"The Chinese Don't Want Dollars Anymore, They Want Gold" - London's Gold Vaults Are Empty: This Is Why

Tyler Durden's picture

Today gold slid under $1200 per ounce, dropping to a level not seen in three years. Judging by the price action one would think that gold is not only overflowing from precious metal vaults everywhere, but can be found thrown away on the street, where nobody even bothers to pick it up. One would be wrong. In fact, as Bloomberg's Ken Goldman reports, "you could walk into a vault in London and they were packed to the rafter with gold, and the gold would trade from me to you to somebody else. You could walk into these vaults today and they are virtually empty. All that gold has been transferred out of London, 26 million ounces...." To find out where it has gone and why it is never coming back, watch the clip below (spoiler alert: listen for the line: "the Chinese don't want US dollars anymore, they want gold").

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chump666's picture

...and cue China setting up a buying panic for gld: http://portal.ransquawk.com/headlines/north-korea-has-threatened-to-atta...

 I guess we just ride the madness huh?

TonyCoitus's picture

Don't fight the Fed.

besnook's picture

what do you need gold for when you have fiat.

hungrydweller's picture

$800!  Fucking Sweet!

chump666's picture

The Fed will lose control of the $, the yield curve and stock market all at once

Possible Impact's picture

New yield curve then:

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

Variable yield—or dial-a-yield—is an option available on most modern nuclear weapons. It allows the operator to specify a weapon's yield, or explosive power, allowing a single design to be used in different situations. For example, the Mod-10 B61 bomb had selectable explosive yields of 0.3, 5, 10 or 80 kilotons, depending on how the ground crew set a dial inside the casing when it was loaded onto an aircraft.

BigJim's picture

Interesting. Would a lower yield mean less of the core underwent fission equals more fallout?

rehypothecator's picture

No, less yield means fewer fissions, so fewer neutrons making the dirt radioactive, and fewer of the really bad daughter fission products, like Sr-90, Cs-137, and Co-60, which have short enough half-lives to be really, really radioactive, but long enough to linger for many years.  Things with 1-hour or 1-day half lives are even hotter, but they're gone in a week.  The ones with multi-million-year half lives, including the original uranium, aren't so hot that they emit killing radiation if you walk near them. 

BigJim's picture

OK, but the Uranium and/or Plutonium that don't fission get aerosoled into the environment, and yes, as alpha emitters, they're not too much of a problem when they're outside the body... until you ingest them by either breathing them in or eating something that did. THEN you've got a serious problem. And so does everything else for how many million years?

Real Estate Geek's picture

I believe the yield is changed by varying the amount of tritium that's injected into the core.

BigJim's picture

So the same amount of core fissile material (U235 or Pu239) gets fissioned, it's just the amount of Tritium that undergoes fusion determines the yield?

Real Estate Geek's picture

I believe that adding tritium to the mix greatly increases the number of free neutrons that are available to continue the chain reaction, before its free neutrons run out of atoms to target in the immediate vicinity.  The "target rich" environment required for fission isn't maintained for long because the mass of fissile material quickly expands to a point where it's no longer a critical mass.

(But please consider my handle when weighing my explanation because I'm not educated in this field; only very interested in it.)

Kirk2NCC1701's picture

Please don't make Spock laugh. It's bad for his Vulcan health.

forwardho's picture

Boy that sounds like a pretty bad day in the offing.

IridiumRebel's picture

Now why would they want that gold stuff when we offer digits, shiny fuckin digits that any asshole with half a brain for hacking could totally fuck with?

Nitrocharged's picture

Funny how people who want to buy want a lower price but people holding are outraged at lower prices (as I am).

You have to wonder at the response to the taper (stock up - PM's down) when last time they even hinted at one the market tanked big time. Now it seems they just keep rubbing their greedy hands together since there will still be 75 billion printed a month and zero interest to infinity.

Spitzer's picture

I've been averaging down too, this whole time.

The anti gold crowd keeps getting their fix but we know. We are not guessing.

 

The tide is going into the ocean right now.

G.O.O.D's picture

there is nothing funny about it, it is the old greed factor on both sides of the trade.

