China Radio: "The U.S. And Europe Have Always Suppressed The Rising Price Of Gold"

Tyler Durden's picture

Sometimes, such as after pervasive liquidations in precious metals (or is that AAPL? Has it become clear yet that with widespread "quality" collateral shortages, gold and AAPL stock have become unexpected and almost interchangeable collateral replacements) it is easy to lose sight of the forest for the trees. A forest, in which the New York Fed is procuring (through the open market) the rehypothecated gold that the Bundesbank demanded for repatriation in January; in which JPMorgan's gold holdings have plunged by 75% since said stunning Bundesbank announcement and hit new record lows on a weekly basis paradoxically just as the price of spot gold keeps sliding ever lower; and in which China is importing unprecedented amounts of gold and adding more and more each month. So let's do a quick refresh on the forest, shall we.

Here is what we discovered in September 2011, as part of Bradley Manning's trove of declassified US cables. From Wikileaks:



"China increases its gold reserves in order to kill two birds with one stone"


"The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): "According to China's National Foreign Exchanges Administration China's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB."

And now for some empirical trees.

While we don't know how much of the several hundred tons that Jens Weidmann has demanded for delivery from Liberty 33 has already been purchased and/or delivered, we know one thing: since publishing the Wikileaks disclosure China has imported nearly 2,000 tons, and just under 1,500 tons since January 2012...

... and that Chinese gold imports in 2013 continue to surpass those from 2012 "despite" the violent slide in the gold price - almost as if unlike E*trade momentum chasing babies, China buys more the lower the price drops.

In other words, China - pragmatic as always - decided to call the "rising gold price suppression" bluff of the US and Europe and do the only logical thing that takes advantage of an artificially suppressed gold price: buy hand over fist.

As for everyone else selling their (mostly paper) gold over fears that this time, unlike the previous two, Bernanke will actually stop monetizing debt and in the process eliminate all concerns of monetary collapse, China is happy to wave it in (and why not: it is only a matter of time before the taper makes way for the untaper).

Finally, we concluded our previous post looking at recent gold technicals with the following rhetorical question:

Someone more inquisitive than us may wonder: just where is all this gold being "withdrawn" to...

Rhetorical, because we have a very good idea where this gold is going.

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CPL's picture

oh it comes.

DoChenRollingBearing's picture

Be your own Central Bank.......

Well, you know the rest.

LetThemEatRand's picture

The Chinese government doesn't like free people having their own Central Bank.  See you in camp!

flacon's picture

But I thought you couldn't eat gold.... /sarc

SafelyGraze's picture

"suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold."

just kidding!

they are just kidding!

the chineses are big joking around with everybody!

dammit! I told you people not to say stuff like that in public!

LetThemEatRand's picture

Am I more afraid of the NSA or the PRoC?  Oh, same fucking thing.

Jim in MN's picture

And the Stasi, and the Khmer Rouge, and......etc.

brockhardman's picture

I have always assumed this was going to happen.  But now that it's actually happening, it's kinda freaky, not gonna lie...

rehypothecator's picture

I think China just said "Check."  Now it's the US's move.  

Never One Roach's picture

The Chinese are just Jealous of Our Freedom, that's all. Barry needs to work harder to continue Bush's mission to "win hearts and minds" across the planet.

dryam's picture

If your currency, that is currently being printed into oblivion because you're broke as hell, is only backed by FAITH and nothing else, then you must try to maintain that faith by any means necessary. Thus, if that means selling every bit of your gold to manipulate the price in order to hide the facts above, then that's what you do. It's not rocket science. The U.S. has (or had, past tense) a huge amount of gold to play this game for a very long time.

knukles's picture

The green back is backed by more than Faith.
There's "Full" and "Credit", as well.

Shot that objection down!

Harlequin001's picture

except  6.8K ounces is not 127 tonnes.

This looks additions from mining supply. Gold suppression scheme not in full collapse just yet, unfortunately.

Rubicon's picture

Poland has just joined the queue for repatriation.

GetZeeGold's picture



I remember punching some numbers on my calculator about a decade ago. When I was done I reached a conclustion.


