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China Goes Dark: PBOC To Keep Goldbugs Clueless About Its Gold Buying Spree

Tyler Durden's picture




 

One of the more perplexing divergences that have plagued precious metal watchers and goldbugs when it comes to the great "black box" that is the world's biggest buyer of gold in recent years - China (which overtook India after that particular country established unprecedented capital controls to block the import of gold) is that on one hand China has been allowing the outside world to glimpse its ravenous buying of gold through the Hong Kong-Shenzhen corridor (where nearly 70% of the Chinese gold jewellery business is located) since Hong Kong customs provides a full breakdown of how much gold it exports into China, yet on the other the PBOC has refused to update its official gold holdings in exactly five years.

Recall that it was Zero Hedge who before anyone else in September 2011 disclosed not only what the reasons were for China's historic, and largely under the radar, gold buying spree - namely that while consumer demand for gold would rise, it was mostly the Chinese central bank that was the origin of China's seemingly endless demand. We got tangential confirmation as much when in January Shanghai Daily reported the PBOC was expected to announce its gold holdings have "more than doubled." Of course considering China's official gold inventory is a paltry 1054 tons, this would hardly surprise anyone at this point.

So now that everyone is breathing down the PBOC's neck to finally reveal - with a five year delay - just how much gold it does hold, the Chinese central bank has done a U-turn on its indirect transparency and, as Reuters reports, has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, "in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves."

"We have already started shipping material in directly to Beijing," said an industry source, who did not want to be named because he was not authorised to speak to the media. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.

But are about to get much, much bigger.

In a nutshell, going forward China can continue importing hundreds of tons monthly, but without Hong Kong being the main transit route and without its monthly export updates, nobody will have a concrete number of just how much gold China is importing.

More from Reuters:

The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong's pole position in China's gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied $53 billion (31 billion pounds) worth of gold to the mainland.

Finally, with a five year delay, the PBOC has finally woken up not only to the data disclosure...

One of the reasons why China could be encouraging more direct imports was because it wanted to avoid taking the Hong Kong-to-Shenzhen route that makes its gold purchases public, while China wants to keep the trade a secret, sources said.

 

"There is a view that why should people know how much China is buying," said one of the sources at a bullion banking operation in China. "With the Hong Kong route, there is a lot of transparency and people can easily monitor what is going in and out."

 

Another source said the move to open up Beijing "is partly driven by the fact that Hong Kong is perhaps a little too transparent", but it is also to accommodate upcoming free-trade zones and non-jewellery demand.

... but the discrepancies:

Besides the 1,160 tonnes of gold imported from Hong Kong last year, China had about 428 tonnes of local production. The WGC has said Chinese demand in 2013 was 1,066 tonnes, leaving industry guessing about the "surplus" of around 522 tonnes, not including the amount of direct imports.

 

The central bank last disclosed its gold reserves in 2009, when it announced that its bullion holdings had risen to 1,054 tonnes from 600 tonnes in 2003.

Which goes back to the original question: just how much gold does the PBOC own, and what other catalyst is it waiting for before it provides the much anticipated update:

Central banks tend to be very secretive about their gold purchases and sales because prices are extremely sensitive to their trades. Rumours last year of Cyprus selling its gold reserves to prop up finances sent the metal down more than 10 percent over two days - its biggest such decline in 30 years.

 

...

 

"The major increase in gold supply to the Chinese market in 2012 and especially 2013 could be partly related to large-scale official purchases," according to a Klapwijk-led survey for the WGC that was released last week.

 

The report said while a part of the surplus was being used for commodity financing deals, some of it could be for the PBOC as well.

 

Rumours on PBOC's gold reserves range from 3,000 tonnes to 5,000 tonnes. The United States is the biggest holder of gold reserves with over 8,000 tonnes.

 

Even a 1,000 tonne increase from last announced levels could prompt a jump in gold prices, which would make the PBOC very cautious about the timing of any announcement, said two China gold market analysts, who didn't want to be named due to the sensitivity of the issue.

