"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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sablya's picture

"down a few hundred percent"

There is this thing called ZERO which prevents things from going down more than 100%.  What a fuckin' 'tard!  

Seeking Aphids's picture

 

Brilliant postt Sabiya! This thing called ZERO....mind if I use that line?

dark pools of soros's picture

BTC was chasing Gold... now Gold is chasing BTC

 

What's Gold's excuse again??  manipulation??  any cure for that cancer?   thought not

 

 

GetZeeGold's picture

 

 

I'd buy rhodium before I'd buy BTC.......at least it's useful.

 

Are you aware of the valuable properties of rhodium?

dark pools of soros's picture

yes it is great..  but just because this touchy feely crowd here can't comprehend the value of the blockchain doesn't make it worthless...the tards here can't understand how the internet works and yet they flock here anyway

q99x2's picture

Ney. The volume in the recent Chinese bitcoin sell-off was only 18% of what it was after the April blowoff. Already bitcoin is back around 750. Maybe China's central bank is buying them.

GrinandBearit's picture

"Maybe China's central bank is buying them"

You hope.

lakecity55's picture

I think the introduction years back of paper GLD is what has got everyone confused, and of course, by design.

Of course, it is an old trick, as in Europe of old when they figured out the chance of everyone getting their Au the same day was remote.

jballz's picture

 

So when gold is back at 300 how many zany stories will you all have about why it will go up any day now.

 

You know the diference between a goldbug and a panhandler?

At the ned of the day a panhandler has some loose change in his pockets.

 

Keep sucking that hind tit, bitchez... any day now ANY DAY now you're ship is gonna come in.

Not.

Yoann's picture

I'm just wondering if China buys so much, why price is still going down ?

andrewp111's picture

Maybe you are looking at things backwards. China could be the only buyer supporting the price at $1200. If the Chinese weren't buying, the price might be back at $300.

logicalman's picture

Somehow $300 gold seems unlikely when it costs $1000 to get out of the ground

80 years ago $20.67 per ounce - Today $1200ish - approximately a factor of 60

More of a comment on the value of the dollar than gold

madcows's picture

From what little I can tell, the price of gold has historically followed the world economy.  Except when there has been the fear of inflation.  Now, with the FED printing, the paper gold value went way up.  But, by government standards, inflation is low, and the economy sucks donkey balls.  So, the price keeps falling.

My bet though is that it sky rockets in the coming year when the currency crisis hits.  Time to batton down the hatches kids, buy as much PM as you can while the price is down.  China is smart in doing so.

matrix2012's picture

People are so retard nowadays to EVER compare the imaginary/binary concept of BTC with the over 4000 years worth of the "Barbarous Relics" :-)

 

What an ethereal substance looks like side by side to the shiny physical? 

i guess they have too much fluoride on the drinking water, thus retardation is unavoidable to some!

jballz's picture

 

gov locked the price of gold at 35 bucks for 40 fucking years. After they stole it all from the citizenry by decree,

If you have a 4,000 year investment horizon gold is a good bet.

Otherwise you are just fucking delusional to believe the price will ever break from total manipulation, overt or covert you will die with a stack of depreciating assets,

matrix2012's picture

jballz, are you assuming that the Fed's fiat dollar grip will and can hold for another 40 years or even few decades less?

The present fact about gold price suppresion for 40 years doesn't mean it'll always be that case for decades to come.

 

It's a matter of belief, whether to put one's faith in the unchecked printing of fiat paper, or something physical like this venerable limited shiny metal...

 

Why Gold Is So Rare

"UNLIKE diamonds or gem stones, which are produced under the Earth by extreme pressures and heat, gold is a NON-TERRESTRIAL metal, meaning that all the gold that exists today, above and below ground, is all there ever will be. Gold is not produced by the geology of the Earth; in fact, Gold doesn’t even originate from this solar system. All the gold that exists on Earth today arrived many billions of years ago during the early period of Earth’s formation. Gold is a heavy element with an atomic number of 79. As with other elements heavier than iron, gold was created in the far reaches of space in some of the most violent events in the universe – supernovas."