"Damn.....I need to get some gold!"



malikai's picture

17 month sample in that raw numbers chart.

Total: 1459.40t

Avg Monthly: 85.84t

IMF says China's official holdings are 1kt as of December 12.

Chinese people/banks/etc are buying gold, but the CB has yet to step up the buying. Gold over FX is 2%, compared to the US' 76%.

tmosley's picture

The Chinese central bank doesn't report their holdings to the IMF on a regular basis.  IIRC, that number is as of 2009.  They likely have at least triple the amount reported by the IMF, though some say it is more like 8 times as much.

Hulk's picture

I tried the same thing on my calculator, but got some kind of "overflow" error...

HardAssets's picture

"The green back is backed by more than Faith.
There's "Full" and "Credit", as well."


Then again, theres also that US military budget greater than that of the next 17 or 16 or 26 nations combined. (It seems to keep changing depending on the source and the year. In any case its a helluva lot greater than any other nation on the planet.)

Of course, you gotta ask who is financing that military budget and for how long can they keep it up. Thus increasing wars overseas and use of the military and para-military police against US citizens at home.

But , 'they hate us for our freedom'

knukles's picture

Another Conspiracy Theory becomes Fact The gold flows from west to east Bigtimearama Not many them conspiracy theories left anymore, no? Now, did y'all see the articles about NASAs missile launches from Wallop Island on July 4th that discharged Lithium into the atmosphere? No? Gosh.....

Jendrzejczyk's picture

You're a full of shit conspiracy whakko Knucks. Right on NASA's own website it clearly states, and I quote:

" The second rocket is a two-stage Terrier-Improved Orion. It will shoot out a long trail of lithium gas to track how the upper atmospheric wind varies with altitude."

Wait, WHAT????? (sorry)

DaddyO's picture

You mean this suff? Nothing to worry about here, you guys are such worry warts.../s


Hulk's picture

I'm still wondering just what the hell it was that launched off the coast of So Cal a few years back...

quasimodo's picture

They told me it was a jet, or something that the sun just made look funny. Nothing to worry about! Cheers!


WmMcK's picture

+ 1 - But I think it's more a game of Go than chess.

HardAssets's picture

Maybe the eurotrash are playing medieval chess and the Chinese are playing multi dimensional Go.

The AngloAmerican crazies have been giving it to the Chinese backside for a couple of centuries, at least.

Maybe the Chinese are sick of it . . . . or maybe they are fully minions in the NWO.

Who knows ?

(Of course I'm referring to the 'elites'.  Most of us commoners just want to  live a good , decent life & care for our families. And be left the hell alone.)

Antifaschistische's picture

It seems to me, if all the "paper gold" vs. "physical gold" claims are true, then the "Check" move would be forcing delivery from COMEX on (pick a number) $30 billion in gold.

until then, they're just capturing lesser valued pieces.

SAT 800's picture

We don't have any move. Zugswang.

LetThemEatRand's picture

They literally all play be the same propaganda play book.  Family this, children that, freedom, security, homeland, FUCK YOU FUCKS!!!!!!!!!!!!

Spider's picture

Well there wont be much gold available for sale - Fed forgot that miners actually have to mine the stuff and many do it for MORE than current spot... Oops!

LetThemEatRand's picture

And I wonder who will buy a controlling interest in said companies before the shit hits the fan.  Hint -- he's a squid.

DeadFred's picture

Gotta beat The Morgue there first. They're the ones who made loans to all those companies now selling for less than their cost. I wonder what the terms on those loans were.

knukles's picture

Standard event of default
Own the company


malikai's picture

So there is more than one way to nationalize an asset..

Squiddly Diddly's picture

Who, me?  I pulled the pins on the hand grenades. It's just a cartoon gag untill they explode.

Real Estate Geek's picture

Stock to flow.  How long this lasts is a function of how much gold is still coming out of Western vaults, not how much is coming out of Western mines.

Ranger4564's picture

How do you see the suppression of mining as an oversight / lapse in judgment, when the article discusses the dual purpose (three really) of gold purchases... reserve for currency, shift reserve currency status to RMB, deplete foreign currency holdings. The FED is destroying the miners so that there is less gold for China to buy.