One thing is certain: it is only a matter of time before China does reveal how much additional gold its has bought since April 2009, the date of its last official update. One other thing that is certain: the PBOC (and everyone else who has been piggybacking on this trade) has been able to buy up thousands of tons of physical gold at cheap prices not only due to the relentless manipulation of paper gold prices by central banks and their market proxies, but also by China itself: recall that it was Zero Hedge that first explained "How China Imported A Record $70 Billion In Physical Gold Without Sending The Price Of Gold Soaring." In short, it had to do with gold's domiannt role (more so than copper) in Chinese financing deals, in which physical is bought in the spot market while gold futures are sold at the same time.

And since the physical gold would likely remain in China no matter what (likely transferred over to satisfy consumer demand), we suggested that the imminent unwind of various Chinese gold-backed funding deals, in addition to any reports out of the PBOC, would further add to the upward pressure on gold once financing deal intermediaries, were forced to cover their forward market shorts.

In either case, what the latest news out of China means is that what happens to gold once it enters the Chinese economy, where it is used not only as a simple commodity store of value, and money (much to the chagrin of the Chairmanwoman) but also as a major component of the carry-trade enabled gold financing deals, will be even more nebulous and an even bigger mystery than ever before. Just as the gold accumulating central bank wants it.

Still, if there is one thing that gives us comfort, it is that as we reported over the weekend, when it comes to the ordinary person on the street, the demand for physical, not paper, gold is higher than ever.

 

It is only a matter of time before this demand finally manifests itself in the manipulated price as well.

 

 

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Mon, 04/21/2014 - 13:05 | 4679934 LawsofPhysics
LawsofPhysics's picture

Tell me again Krugman, what's the significance of "prices" if there is no such thing as price discovery...

shouldn't be long now... 


Mon, 04/21/2014 - 13:05 | 4679937 Bindar Dundat
Bindar Dundat's picture

Stop -- who cares about gold -- I can't get the image of that  car out of my head. Someone shoot me!

Mon, 04/21/2014 - 13:08 | 4679947 RafterManFMJ
RafterManFMJ's picture

Where's there's smoke, there's fire! 

They are doing everything but explicitly instructing you to buy gold, and buy it with both hands.  And yet the sheeple sleep...

Mon, 04/21/2014 - 14:31 | 4680257 Oh regional Indian
Oh regional Indian's picture

Should we call it Zero Dark 30,000?

Mon, 04/21/2014 - 14:38 | 4680277 BaBaBouy
BaBaBouy's picture

THIS IS THE WAY YOU ACCUMULATE VERY VERY VERY CHEAP ... GOLD ...

Just As FORT Knox Is Void Of Any USA-OWNED GOLD.?.

Mon, 04/21/2014 - 16:02 | 4680571 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

The Central Bank of DoChenRollingBearing also buys gold from time to time.

But, it will follow the Bank fo China in not telling the world how much.

Mon, 04/21/2014 - 16:03 | 4680572 DoChenRollingBearing
DoChenRollingBearing's picture

dupe, sorry

Mon, 04/21/2014 - 13:12 | 4679961 goldhedge
goldhedge's picture

Imagine if the car was gold plated then.

 

Mon, 04/21/2014 - 13:38 | 4680079 idea_hamster
idea_hamster's picture

to accommodate upcoming ... non-jewellery demand.

Thank you and good night.

Mon, 04/21/2014 - 13:12 | 4679962 Winston Churchill
Winston Churchill's picture

Just imagine Hitlary naked, you will forget the car.
Probably insane, but no car.

Mon, 04/21/2014 - 13:18 | 4679991 ParkAveFlasher
ParkAveFlasher's picture

IT BURNS US.  MAKES IT STOPSES.

Mon, 04/21/2014 - 13:43 | 4680098 pods
pods's picture

<golem.......golem>

Mon, 04/21/2014 - 13:15 | 4679981 1stepcloser
1stepcloser's picture

The american made False Flag is superior in every way

Mon, 04/21/2014 - 13:30 | 4680034 unrulian
unrulian's picture

 

Stop -- who cares about gold -- I can't get the image of that  car out of my head. Someone shoot me!

 

this might help: http://eyebleach.com/

 

 

Mon, 04/21/2014 - 13:30 | 4680036 unrulian
unrulian's picture

 

Stop -- who cares about gold -- I can't get the image of that  car out of my head. Someone shoot me!

