How The Chinese Buy Gold?

Tyler Durden's picture




 

880 grams at a time...

 

 

As China News reports, in a gold shop in Taiyuan, Shanxi Province, a "tyrant female" (Google Translate must have loved that one) bought more than 880 grams of gold jewelry. Lunch boxes were used to weigh the gold and it left other shoppers speechless with admiration.

Reporters on the scene saw the woman buy gold jewelry and diverse, there are a dozen light gold ring, the rest of the gold necklaces, gold pendants and other a lot. The staff at the time of weighing a total of more than 880 grams of gold jewelery boxes accounted for nearly one-third the size of the load box, stacked full of gold so that shoppers around again and again speechless.

Faced with the question, "why buy gold", Ms. "buy gold" did not want to say, but suggsted for her "own use."

 

Perhaps she read Grant Williams anti-"Anti-Gold-Idiots" discussion this week:

"So these anti-gold idiots are just that, idiots, or else they have the memory of a goldfish, because currencies come and currencies go, as sure as night follows day. It is the natural order of things. And as you can see, it's not about trading gold to get rich or getting long gold or buying one by two call spreads or getting fancy, it literally is about protecting yourself in the end. It's not like Williams got rich. He just stayed rich. Everyone else got poor."

When Western central bankers rubbish gold as a "barbarous relic" or, as in the case of Ben Bernanke shortly before he started his job at The Brookings Institution left office in January, admit to a complete lack of understanding of it, does it not strike you as strange that, having accumulated significant stockpiles of gold over the years, they aren't in a hurry to swap any of it for paper money (well, with the notable exception perhaps of the United Kingdom, thanks to the antics of Gordon Brown, King of the Idiot Chancellors)?

It shouldn't.

Gold is held by Western central banks for exactly the same reason individuals ought to hold it: protection.

Central banks are accumulating gold because it cannot go BANG! like fiat currencies do.

Individuals should be doing the same — not being sidetracked by the distractions.

It's not about price. The story Jared shared with us demonstrates that beyond any doubt.

If you own gold, it will do all the heavy lifting for you when the time comes

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Sat, 02/22/2014 - 12:24 | 4465094 Greenskeeper_Carl
Greenskeeper_Carl's picture

good for her, but if it is for a storage of wealth, why pay more for gold in jewelry form?

 

Sat, 02/22/2014 - 12:25 | 4465101 svayambhu108
svayambhu108's picture

Maybe it goes for resale.

Sat, 02/22/2014 - 12:34 | 4465141 johnQpublic
johnQpublic's picture

enjoying a good conspiracy, as i do, the lack of concern for gold by central bankers almost makes me wonder if something is afoot

such as? you may ask

i saw a bit on discovery the other day

though a slow process, they were making gold in a lab somehow

scalable?

dont know

but it makes me wonder

Sat, 02/22/2014 - 12:38 | 4465162 BaBaBouy
BaBaBouy's picture

Very Smart People...
They Will Be Well Rewarded With Their GOLD Metal Money #1...

Sat, 02/22/2014 - 12:44 | 4465179 SWRichmond
SWRichmond's picture

Faced with the question, "why buy gold", Ms. "buy gold" did not want to say, but suggsted for her "own use."

Prepper?

I seem to recall Kyle Bass buying a shitload of nickels, and telling people "I just like nickels".

Sat, 02/22/2014 - 14:12 | 4465456 mjcOH1
mjcOH1's picture

"Faced with the question, "why buy gold", Ms. "buy gold" did not want to say, but suggsted for her "own use."

Prepper?"

 

Commissar's wife, doing her part to protect the people's wealth.

Sat, 02/22/2014 - 14:55 | 4465638 BoNeSxxx
BoNeSxxx's picture

Other competing China headlines:

 

A bag of rice fell from a shelf

A bicycle was stolen

Sat, 02/22/2014 - 22:43 | 4466935 mkkby
mkkby's picture

The media was ON HAND for some woman buying 2 ounces of gold.  Hmmm.  What a lucky coincidence. 

Who fronted her the money for this, and why???  Obviously this was guerrilla marketing, but for who?  Probably the jewelry store... but many other possibilities.

Sat, 02/22/2014 - 22:56 | 4466976 HamFistedIdiot
HamFistedIdiot's picture

Uhm. That was about THIRTY ounces of gold. Not a bad haul.

