crisismode's picture

 

 

Anyone listening to Bill Gates talk is drinking the Kool-Aid.

Keep listening, and keep drinking.

 

Wed, 05/08/2013 - 09:43 | 3540714 web bot
web bot's picture

At this rate within 3 years, they will over take the US in gold reserves.

Make no mistake, the Chinese follow ZH and other websites and have caught on to the PM farce... Once they have secured the same amount of gold as the US... this and other factors position them to challenge the US dollar as default currency...

When they start to trade in Renimbi only with major trading partners, the world wakes up one morning and has a new reserve currency... then watch how gold and silver rise...

Wed, 05/08/2013 - 11:03 | 3541124 Winston Churchill
Winston Churchill's picture

Are you basing that 3 years on the HK figures  ?

They do not publish direct gold import figures, or their own gold production numbers.

Truth is, we have no idea how much they are buying ,or have already got.

Wed, 05/08/2013 - 09:45 | 3540721 SheepDog-One
SheepDog-One's picture

What does any of this gold talk matter anyway? We got another +10 on the S&P 15 minutes after the open, buy stawks like everyone else does daily or you're just a nerd.

Wed, 05/08/2013 - 10:32 | 3540965 Meat Hammer
Meat Hammer's picture

Chicks dig the long position.

Wed, 05/08/2013 - 09:45 | 3540722 fonzannoon
fonzannoon's picture

 OT, Today is a gigantic ass POMO day right?

Wed, 05/08/2013 - 09:46 | 3540723 WTF_247
WTF_247's picture

Still doesn't add up.  You read story after story after story of massive demand yet gold does not move higher - its still below the breakdown.  If China is buying half of the worlds output you would expect the price to be moving higher, even significantly higher.  Something does not add up.

Wed, 05/08/2013 - 09:50 | 3540739 fonzannoon
fonzannoon's picture

It adds up once you realize, as Santelli said, they have securitizd it. The only question is when is the point where the two markets split and one immediately has zero value and the other one exponential value?

Wed, 05/08/2013 - 10:02 | 3540813 Bay of Pigs
Bay of Pigs's picture

+1 for "securitized".

And thus endeth the gold lesson for those who are Central Bank and Wall St challenged on this issue.

Wed, 05/08/2013 - 09:57 | 3540779 dogbreath
dogbreath's picture

I'm wondering too.  Why would anybody sell when its obvious that gold isn't at risk of deflation.  What pool of available gold is this supply coming from.  I haven't heard a number for total annual physical demand but 2012 I think was some 4600 tonnes.  Annual mine output  hasn't changed much in years.   Are the sellers selling because they have too to keep everything from blowing up if gold were to run much higher. 

Wed, 05/08/2013 - 10:00 | 3540798 fonzannoon
fonzannoon's picture

who are the sellers and are they selling pieces of paper or physical?

Wed, 05/08/2013 - 10:06 | 3540833 dogbreath
dogbreath's picture

I wondering about the physical sellers.  We know who the paper sellers are.  GLD has seen a large decline in inventory and don't they allow for large investor to redeem in physical.

Wed, 05/08/2013 - 10:17 | 3540891 fonzannoon
fonzannoon's picture

dogbreath I am not expert but I am pretty sure it is the opposite. They don't allow the small investor to redeem in physical.

Wed, 05/08/2013 - 10:27 | 3540933 dogbreath
dogbreath's picture

agreed.  my point was that the big guys are redeeming.  I am surprised at the demand which still has a supply for the time being, but when will this supply dry up.  The price no longer concerns me as weather it is manipulation or "market forces" in the paper market.. 

Wed, 05/08/2013 - 12:08 | 3541408 Herd Redirectio...
Herd Redirection Committee's picture

Mines will have to sell, for the most part, I don't think they are generally in a position to hoard or speculate, at least not with their entire output.

Honestly I think what we are seeing is the price being suppressed by the Elite, so that the Elite's underlings can back up the truck, probably on leverage.   Price of gold according to Nucleo Direct is about $1525, if you are looking for bullion, upwards of 100 ounces.   $60 difference from WS price, and that is bullion, not a premium for a coin.

Wed, 05/08/2013 - 10:04 | 3540816 forwardho
forwardho's picture

The amount of gold being traded in paper is 400x the known available physical.

"Something does not add up" Thats quite an understatement mate.