 

this might help: http://eyebleach.com/

 

 

Mon, 04/21/2014 - 13:40 | 4680088 Bunga Bunga
Bunga Bunga's picture

Even if gold becomes worthless and you are broke, you can still decorate your wife with that and therefore she will love you. Gold is like an insurance for bad times, no matter what the prices does.

Mon, 04/21/2014 - 13:31 | 4680045 Mr Pink
Mr Pink's picture

Let the Chinese have their gold..We have snortable powdered booze!

http://gawker.com/powdered-alcohol-coming-to-a-liquor-store-near-you-156...

Mon, 04/21/2014 - 14:45 | 4680326 post turtle saver
post turtle saver's picture

China goes dark... ROR... like they were ever "light" to begin with... say the words "Chinese accounting" to anyone close to finances and get ready for some long and loud belly laughs

Mon, 04/21/2014 - 17:09 | 4680772 Urban Redneck
Urban Redneck's picture

China may have gone dark but someone switched on a light at the other end of the underground railroad a few months ago. You just have to know where to look...

http://www.ezv.admin.ch/themen/04096/index.html?lang=en

Jack Lew must have pissed someone off because there's actually an official English translation.

Mon, 04/21/2014 - 13:12 | 4679963 magnumpk
magnumpk's picture

It occurs to me that perhaps China is waiting for a crisis/collapse in the dollar before it announces its holdings.  Thoughts?

Mon, 04/21/2014 - 13:24 | 4680014 Amish Hacker
Amish Hacker's picture

Or waiting for the right moment to cause the collapse of the dollar by announcing---and displaying--- its true gold holdings (probably some multiple of the numbers in this article), while demanding a new international monetary system that's friendlier to the yuan. 

Mon, 04/21/2014 - 13:40 | 4680076 McMolotov
McMolotov's picture

Half-joking nerd hypothesis: Animosity between the US and China might be a ruse, and at some point the two countries could form a military and economic alliance to take over the rest of the world, like in Firefly.

Mon, 04/21/2014 - 17:21 | 4680805 JRev
JRev's picture

Down-votes from mental midgets abound, because though you jest, that's EXACTLY what's going on. China is a colony of the Anglo-American Establishment, as is America. Have been for a long time. The fact that so few, even within an "awake and aware" community, recognize the history of the Rhodes Roundtable in an intimate enough fashion to understand that a wealth transfer from West to East is about equalizing commodity holdings for a new global monetary order, not some grandiose "economic war," is disheartening, to say the least.

...or do some of you dopes actually believe the Empire's Hong Kong handover earlier this century was genuine? Don't make me laugh. Gold Standards are ALWAYS a predicate to fiat tyranny, and a global Gold Standard is a prerequisite to appease not only individual sound monetarists, but more importantly Nation-States, ahead of the ushering in of global fiat control. Unless, of course, you also believe that the Rockefeller Foundation-funded National Geographic provides accurate metrics for mined and refined above-ground gold available for investment, in which case you're probably beyond help. America has much more gold than we're being told; the Rhodesians are bull-headed warmongers, but they're not stupid.

 

Educate... before it's too late.
http://peacerevolution.podomatic.com/entry/2014-04-04T04_47_18-07_00

 

Mon, 04/21/2014 - 13:25 | 4680019 Doubleguns
Doubleguns's picture

It would add an additional crushing blow to the dollar during a dollar crisis or could be strategic tool to keep USA toeing the line so to speak. 

Mon, 04/21/2014 - 13:29 | 4680030 HardAssets
HardAssets's picture

Well, if you REALLY want to get more of something -

wouldn't you want those you might compete with in the market remain in the dark?

In a collapse, those with gold might very well announce gold currency backing of their currency, if even partial backing.

Mon, 04/21/2014 - 13:13 | 4679966 Soul Glow
Soul Glow's picture

Well, I guess that gives us more time to buy too.

Mon, 04/21/2014 - 15:31 | 4680491 DosZap
DosZap's picture

"in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves."