Magnum's picture

In a world where everything really seems upside down, there seems to be more evidence that those charlatans who always say "Buy Gold Buy Gold" (kingworldnews.com) are paid shills enticing suckers to load up the truck at $1500, $1700, $1900 so the bigshots can make a fortune shorting it.  I was tricked too, two years ago I NEVER thought gold would be at $1180 in December 2013.

G.O.O.D's picture

Yeah Mag I lost 10 bux when i bet at the time when silver was 50 that it would see 70 before seeing 30 and I am still amazed it keeps dropping under 20.. WTF?

dick cheneys ghost's picture

one either trusts gold or the cartel............take ur pick.........

Spitzer's picture

Yeah

The most marketable good in the world was peddled by snakeoil salesman at King world news.

You are a fucking moron magnum

Kirk2NCC1701's picture

In the summer of 2012 I loaded up on PM (to front-run the Fed) on the advice of gold bugs/shills, especially here on ZH.

They all insisted that gold was not in a bubble and had lots of Rise left (above $2000!). They also strongly advised against Bitcoin.

They could not have been more wrong if they tried, and my Opportunity Cost (for those who actually know what that is, w/o having to look.it up), could not have been higher.

Even HH posted 2 days ago that gold went Down 27%, while the S&P500 went Up 27%

Only a complete retard or a shameless gold shill would argue with these facts and stats.

If you make predictions, you get to live with the shame of making dead-wrong ones. And for those sociopathic shills who know no shame, we add Contempt and Disgust to our regard of them.

oddjob's picture

So you took the advice of people on ZH and went full retard, then 6 months later you signed up for an account. Get your fucking story straight Kirk.

Charles Nelson Reilly's picture

cry me a fucking a river, dude.  You wanna speculate and play with big boys in rigged markets, then go right ahead but be prepared to have your face ripped off.  Most on here and taking thier casual monthly or bi-monthly stroll to the coin shop to protect what they have before the crazy fuckers tear the place donw.

Alexandre Stavisky's picture

Unlimited and unconstrained ability to print tokens of wealth without any real production?  Yeah.  With that any "full retard" could suppress any price, or bid up any asset class targeted.  Why do you think Neo-Keynesianism (Old Babylonia) was always the scorn of framer's of liberty?  Why do you think they were so oppossed to unanchored, uncollateralized credit claims?

With half the population striving fiercely to bring innovative product and service to market for free will selection by their neighbours and to receive equitable compensation, the other half have leapfrogged straight into vice and fraud.  No need for accumulation of commodities, the factories to transform and package them.  No need for transport and distribution or even marketing.  No need to make fine-point accounting to determine what portion of profit comes of all the gross sales.

With fiat money printing and distribution only to the whimsically determined privileged class, every thin-air manufactured currency instrument is pure profit.  And it is advertised as being without cost consequence.  In fact it is elaborately touted as an "offset" to deflationary forces caused by deleveraging, default, write-down, contraction from excessive credit creation and speculation.  As if money printing should be accepted as a bonafide tool of central banking.

Except the central banking screeches to a halt if the economic actors, upon whose backs this cunning contrivance abuses out value to their everlasting regret, wise up and repudiate the system and its daily frauds.

What the central bank and government now holds as their special perogative (money printing) could not be undertaken by any of the true economic creators subject to their dominion.  Any business or household which sought to ameliorate their insolvent position by creating national currency or even by distributing additional credit claims unbacked by obtainable widgits would find a fast incarceration.  If a king or even sovereign holds perogatives to himself which is contemptible in the lowest beggar of the kingdom were he to employ it, the kingdom is ripe for fast decline.

That any alternative store of wealth is sought by honest men wishing to preserve their stored labours is natural.  That their gov't (of the people, by the people, for the people amd founded upon the highest ideals of liberty and swearing their elites up and down the ranks to the defence of same) punishes them for their rightful and natural impulses is another testament to corruption and control.

Make no mistake.  Precious metals remove consent of the governed from those that would manipulate their economic system for select benefit.  The entire structure of inflation, dilution, monitoring, gimmicking, taxing, factoring, putting forth for increased velocity, etc. disappears when PMs are salted away.