Sat, 02/22/2014 - 22:59 | 4466982 Soul Glow
Soul Glow's picture

China has been telling their citizens to buy gold for years.  I wouldn't be surprised if it were propoganda.

Sat, 02/22/2014 - 23:06 | 4466998 HamFistedIdiot
HamFistedIdiot's picture

China is proud of Mao's killing 80 million of its own. I really can't see the Chinese leadership giving a shit about the common Chinese person. There certainly is no safety net nor environmental regs. If the Yuan is backed by gold and becomes central to the world's reserve currency, there is a good chance the Chinese gov will confiscate. But let's hope that doesn't happen. It would be karmically appropriate if the Chinese found themselves wealthy one day, as 100 million fat Americans on the dole find out how vulnerable they are as the USD loses 70% of its purchasing power.

Sun, 02/23/2014 - 00:30 | 4467141 Soul Glow
Soul Glow's picture

If we should go there, because people here think the US .gov will confiscate their gold, imagine what China will do and how much gold they would get.

Sun, 02/23/2014 - 05:55 | 4467427 The Dunce
The Dunce's picture

OK.  OK.  We get it.  The Chinese worship gold.  You retards.

Sun, 02/23/2014 - 11:21 | 4467679 xavi1951
xavi1951's picture

That blog sucks!

Sun, 02/23/2014 - 12:06 | 4467762 chumbawamba
chumbawamba's picture

It certainly has no business being shamelessly whored here, but I do read the dude's blog occasionally.  I can't help, I keep falling victim to his minefield of links, clicking on them thinking I will be lead somewhere relevant but instead am treated to a log of his daily routine.  It's thrilling, actually.

I am Chumbawamba.

Sun, 02/23/2014 - 01:42 | 4467245 fonestar
fonestar's picture

DON'T BE LIKE CHINA.  CELEBRATE 223 DAY TOMORROW!

The potheads have had April 20th for many years now (420 the police code).  Nothing scares the Obamas, the Maos, the Cass Sunsteins, the social engineers, boot-lickers and state worshipers more than to see people go out and vote with their dollars!  Buy something firearms related tomorrow, preferably scary tactical looking with a folding stock and high capacity magazine.  Or better yet, take someone shooting who has never shot a gun before.

Celebrate your rights loudly and in their faces, or lose them forver.

Sun, 02/23/2014 - 11:12 | 4467664 CoonT
CoonT's picture

223 day? First I ever heard of it. Are you a member of CSSA or NFA? Damn, 223 day is here to stay! I think I'm going to the range today....

Closet canuckleheads and their "high cap mags" lol, love it!

Sun, 02/23/2014 - 13:36 | 4467988 fonestar
fonestar's picture

There are high capacity magazines in Canada.  Being able to arm and protect yourself is a god-given right accross the globe regardless of what any smarmy politician says.  Just like it is fonestar's god-given right to be able to send $1 billion dollars to Tehran without anyone knowing about it.

Sun, 02/23/2014 - 11:51 | 4467732 MSO
MSO's picture

April 20th? Why wait so long; 308 day is just a couple of weeks.

Sun, 02/23/2014 - 13:39 | 4467996 fonestar
fonestar's picture

Because 223 day is already established and it's associated with the liberal's darling, the AR-15.

Sun, 02/23/2014 - 12:09 | 4467766 chumbawamba
chumbawamba's picture

Dude, you obviously have never touched a joint in your life because you have no fucking clue where 420 originates.  You're a shameless hack.  I will give you my bitpenny if you promise to go away and spend it.

I am Chumbawamba.

Sun, 02/23/2014 - 13:33 | 4467978 fonestar
fonestar's picture

420 dipshit.  And no, fonestar couldn't care less about the potheads and what they do.

 

http://en.wikipedia.org/wiki/420_%28cannabis_culture%29

Sun, 02/23/2014 - 07:25 | 4467469 Papasmurf
Papasmurf's picture

When money enters a gold purchase it is held long term.  China has too much currencly in circulation.  An ideal solution is to encourage citzens to swap their excess currency for an asset they will hold forever.  What they spend on gold is not driving inflation in their country.  Gold sales are deflationary.

Sun, 02/23/2014 - 23:31 | 4469691 Tompooz
Tompooz's picture

"China has been telling their citizens to buy gold for years."

It hasn't. This is an urban myth, grown from a single news item on CCTV showing citizens purchasing gold, when the ban on such transactions was lifted.