 

It MIGHT be boosting reserves, ROTFLMAO!!!
Mon, 04/21/2014 - 13:13 | 4679969 savedeposit
savedeposit's picture

You maybe can't eat gold, but he you can drink it if you like !

https://www.google.nl/search?q=bols+goldstrike

Mon, 04/21/2014 - 13:18 | 4679994 Troy Ounce
Troy Ounce's picture

 

 

No, you CAN eat gold: http://www.ediblegold.com/index.asp

Mon, 04/21/2014 - 13:27 | 4680023 john39
john39's picture

gold was medicine in ancient times, and still is.  similar to silver... can be very beneficial to the body when done properly.

Mon, 04/21/2014 - 13:14 | 4679975 Fix-ItSilly
Fix-ItSilly's picture

We can't get an informative article on Federal Reserve gold holdings, but someone feels they can write with authority about China's?

Mon, 04/21/2014 - 13:15 | 4679986 Winston Churchill
Winston Churchill's picture

What FedRes gold holdings ?

Mon, 04/21/2014 - 13:15 | 4679977 JustObserving
JustObserving's picture

Rumours last year of Cyprus selling its gold reserves to prop up finances sent the metal down more than 10 percent over two days - its biggest such decline in 30 years

That is absolutely ridiculous.  Cyprus had only 13.9 tonnes of gold worth about $550 million compared to gold bullion in the world worth about $3 trillion.  So Cyprus gold represented 0.018% of world gold bullion and yet it was enough to drive down gold prices down by 10% or $300 billion.

The Fed is constantly attacking gold (and silver) using High Frequency Trading computers.  The Cyprus gold sale rumor was just a red herring.


Mon, 04/21/2014 - 13:28 | 4680032 Amish Hacker
Amish Hacker's picture

As was the story, repeatedly planted in the media over the past few years, that the IMF was going to sell its gold and use the proceeds "to help the poorer nations of the world."

Mon, 04/21/2014 - 13:38 | 4680081 JustObserving
JustObserving's picture

The icing on the cake was that Cyprus decided not to sell its gold.  So a tiny phantom sale allowed the Fed to steal $300 billion from gold investors.

Cyprus central bank has no plan to sell gold reserves

Here- Reuters, Fri Dec 13, 2013

This article was by some quirk was just released on Friday the 13th - I suppose to show what a joke this was on gold investors (that Cyprus was ever going to sell its gold).

http://seekingalpha.com/article/1907421-gold-completing-bottom-as-cyprus...

Cyprus has no plan to sell gold reserves to fund its 10 billion euro ($13.75 billion) bailout, officials at the central bank said on Friday.

Cyprus's government in April undertook to look into selling its gold reserves to raise 400 million euros to help finance part of its EU-IMF bailout.

 "We do not intend to sell the gold," a senior official at the central bank told Reuters, declining to be identified.

http://www.reuters.com/article/2013/12/13/cyprus-gold-idUSL6N0JS1N220131...

Mon, 04/21/2014 - 14:51 | 4680353 Bastiat
Bastiat's picture

The "IMF Gold" was mostly loaned to the IMF by, guess who?  The US.  They can't sell it without explicit permission from the congress if I recall correctly.  Originally that was to provide some protection--not that it would now.

Mon, 04/21/2014 - 15:48 | 4680534 USGrant
USGrant's picture

Wasn't Strass-Kahn deposed as head of the IMF because he began to question wheather or not IMF gold was still at the NY FED? The answer must be no.

Mon, 04/21/2014 - 19:56 | 4681205 bonin006
bonin006's picture

I think it was because he proposed replacing the USD with IMF SDR's, and also, because he was going to run against Sarkozy, France was quick to reject his claim of diplomatic immunity.

Mon, 04/21/2014 - 13:32 | 4680046 Latitude25
Latitude25's picture

It's incredible the level of disinformation even with articles like this one which support high demand.

Mon, 04/21/2014 - 13:33 | 4680048 Kaiser Sousa
Kaiser Sousa's picture

"The Fed is constantly attacking gold (and silver) using High Frequency Trading computers."

u mean like last night....when no Asian markets would be opening....

http://www.kitco.com/charts/livesilver.html

Mon, 04/21/2014 - 14:28 | 4680248 Millivanilli
Millivanilli's picture

I saw that too.  Laughed.  Don't really give a fuck at this point.  I stack and stack because it is really beautiful stuff, and important for industry.

Mon, 04/21/2014 - 14:51 | 4680350 rosiescenario
rosiescenario's picture

Yeah....man that was about as obvious as it gets.