 

An excerpt from: http://bit.ly/S6Ieb3

There are indeed some factual reasons why gold is famously nicked as the BARBAROUS RELIC :-)

the tower's picture

There will be new fiat. You underestimate the power of TPTB.

I play fiat. Makes the most profit.

I get bored waiting for some metal to turn a profit one day. Or not.

Being smart and productive is still the best bet. And investing in people.

If you're totally out of the loop and have all the time in the world, go for gold.

Q-Q-Q's picture

The problem with the Chinese is that they under-estimate the intelligence of the average Western investor http://www.youtube.com/watch?v=17GbGmDORwk sorry meant to say estimate.

the tower's picture

Fine, let them have it, good riddance, who needs gold.

Crises are an opportunity to make money, only fools sit shivering with fear on a pile of gold.

See how much you get back when the dust settles.

Ever played chess? This is the time to play. The winner will offer you some of the new fiat for your gold.

kk1532003's picture

That's what the French aristocracy thought in 1789.  How'd that work out for them?

the tower's picture

The obsession with history on this site is staggering. Times have changed. Our lives are ruled by science and technology.

silverserfer's picture

no shit brain, sociopaths have taken control of technology to gear you to be exactly like you are now a papermonkey. But keep working for that paper and enjoy the ever shittier terms you keep agreeing to where you know it or not. 

BigJim's picture

This time really, really is different!

Well, when you put it like that... who could possibly cavil?

Joshua Falken's picture

The Chinese have been steadily using their US$ to buy copper scrap across the world for at least 3 years.  They never do enough to move the price, but their is always a steady bid and cable strippers (to take the sheathing off old wiring) are selling well in Europe.

 

Everyone sees this as a sign of economic activity when in fact it is the Chinese using their paper dollars earned from selling stuff to American consumers to buy something that has real physical value

NaiLib's picture

True, and the Chinese also make sure to buy assets priced in USD in order not to shake up the value of the USD. Its a ticking bomb, once they satrt selling their USD they will be fully hedged in hard assets. USD as a global reserve currency is on the last leg. Sorry guys.

Seeking Aphids's picture

Right NL. I don't think China wants to be THE reserve currency but would probably like to be part of a basket of currencies that will be used for world trade. The Fed has shown, in its infinite wisdom, that no one entity can be entrusted with the keys to the printing press....the whole concept of a single reserve currency controlled by a central bank that is (always!) political and self-serving has been discredited forever and should go the way of the Dodo bird. Adding gold to the basket of currencies would be a smart move as it will anchor the basket and ensure that there is a reality check in case even this medium of exchange is manipulated. Gold, therefore, should play an important role in future and its price should be allowed to reflect the true supply/demand situation once the bankers' shenanigans are pushed aside. The US has used its 'Get out of Jail Free' card....there is only one of these cards in this deck as the other players are not stupid enough to go for that trick twice. China will continue to surreptitiously buy gold, copper, silver, land, buildings, artwork, Maseratis and Starbucks outlets until they have so few $$s left that won't matter....then they can allow the Yuan to float and pull the rip cord on the golden parachute........Happy Holidays and Merry Christmas to all!

matrix2012's picture

The related posts of three of you: JF, NL, SA quite make sense and I'll say, the propositions are solidly grounded.

I agree that we gonna see the coming realization of a basket of currencies anchored with gold, replacing the rotting, arbitrary and unjust fiat dollar system!

Keep on stacking dudes! Have faith in the barbarous relics. well-guarded one in the fiat and have none in the virtual things. 

 

“If you can’t hold it, you don’t own it” -- The Ten Commandment: "Possession is 10/10th of the Law. Just remember, when fraud is the status quo, possession is the law."

Happy Holidays and Merry Christmas to all!

Hongcha's picture

We have capable cable strippers in the U.S. of A. as well; they smoke meth and focus on empty housing developments.