Wed, 05/08/2013 - 09:48 | 3540727 CheapBastard
CheapBastard's picture

The Perth Mint now ships more of their PM coins to China then the United States and all of Europe I read somewhere.....makes sense from your article.

 

In fact, some of their most beauitful coins/bars are never even marketed to The West.

 

Die Welt is changing fast.

Wed, 05/08/2013 - 09:51 | 3540745 Diogenes
Diogenes's picture

Gold is a barbarous relic unnecessary to modern trade and investment as long as governments don't inflate and banks don't chisel.

But governments inflate and banks chsel, but the system still works as long as everyone BELIEVES it works. So keep printing, keep scamming,  and keep selling PMs and everything will work out ok.

Until it doesn't.

Wed, 05/08/2013 - 09:52 | 3540746 Charles Nelson ...
Charles Nelson Reilly's picture

8133.5 tonnes of gold.... funny how that number that probably hasn't changed since 1954.

Chinese people are smart.  Even if they make the equivelant of $15k a year, they save part of it and invest/buy gold and live within their means.  Americans on the other hand spend everything they have on sneakers, ipads, garbage clothing, designer sunglasses, new cars, etc.  The fucking chinese are laughing at us as they are selling us their garbage.

Wed, 05/08/2013 - 09:51 | 3540747 RagnarDanneskjold
RagnarDanneskjold's picture

Liu Jun Luo said the gold smash is the New Opium War, trying to get Chinese to dump their gold. The gold drop is just the opening gambit. He expects a big U.S. dollar rally to panic investors into dumping gold. Western banks will buy it up to be positioned for the gold rally.

Wed, 05/08/2013 - 09:58 | 3540783 Clint Liquor
Clint Liquor's picture

The Middle East and Asia are holding a shitload of USD, right now. They know what the Bernank is doing and a strong dollar is nothing more than an opportunity for them to get shed of it. The article above is proof.

Wed, 05/08/2013 - 10:05 | 3540828 RagnarDanneskjold
RagnarDanneskjold's picture

Asian central banks hold a lot of USD. Their financial systems are heavily short USD. USA is still #1 in long USD.

Wed, 05/08/2013 - 10:09 | 3540847 Navymugsy
Navymugsy's picture

Our Middle Eastern friends won't stand for a strong dollar for too long. They'll want a lot more money for their filthy, filthy crude and consumers will blow a gasket.

Wed, 05/08/2013 - 10:07 | 3540840 Navymugsy
Navymugsy's picture

My long silver positions would suffer greatly in a big Dollar bounce but I could buy that house in County Clare Ireland I've been eye-balling for a while much cheaper. I just have to remember not to put my money in an Irish bank...

Wed, 05/08/2013 - 09:51 | 3540749 Keynesian Mess
Keynesian Mess's picture

That's where JP Morgan's gold went!

Wed, 05/08/2013 - 09:54 | 3540752 new game
new game's picture

china can have the world reserve currency status and all the b.s that comes with the power trip.

maybe u.s. can relinquish some military gear for the treasuries we default on...

they finaced it, didn't they?

Wed, 05/08/2013 - 09:53 | 3540755 JOYFUL
JOYFUL's picture

When the music stops... and the new international currency settlement systems begins...

there will be no chairs for the western nations to sit on. Just like the flick of a switch. From "first world" to 'third world' in the blink of an eye.

this person has some idea .... http://kahudes.net/ ... and as usual is gettin stonewalled.... http://www.veteranstoday.com/2013/03/27/the-world-bank-rejecting-the-rul... ... in trying to bring to the attention of the soon to be completely impoverished denizens of the fallen lands ...

just how bad it really is.

All the articles about how fallacious Chinese economic statistics(and their economy) are really crack me up! They're under-reporting their gold holdings by a factor of 10.... while back in the west... it's the same factor in reverse!

Wed, 05/08/2013 - 10:05 | 3540832 Bay of Pigs
Bay of Pigs's picture

Jim Willie has been on this for a couple years now too. He's treated like a crazy man as well.

Wed, 05/08/2013 - 09:57 | 3540778 youngman
youngman's picture

In time this will become a big story..of how the Eastern countries "stole" all the West´s gold...or something like that...it will be on 60 minutes...probably with a Coach wheelbarrow commercial..you know the kind that can carry trillion of dollars to the grocery store in style

Wed, 05/08/2013 - 09:58 | 3540780 mattdubz86
mattdubz86's picture

if gold prices go down, miners take off production, supply goes down, demand remains constant, paper gold market skyrockets to get miners to produce more?