But in fact, I see the whole world as being part of the oligarchic circle jerk, so China is not an outsider, it is being prepared, and assisted in those preparations... it's just that the Chinese will have to go buy a few mines cheap to get the metals out... The mining collapse is more damaging to the retail customers, not to the wholesale customers. Whole sale... all going to China.

Now do you see why Jim Rogers was so certain about Asia? Did he have inside information, or just really astute observational skills?

Marco's picture

Ignoring the inability of most countries in the world to sustain themselves in trade balance for a moment, the world economy doesn't need a reserve currency any more, even without gold. In this electronic world where currency exchange is as simple as pressing a button, having a basket of foreign currencies as reserves works fine. The reserve currency is an archaic concept only kept alive by US military might. A Yuan as a reserve currency would have the same result as the dollar ... they'd be forced to massively print to get the ball rolling and they'd never stop printing after that, just like the US.

SAT 800's picture

It's a good thing we don't need one; because we don't have one. The "dollar", (which no longer exists), is not a reserve currency; which despite the high level of ignorance existing, actually has a definition. When all the currencies are paper fiat with no backing; there is no reserve currency. The dollar was a reserve currency because it was exchanged for Gold on a fixed basis; immediately this stopped; it was no longer a reserve currency.

Marco's picture

Dollars are massively held in reserve in foreign reserves and are used to pay for oil, it's the reserve currency ...

fockewulf190's picture

The Chinese know the Great Reset is coming, and are preparing for it. No other country that I know of has not only purchased massive amounts of physical gold and silver, but also encouraged it's own population to do the same and stack phyzz.

The Chinese will be in the best shape financially once the Great Reset has burned itself out. They have long experience with pain, and have survived as a nation even when losing tens of millions of it's citizens because of famine, war, or disaster. The Great Reset will hit China hard, but it will not destroy it, and having a gold based Yuan will be it's solution to recovery.

Marco's picture

That completely depends on how whoever has the stuff they need (ie. food, oil, fertilizer) will value gold after the reset. They might very well be better off investing all that gold into making their internal industries more sustainable and less polluting and decreasing their needs on imports all together. In the end gold is only currency, the true wealth of a nation is it's productive capabilities and resources.

Of course internal investment and trade/current account balances means wage inflation ... and if there is one thing the billionaires in the Diet don't want it's wage inflation.

fockewulf190's picture

Well lets put it this way; if after the Great Reset gold and silver is worthless, or not desireable as money for transactions by some, or even most of the remaining nations on this Earth, then the recovery is going to take much longer and be that much more painful...unless the Vulcans show up and introduce us to the Federation.

SAT 800's picture

You don;t understand. Gold is not "only currency"; eg. that which is current. it is also money; that which has enduring value. Money has a two part definition; part two is a store of value. If the Chinese manage to be this brave and revolutionary and this far outside the box; which they might, as their mental maps are quite alien to us, they will immediately put everyone on a Gold Reserve currency standard. The countries that need to sell their oil and fertilizer and food will be in a weak position compared to the country that is willing to ship payments of gold bullion; for an example look at the funtioning of the British Empire, which shipped silver to pay producing countries; the golden rule is that he who has the gold makes the rules. None of the countries who so fortunate as to receive real money from the British, got a "good deal". The upper hand was held by the people with the real money.

Marco's picture

Compared to real wealth (natural resources, productive capital, human capital) the endearing value of gold is infintisimal ... it's valuable at the personal level as a convenient store of wealth, it's irrelevant at the national level.

Any significant trade deficit will whipe out gold reserves in a flash (which is why the US had to get off the gold standard). The capability of sustaining a trade balance is much more valuable than gold.

HardAssets's picture

Well, no one but the highest level insiders know who is in the NWO game and who isn't. Is China an insider ?  They sure have been groomed for the role since they were opened up to the west decades ago and industry was off shored to there.

Is Russia an insider ?  Or they really in opposition to the NWO ?

Anyone who has researched the financiing of Nazi Germany, the USSR, and Maoist China by western banksters has to have suspicions about any of it and all of it.

'Interesting times' for sure.

SAT 800's picture

China is not an insider; this is perfectly clear.