Mon, 04/21/2014 - 13:16 | 4679989 Troy Ounce
Troy Ounce's picture

 

 

Different continents, same fuckers in charge:

 

http://nymag.com/daily/intelligencer/2013/11/jpmorgans-marginally-effect...

Mon, 04/21/2014 - 13:17 | 4679992 Al Huxley
Al Huxley's picture

Regardless, the traitorous FIs who are profiting by selling out the western world's real money, simultaneously manipulating the price artificially lower (and no doubt filling their own pockets at the bottoms) will probably succeed in setting new lows on this leg down.   Unfortunately, when the magnitude of their treason finally becomes known, they'll likely never be held accountable for their role in the destruction of our financial well being.  Bankers of the worst kind truly own the world now.

Mon, 04/21/2014 - 13:25 | 4680010 LawsofPhysics
LawsofPhysics's picture

I'd argue that the bankers/politicians are simply the primary mechanism by which a relative few people/families maintain and control the population.  These people have "title" to the productive capacity of numerous real assets.  Land, oil wells, mines, factories, tech companies etc.

It is and will always be about power and control and understanding what real wealth is and real wealth has nothing to do with paper, aside from a mechanism to usurp individual rights and rights of ownership etc.

Mon, 04/21/2014 - 13:43 | 4680097 Al Huxley
Al Huxley's picture

That's why I qualified it as 'bankers of the worst kind' - I think we're talking about the same people/families. I'm not referring to the regionals, small commercials or even the big dumbass TBTFs by and large...

Mon, 04/21/2014 - 13:25 | 4680018 Latitude25
Latitude25's picture

I really don't think new lows are even wanted at this point since it would drive Asian buyers into another frenzy which is undesirable in the west  since it only accelerates default.

Mon, 04/21/2014 - 17:43 | 4680857 heavy.metal
heavy.metal's picture

I've been expecting new lows since last december's sub-$1200 lows. But then I noticed how the GLD raids have become less and less effective. It's been at 800 tons since the beginning of 2014!!

This means GLD is in "strong hands" of sorts. Or as strong as it gets for GLD (if they're not giants with the ability to redeem, it's a bunch of clueless idiots holding IOUs).

In any case, if they want to extract more physical out of it again, they will have to do a REAL CARNAGE to the price, which for GLD suckers it means panic-sell and for Asian buyers (and me) means panic-buy.

I don't think the market can stand it. But if they're so desperate to try, I'd say let 'em.

 

Mon, 04/21/2014 - 13:22 | 4680005 beegle
beegle's picture

why would the chinese ever want to show the world that they are buying lots of gold ? whats the point ? 

Mon, 04/21/2014 - 14:24 | 4680239 NotApplicable
NotApplicable's picture

Pissing off the goldless Germans would be about the only reason I can fathom.

Mon, 04/21/2014 - 14:42 | 4680310 Oquities
Oquities's picture

IF their plan is announcing a gold-backed yuan, they will want transparency of purchases to convince currency markets how much gold they own.

Mon, 04/21/2014 - 13:24 | 4680006 Matt_Master
Matt_Master's picture

Their gold holdings is like an ace card up their sleeve which they will only use at the right time.  Only fools show their hand for no reason.

Mon, 04/21/2014 - 13:22 | 4680008 Latitude25
Latitude25's picture

Only one cursory mention of the SGE where as Koos Jansen has reported that nearly 2200 tons were withdrawn in 2013.  That was my belief for 2013 Chinese gold demand, not the WGC figure for Hong Kong.  In any event a new Beijing import point will certainly confuse Koos's data as well as everyone elses'.  In that case we'll just have to look at GOFO rates to get an idea about what is really happening or simply the disappearance of gold from LCS's and Western physical sellers.

Mon, 04/21/2014 - 13:27 | 4680011 Conax
Conax's picture

They do throw that number around, don't they?

You know, the American's 8000 tons. It's like a lullaby.

"Go to sleep, little sheep

We still have 8000

Don't you fret

about the debt

take your ambien, sleep tight"

 

Mon, 04/21/2014 - 13:42 | 4680095 therevolutionwas
therevolutionwas's picture

Yes.  You can't count it, go look at it, audit the books on it, but, like the emperor's clothes, it's there.