LoveInflationLoveVolatility's picture

Premium in India at the moment is 26.2% for the 31st Dec 1 gram contract! Ofcourse out of that 10% is due to import duty, but even then there's a 16.2% premium!

esum's picture

china buying oil from iran with gold.... due to banking restrictions... 

next china will undercut the petrodollar finalizing pax amerikana...

 

overmedicatedundersexed's picture

obuma care will be good for debt, very good..ask your MD if they will take gold for payment, you might be surprised.

Zerohedge fan's picture

""the Chinese don't want US dollars anymore, they want gold"

 

http://www.youtube.com/watch?v=m1aQ-XGWors

Quinvarius's picture

What do you call it when you can't get size because of supply problems and the government is setting the price?  I call it rationing.  Fiat always dies.

sablya's picture

I think it is called electile dysfunction.

the not so mighty maximiza's picture

did any one here think there was gold in the vaults?   conspiracy=fact

Silverhog's picture

I see copper clad zinc pennies laying in the Dunkin Donuts parking lot all the time. Gee... never a Gold or Silver coin or a real copper penny. Guy who works the counter says he never finds Silver dimes or quarters. Said he use to get a few a week a couple of years ago. So Silver must be about 99.99% out of the public coinage. Yet the talking heads would make you think nobody in their right mind would want to invest in these ancient precious metals. So the Riverbed continues to dry up, going to get real interesting to say the least. 

Hongcha's picture

More like 99.99999.  The silver coins have long since been sorted out by sorters calibrated to detect the slight difference in weight.

Rob Jones's picture

Most of the US 90% silver got pulled out of circulation in the late 1960's. My father made a point of holding onto silver. You could still find occasional silver dimes and quarters in the early 70's, but they were mostly gone by then.

Just a few months ago I found a silver dime just lying on top of one checkout machines at a grocery store. I guess the machine wouldn't accept it, so whoever had it just assumed it was bad and left it.

TPTB_r_TBTF's picture

The Chinese do not want my dollars?

The Chinese do want my gold?

 

I guess, I will not be buying "made in China" any more.  oh well...

Al Huxley's picture

I don't think they care - In any case, since they're worried about the value of the $ (ostensibly) then not selling to you in exchange for something that may soon be worthless is a better deal for them.

DOT's picture

"My, oh my, how those Eagles fly!

Good-by bottom dollar, good-by.

 

 

Sufiy's picture


Jesse: Record COMEX Gold Claims Per Deliverable Ounce at 79 to 1 


 Jesse reports that the Game Of Musial Chairs in the Western Fractional Gold Reserve System is getting into the new stage with the record level of leverage. Now report from Bloomberg can be put into another perspective.  http://sufiy.blogspot.co.uk/2013/12/jesse-record-comex-gold-claims-per.h...

kenezen's picture

Reports are China wants to become the World's Reserve Currency. Look for more acquisition! No one is entirely sure of how much they have? Their goal is 8500 Ton.  

Iam Yue2's picture

The notion that China want to have the world's reserve currency is a joke.
Firstly, it would mean that the Chinese would be forced to run massive traded deficits, which they would not want to do. Second, it would mean that the Chinese gov would lose control of the currency, and most likely, their grip on power.

The lesson of the US reveals clearly that there are no benefits to be had from hosting the world's reserve currency.

TheObsoleteMan's picture

Until it is debased into oblivion, there are HUGE benefits to having your currency be the world's reserve currency. The biggest one, is that you get to export your inflation. As bad as it is now, believe me, it would be far, far worse had the US$ not been the world's reserve currency.

webspin's picture

"Until it is debased into oblivion"

Free lesson; You will always be on the sucker side of any speculation (oppps...investment) until you correct your very faulty thinking. 

RichardENixon's picture

That's not a lesson it's a statement that's not supported by anything, sort of like a dollar.

sablya's picture

It is ludicrous to say that there is no benefit from having the world's reserve currency.  We can spend and borrow as much as we want and we pay back in our own debased currency.  That's a huge benefit. 

bombdog's picture

China already has most of the worlds reserve currency, they just haven't announced it yet :-)