Rather than suppress that instinct, the nation should never have countenanced the activity which brought it to such a degraded state.  It should not continue and amplify the pernicious philosophy instead of seeking remedy.  The entire structure dis-incents the honest production and spawns a hive of grifters, welshers, brickbats, charlatans, weasels of every stripe.

Let the insolvency meet the invisible hand.  Let the bankruptcy deliver the imprudents' goods to a deeply discounted but eager market.  The other path is a death star.

theprofromdover's picture

Until you sell your gold, you haven't lost one thin dime.

You are playing mark-to-market, we don't do that anymore.

Pareto's picture

hey news flash fucker!  its only an oppportunity cost if you yourself understood it to be one and at that time.  the fact that you demonstrated your preference, however wrongly, has fuck all to do with any of us, and more to do with your lack of understanding about respsponsibility.  you pulled the trigger fucker.  Smarten the fuck up.

GrinandBearit's picture

All you have to do is buy it on a regular basis (hopefully after large dips) when dry powder is avaliable.

I sincerely hope it goes down much more.  I have a too many of these silly green paper rectangles I need to trade in.  

DaveyJones's picture

it is funny how some folks think the price of gold somehow is the current measurement of all the fundamental instabilities and criminal price corruption. On one hand, a more accurate price is innevitable. On the other, no one can call that day just as no one could predict this level and scope of corruption or its outer limits. 

PlausibleDenial's picture

As I have said before... You will know the price of gold when you need it.... otherwise the conversation is moot.

giggler321's picture

Doesn't stop them trying to predict, Keisers, Rickards, Clement, Lira, Puplava's and the rest of ZHer blogger spheres.  Acting like they know, preaching to the choir of distortion and with tongs hanging out like dogs the followers; they line the road on their why to the nearest coin shop to get rich quick only when it goes the other way, blame is placed soley on manipulation - after all nothing different this time and they surely can't all be wrong, can they?

If you want metal buy it.  If you want bitcoin or others, buy it; just don't expect good advice from a forum of followers of one flavour of ice cream to tell you anything useful that you don't already know.

Best advice I've ever heard on this subject is from Mark Faber - I won't ask a gold bug for his opinion on gold. I want to hear from those who wouldn't buy and ask why.

fijisailor's picture

I'll back up the truck when the price goes to $0.  Meanwhile dollar cost averaging suits me just fine.

tenpanhandle's picture

To answer question by commentee of previous gold article  "Why would I want to buy gold?"

Because over 6 billion people worldwide want and crave it - always have and always will.  It's part of the human psyche.  Gold is treasure in every culture on earth and can always be used to buy/trade for necessary products from people who have or produce a surplus of these necessary products, the world over.  So having real gold in hand will allow one to buy other real things when peoples are no longer willing to accept IOU's in their myriad forms. 

 

When will this time come when peoples will not accept paper for their real products?  Sooner or later.

RafterManFMJ's picture

50,000 Continental Dollars buy zero gold
50,000 Confederate Dollars buy zero gold
...and eventually...

papaswamp's picture

China announces Yuan is now gold backed.. USD collapses. Not a shot fired and they could take us over in mere moments.

GrinandBearit's picture

Yes.  

IMO, this is why they are buying all the gold they can get.

DaveyJones's picture

so true, you just described WWIII

at least it'll be quick

the death and destruction will take time though

This is the stupidity of this empire

No army can stop this

No Hiroshima this time

it's over

and we have no one to blame but "ourselves" 

Kirk2NCC1701's picture

That is such a 2D vision.

What would actually happen in response, is that Obama would use the Int. Economic Emergency Act. As such, he'd have almost unlimited autocratic power.

E.g., Seize Chinese assets in the US, issue a Bank Holiday, use Capital Controls, force 401ks and IRAs to buy Debt, nationalize gold and silver mines, use ALL gold in US banks and at the Fed to back the Dollar.