Wed, 05/08/2013 - 10:00 | 3540796 Clint Liquor
Clint Liquor's picture

Everyone hates Miners right now. It is the perfect time to get in.

Wed, 05/08/2013 - 10:04 | 3540823 fonzannoon
fonzannoon's picture

I'm starting to see it a bit differently Clint. I always thought gold would skyrocket, taking the miners with them, and the miners end up nationalized. Now I am starting to think the way to nationalize them is drive them into bankruptcy, and have JPM etc. come in and throw then a bankruptcy bailout to keep them working. Shareholders get wiped out and the miners are now property of their respective countries.

Am I nuts?

Wed, 05/08/2013 - 10:07 | 3540834 Bay of Pigs
Bay of Pigs's picture

No, that is entirely possible.

Wed, 05/08/2013 - 10:09 | 3540846 fonzannoon
fonzannoon's picture

Oh boy. I was really hoping someone would tell me I was nuts.

Wed, 05/08/2013 - 10:40 | 3541008 CCanuck
CCanuck's picture

I will....The Fonz is Nuts..is Nuts...is Nuts....The Fonz is Nuts!!!!

Not based on anything other than you asked for it.

I like your posts ...even though your NUTS...Nuts....Nuts

Hope that helped, have a great day!

CCanuck

Wed, 05/08/2013 - 10:41 | 3541016 fonzannoon
fonzannoon's picture

Thanks dude!

Wed, 05/08/2013 - 11:04 | 3541131 CCanuck
CCanuck's picture

No problem, hey watch out for squirells, they bite hard!

Wed, 05/08/2013 - 12:26 | 3541469 Herd Redirectio...
Herd Redirection Committee's picture

I think they can increase their ownership stake in the majors, and possibly buy out some juniors, if they can keep the price suppressed for another 6-12 mos. which seems unlikely, because if the miners will sell direct to stackers they will make probably $60 an ounce more, completely taking the WS price out of the equation.

If counterfeiting becomes a big problem, as it might, then owning equity becomes  a positive again, because no one is disputing the fineness of precious metals straight out of a refinery (and if they did, that refinery would get shut down ASAP)

Wed, 05/08/2013 - 10:51 | 3541060 chubbar
chubbar's picture

Not only are you not nuts but I distinctly remember that one of the loopholes of naked shorting stock is that if the company goes bankrupt you don't have to cover. I also vaguely remember there is a tax loophole associated with that strategy but can't remember it. It may be that the gains are not taxed. Perhaps someone else on the board can explain this "twofer"?

Wed, 05/08/2013 - 10:55 | 3541083 Bay of Pigs
Bay of Pigs's picture

fonz, I have followed the miners for many, many years, and all Im left with today is disillusionment and regret I didnt just stack metal for the last decade instead.

Don't get me wrong, there are some very good mining companies, it's the counterparty risk, naked short selling and gov't intervention that has left me realizing they are mere puppets themselves in all of this.

Anyone who has watched the miners get totally eviserated knows this is the case by now (Gold/XAU ratio @ 13.58). LOL, Twilight Zone levels. This used to trade from 2 to 5 during the bull run from 2001-2008.

Wed, 05/08/2013 - 10:22 | 3540912 Ignatius
Ignatius's picture

FOFOA predicts a simular outcome, fonz.  Miners will be nationalized due to the fact that they will be pulling money out of the ground at massively higher prices.

Wed, 05/08/2013 - 12:04 | 3541393 Buckaroo Banzai
Buckaroo Banzai's picture

Bingo. Trade the mining stocks, but don't get caught holding the bag when they get nationalized.

Wed, 05/08/2013 - 12:34 | 3541499 Herd Redirectio...
Herd Redirection Committee's picture

Mine nationalization is some Mad Max end-game type shit.  Like, way way after fiat currency blows up, gangs roaming the streets, thats when I would entertain the possibility of physical confiscation of a mine.

What happens if a mine is nationalized today (without compensation), in say, Canada?  Does life go on?  No.  Not at all.  It has tremendous repercussions through the entire economy, the entire nation!  Who still works there? 