 

Sat, 02/22/2014 - 22:58 | 4466979 Soul Glow
Soul Glow's picture

Personally I wouldn't buy gold jewelry, because of the premium, but any way it goes down, it won't matter if it is coins, bars, or on spindles - gold is a valuable commodity.

Sun, 02/23/2014 - 00:01 | 4467091 Real Estate Geek
Real Estate Geek's picture

Some, like Ferfal, recommend jewelry for resale. Sell your dear departed Mom's necklace an inch at a time, and you are perceived as broke by the buyer. Sell a gold maple, and people start to wonder how many more of 'em you have at home.

Sun, 02/23/2014 - 10:58 | 4467639 Sweet Chicken
Sweet Chicken's picture

Ding ding ding

Smartest thing I've read in a while concerning gold and the common mans attempt to survive through the economic shit storm heading our way. Accumulate as much scrap precious metal as you can. Those earring backings and left over shanks could easily be traded to feed your family in a pinch. It is quite easy to trade ounces of this without drawing too much attention to yourself, start throwing around coins and you might as well announce to everyone to rob your house. This is the primary reason silver bugs believe in silver so much. Well that and the complete destruction of this fiat monetary system we have. :)

Sat, 02/22/2014 - 23:01 | 4466986 Thomas
Thomas's picture

Got a little math problem brewin' there, although your point is still made.

Sat, 02/22/2014 - 14:17 | 4465458 Pool Shark
Pool Shark's picture

 

 

This is news?

880 grams isn't even 2 pounds

I'll bet there are a lot of Chinese buying much more than this...

[P.S., that's only about $37K melt value at yesterday's closing price. How many Chinese spent $37K on cars yesterday?]

 

 

Sat, 02/22/2014 - 15:00 | 4465663 mjcOH1
mjcOH1's picture

http://www.nytimes.com/2013/07/20/world/asia/survey-in-china-shows-wide-...

 

"Average annual income for a family in 2012 was 13,000 renminbi, or about $2,100. When broken down by geography, the survey results showed that the average amount in Shanghai, a huge coastal city, was just over 29,000 renminbi, or $4,700, while the average in Gansu Province, far from the coast in northwest China, was 11,400 renminbi, or just under $2,000. Average family income in urban areas was about $2,600, while it was $1,600 in rural areas."

 

soo....probably not most, unless they dumped 10 years of total income.   

but of course, all pigs are created equal.    just some are more equal.

Sat, 02/22/2014 - 17:51 | 4466207 Berspankme
Berspankme's picture

Averages lie. There are about 100 million Chinese that have stolen huge amounts of money. Yes, there are 1.29 billion that have nothing but 100 million is a lot of people to buy gold

Sat, 02/22/2014 - 19:02 | 4466388 FEDbuster
FEDbuster's picture

Assuming that all the jewelry bought was 14K, the purchase was about 16.5 troy oz of pure gold or about $22K worth.  Not really news worthy.  The better ZH Chinese gold purchase story was a few months ago when 10,000 people were waiting in line in the rain to buy gold for some Chinese holiday.  In the US, the only way to get 10,000 people to line up for something is to offer Section 8 Housing applications.

Sat, 02/22/2014 - 21:16 | 4466719 laomei
laomei's picture

Yea, Chinese don't really buy K-gold. It's all pure stuff that's in demand.

Sun, 02/23/2014 - 08:05 | 4467501 Gazooks
Gazooks's picture

or, ammo

Sat, 02/22/2014 - 22:39 | 4466921 laomei
laomei's picture

Averages lie because they ignore the fact that the rural areas drag it all down.  For the major cities, you're looking at median household around $15k or so.... which is dragged down by the migrant workers as well as being dragged down even further by the low-end jobs that provide room+board, as well as the many jobs which have low monthly but high cash (unreported) bonuses.  In reality, on average, a city-dweller is looking at something in the 20~30 range.  Of which, over half goes into savings.  Having $100k+ in cash is really not all that rare either, and a family with housing sorted can easily live off of the interest with all earnings going into savings.  Farmer income is also rather underreported, as it tends to be a cash business and farm-income is tax free, but look around at the homes they are building and you'll know they generally tend to not be all that poor.