No, my friend, if/when there is a Great Unraveling, it will be most severely felt in the Derivatives market, where hundreds of Trillions are at play. Instability here is like an unstable nuclear reactor: explosive chain reaction --> meltdown.

papaswamp's picture

He could do all that but what would happen to the US economy? Same result. US economy would be in mass turmoil much less those actions probably would cause the sheeple to riot.... Again collapse. It would be a check mate move. I certainly don't think it will happen in the short term future, but the Chinese have a very distinct plan. I think it is very simple way to handle their large population, much the way Europeans did in the 14-1500s... Go forth explore and conquer.

AngelEyes00's picture

I kept reading posts wondering if someone would get it, and low and behold you did papaswamp.  Congrats!  Essentially this is a SILENT WAR that takes currency wars to a whole new, aggressive level, by transferring a tangible substance from West to East to back their currency and replace the USD (that is not backed).  

I think China figured out gold was being shorted to counteract devaluation of USD during QE.  So at any of these lower prices it's a deal.

China will probably continue to load up on gold trying to extract as much as possible from the developed countries, then at some threshold of stockpiling announce their currency is now backed by gold and welcome any and all transactions between different countries seeking fiat security.

This WAR will be won silently and once the announcement occurs, it will take place very fast!  Nothing like winning a war silently and quickly.

 

rainingFrogs's picture

China is likely in on the suppression of gold as well.  It certainly is in their interest to keep the price low while they accumulate it. 

papaswamp's picture

True true...the other thing that happens if the price gets too low are mineral rights owners get skittish and begin putting their stake up for sale.... alot of Asian buyers coming into the rights market and exerciseing direct purchase of material.

fooshorter's picture

While a great theory that some facts really will support, but the truth is far more horrifying. China like said in so many posts is an unknown, either way. Yes they are buying gold, but they also have an intensly over leveraged banking sector, they have a housing bubble never seen before, the smog is a humanitarian crises. What are they going to do destroy the USD with a gold backed Yuan and then they win? what? 

The reason why I don't fully buy this is because the elites are fucking smart. If we know this they definetly know this. I laugh out loud everytime Bernake goes I don't understand gold. First rule of poker is to never show your hand right?  Well China isn't buying gold to destroy the USD, its buying gold to fight the coming IMF world currency. The currency of the elites is gold. Always has always will. If your buying gold for a quick turn around your doing it wrong. If you looking at gold prices and going I made mistake you are not seeing the real picture. There will always be shills and false prophets. When it comes to armageddon prophices sure, but when it comes to gold theres no mistake it is the true hedge against this centrally planned insanity.  

Chinas economy is export based, why would they want a stronger currency? That would fuck themselves so fast. Create world wide animosity while making their manufactoring to expensive to buy? What sense does that make? China is reacting to the west. The chinese know what is being planned and they want no part of it. This country has been used by the west on a massive scale. Only now are they trying to stand up for themselves. 

I don't buy gold to make dollars per se, I buy gold to seal my wealth. You should too while you still can or afford to.

Ned Zeppelin's picture

But for the fact that, when it really hits the fan, the real power lies in the quantities of guns and gasoline that one has.

The Heart's picture

The babylonian banksters have been long setting up china to be the next money engine after the USA has been sucked dry for everything it has, including all homes, national parks, rivers, properties, and just about the entire US. The bankster babylonians led by maurice strong have been setting themselves up in china for the next world war knowing they will be unharmed there. This is what the vacant cities are all about. When they start filling, start worrying.

The one sign that time was nearing was the robbery of the world's gold and then having it slowly sent to china where they plan to use it in their next new world oder under the chinese flag. This includes getting rid of Russia after they have done their useless idiot parts to take down the USA. So, hearing this is no surprise. It is actually kinda scary knowing it has happened and now, there is no stopping these corrupted slime-bag criminals from executing the world domination take over and population elimination agendas.

Pray for peace on Christmas, but also remember that a certain middle eastern apartheid boycotted country according to it's proven track record, has bad habit of funking up things on Christmas Day, and New Years time. All hands on deck in their vigilant stances. Have a great Christmas like it was the last free America will ever see.

Keep your antennas up~

G.O.O.D's picture

OMG this makes way too much sense. Thanks for the nightmares..