Does the government force everyone who was formerly employed at the mine to stay on?  Do you get a raise?  What about the drill hole data, is that encrypted off site, or is that somehow nabbed at the point of nationalization as well? 

What about financing, because, ostensibly, if the gov't does this, its because they can't raise financing on international markets any more.  How is the mine expanded, or maintained?

What happens to the stock price of every other commodity producer in the nation?  What steps do mines take at that point to possibly protect themselves?

There is nothing simple about it.  Now, if we are talking nationalization w/ compensation...  That is a different story. I could see shareholders being forced into a legal battle, to accept a low-ball bid from the gov't for their shares.

Wed, 05/08/2013 - 13:30 | 3541735 Ignatius
Ignatius's picture

Right, or they're allowed an 'operating profit' with the lion's share confiscated.

Wed, 05/08/2013 - 21:25 | 3543282 BidnessMan
BidnessMan's picture

If you are serious, the Bozo nose is appropriate.  Hoping this is a sarc.

Mining stocks are not even paper gold. A total hoping for a greater fool game, plus hoping your counterparty does not default.  No dividends, dilution risk, expropriation risk, tax risk, operating risk, labor risk, environmental risk, and geological risk.  A hole in the ground that might - might - have gold in it.  That never trickles down to the muppet shareholders who are always last in line when it comes time for a cash distribution.  The tired old drum that the gold stock newsletter sellers continue to bang.  If it was such as great opportunity and they were smart, they would shut their pie hole and buy it for themselves.  Barrick shareholders finally got the balls to block a $11M salary award for a single - one - executive, while the company is a disaster.  Plus even if you "win" at this paper game, and your counterparty actually pays off, you get to send a third off to the Feds? 

Get Physical or be a Chump.  

Wed, 05/08/2013 - 09:58 | 3540784 new game
new game's picture

slow deceitfull slog to the changing of the reserve currency power struggle...

Wed, 05/08/2013 - 10:01 | 3540801 orangegeek
orangegeek's picture

Not going to be a popular post, but here goes - US Dollar continues to fall - that on its own is not the issue - because of negative weightings, the Euro has been climbing.

 

In short, the bulls are unloading US Dollars and buying Euros - not sure how long this will last.  Euro daily chart below:

 

http://bullandbearmash.com/chart/spot-euro-daily-completing-wave-2-wave-...

 

When the USD takes off (ie: the Euro resumes downtrend), there will be down pressure on Gold priced in USD - Gold should head below $1300.

 

Ok - now hit the down arrow.

Wed, 05/08/2013 - 10:03 | 3540819 LawsofPhysics
LawsofPhysics's picture

"When the USD takes off (ie: the Euro resumes downtrend), there will be down pressure on Gold priced in USD - Gold should head below $1300."-  Why would anyone who is seeking to purchase physical with fiat seek to down arrow you?

Wed, 05/08/2013 - 10:03 | 3540820 nathan1234
nathan1234's picture

The arrow is headed for your bottom.

The US dollar is headed to be used as toilet paper for your bottom.

Wed, 05/08/2013 - 10:02 | 3540809 nathan1234
nathan1234's picture

Chinese Gold will soon be more than the supposed US Holdings of 8000 odd MT's.

I say supposed because there has been no audit on purpose and what remains there is only some few tonnes of Tungsten covered Gold of Clinton vintage

How can the people of the US not be allowed to check and audit their country's gold is beyond belief.

The US appears to be bereft of anything in value now, besides having lost out on all ethical and moral values.

It is now By the Crooks, Of the Crooks and For the Crooks.

Screw the citizens

 

Wed, 05/08/2013 - 10:14 | 3540886 Cycle
Cycle's picture

It makes sense as many Chinese expect severe future inflation of the yuan.

Wed, 05/08/2013 - 10:23 | 3540917 Quinvarius
Quinvarius's picture

But Goldman Sachs assured the muppets they should stay short at 1350.

Wed, 05/08/2013 - 10:28 | 3540940 Vuke
Vuke's picture

Reminds me of the old joke:  why did God create Anglo Saxons?

A: Someone has to buy retail.

Wed, 05/08/2013 - 10:20 | 3540903 Platinum_Investor
Platinum_Investor's picture

This is amazing!  China is prudent investor not chasing the stock market bubble

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