Again, there is 100 trillion rmb of CASH sitting in the major banks accounts, not invested, just sitting there untouched.  If even a portion of that was used by the masses to buy gold, it would require mass imports on a scale never seen before in human history, and the forex reserves would be drained to cover it.  In the end, that gold is imported by the major banks, who would then kick the fiat back to the PBOC for forex used to import.  The PBOC can just as easily re-issue it to keep away deflation, which keeps costs here down in terms of forex, and the sucking continues.  USD has to go somewhere, and the only logical place is back to the US, which is then faced with inflation, so the government issues bonds, which are bought to lock away the liquidity... which raises the national debt, which causes more problems.  

Sat, 02/22/2014 - 12:39 | 4465163 climber
climber's picture

Alchemy is alive and well then. 

Sat, 02/22/2014 - 12:42 | 4465172 johnQpublic
Sat, 02/22/2014 - 12:56 | 4465210 johnQpublic
johnQpublic's picture

But Lab Director Stew Pidasso said Tuesday night the lab's scientists have produced economic quantities of the precious metal in a different way.

"The alchemists and the early nuclear scientists failed to realize that there's more than one way to skin a proton," Pidasso said. "Instead of trying to knock protons out of lead, protons can be borrowed from metals with lower atomic numbers and added to make gold."

Pidasso said the lab, a division of the U.S. Department of Energy, first achieved the transformation by borrowing protons from copper and nickel and adding them to bars of iron. But when copper and nickel supplies ran out, the lab began using protons from calcium, which is abundant in seashells along the nearby California coastline.

According to Pidasso, using proton borrowing and high-quality varnishes, the lab will be able to manufacture about 1,500 metric tonnes of gold per year, which, he predicted, might indefinitely fill what is estimated to be the gap between annual world gold demand and mine and scrap supply.

Pidasso said the laboratory's gold research long has been funded by grants from JPMorganChase & Co. and Goldman Sachs Group Inc. but that recently "enormous" help had been provided by Bear Stearns Cos.

 

 

edit:this is from 2007

Sat, 02/22/2014 - 12:57 | 4465219 Rusty Shorts
Rusty Shorts's picture
Transmuting Base Metals Into Gold

https://www.youtube.com/watch?v=cEf7rvl8RiQ

Sat, 02/22/2014 - 14:28 | 4465525 Pool Shark
Pool Shark's picture

Transmuting Paper into gold

http://www.youtube.com/watch?v=RMYy65CO7vk

 

Sat, 02/22/2014 - 14:32 | 4465550 Pool Shark
Pool Shark's picture

Transmuting Plastic into Gold

http://www.youtube.com/watch?v=eRa0Mnd93wE

Sun, 02/23/2014 - 05:34 | 4467405 Cacete de Ouro
Cacete de Ouro's picture

Transmuting gold into paper

www.lbma.org.uk

Sun, 02/23/2014 - 14:54 | 4468222 slightlyskeptical
slightlyskeptical's picture

Transmuting paper gold into nothing

WWW. GLDETF.com

 

Sat, 02/22/2014 - 14:44 | 4465597 SafelyGraze
SafelyGraze's picture

the gold-from-seashells article is fantastic

hugs,
ben dover, author and seashell collector

 

 

Sun, 02/23/2014 - 03:01 | 4467304 HulkHogan
HulkHogan's picture

Ben Dover from the San Francisco Comical. People will believe anything written on the internets. 

Sat, 02/22/2014 - 13:03 | 4465233 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

...and he powers the entire apparatus with a SINGLE 9V BATTERY! </sarc>

Sat, 02/22/2014 - 14:17 | 4465481 Zero Debt
Zero Debt's picture

Is the battery included?

Sat, 02/22/2014 - 17:29 | 4466136 RafterManFMJ
RafterManFMJ's picture

No, it's never included; is this your first day?

Sat, 02/22/2014 - 18:22 | 4466282 MillionDollarBoner_
MillionDollarBoner_'s picture

Sometimes it is included but its covered in chinese writing and lasts about a day before leaking into the circuitry and ruining the gizmo ;0)

Sat, 02/22/2014 - 13:19 | 4465274 gaoptimize
gaoptimize's picture

Can you imagine the temperature and energy requirements that would be required to pull this of in anything beyond micro-gram scale?  It is inconcievable.  The nuclear waste would be monsterous in volume.  It would require a very coherent particle-eqivalent to Light Amplifiacation by Stimulated Emission of Radiation (LASER) (PASER?) in the form of protons or neutrons, and as far as I know, such a trick is currently impossible and may always be.  In any case, the power requirement and waste generated would require its own planet.

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