Mon, 04/21/2014 - 13:44 | 4680102 Al Huxley
Al Huxley's picture

I bet you could ask 100 people on any street in the US how much gold is supposedly owned and held at Fort Knox, etc... and 99 of them wouldn't even have a clue what you're talking about.

Mon, 04/21/2014 - 13:48 | 4680120 Tinky
Tinky's picture

Amanda Knox? She's hot!

Mon, 04/21/2014 - 13:26 | 4680020 elwind45
elwind45's picture

"Central bankers don't like to broadcast their gold buying"in fear of what ? A higher currency something that China does or does not want? I believe Beijing is opening inside out and not outside in which makesa market and again THANKS FOR THE MASSAGE

Mon, 04/21/2014 - 13:27 | 4680024 Kirk2NCC1701
Kirk2NCC1701's picture

Dear China, Kirk is happy to buy gold for you and deliver it via the (Free) Entreprise. 

No Clingons or Ferengi aboard my vessel.  Contact me at Kirk2NCC1701 at hush mail.  Shay shay nee.

Mon, 04/21/2014 - 14:41 | 4680305 The man with po...
The man with pointy horns's picture

Ferengi DO consider gold a barbarous relic though.

Mon, 04/21/2014 - 13:33 | 4680028 AE911Truth
AE911Truth's picture

It is not possible to continue to hide the secret gold

I do not ask you to believe any of the following. I do ask that you check it out for yourself.

A modern SmartPhone (Android or IOS) has 99% of the components needed (CPU,

Memory, Battery, Display, and Audio I/O port) for an operational hand-held 200 gram

gravity meter sensitive enough to detect hundreds of tons of refined gold buried tens of

meters underground. Experimental evidence (See Source 1) suggests that gravitational

field strength information exists within the noise level signal of a typical electrolytic

capacitor. Modern signal processing techniques (within the CPU and Memory capacity of

a modern SmartPhone) can ferret out the gravity signal from other (EMI & Thermal) noise.

Using an internal AGPS receiver, the enhanced gravity signal intensity can be adjusted for

known variances (Sun, Moon, & Milky Way) then integrated over space and time to derive

quantity (in Metric Tons (Source 2 page 66)) of differentially denser mass (gold) buried in

relatively less dense surrounding earth.

The Operational Amplifier which costs USD $3, and the Electrolytic Capacitor which cost

$6 are easily packaged in a format that can be plugged into a standard SmartPhone Audio

jack. This plug-in module can be manufactured and sold profitably for under $30.

If millions of people became aware of the locations of massive stores of gold and had

access to low cost equipment that provided irrefutable physical evidence these quantities

of gold exist in these locations, I do not think these millions of people would be content to

continue to use debt as money.

Throughout history the use of paper as money has always eventually failed. This time is no

different.

Source 1:

http://www.rexresearch.com/1hodorhy4/smplgmtr/smplgmtr.htm

Source 2:

http://www.initialexploration.com/uploads/HP_Gravity_Surveys.pdf

http://www.gizmag.com/3d-robotics-iris-gps-guided-quadcopter-drone/28818/

https://www.dropbox.com/s/dxqi3ae5ba8lube/IMG_0112.JPG

https://www.dropbox.com/s/6aa8ril047c548o/IMG_0164.JPG

Interesting places to look:

Under East Avenue, in front of BSP, The Central Bank of the Philippines

Under the swimming pool of the Philippine Plaza hotel

177 sites identified by Bob Curtis referenced in Seagrave Gold Warriors

and hundreds of smaller undocumented sites.

Mon, 04/21/2014 - 14:52 | 4680360 giggler321
giggler321's picture

>>It is not possible to continue to hide the secret gold

Two ramifications,

1. All the people on ZH who bought and buried yellow will likely loose it to a nerdy tech who lost out on BTC and stumbled upon someone's stash while playing with their iphone they got from their college loan and an op-amp from ebay.

2. We can all verify Fort Knox content (forget China).

 

Mon, 04/21/2014 - 13:29 | 4680031 bankonzhongguo
bankonzhongguo's picture

The plan is to physically store more gold in China than exists in the US and London combined.  Maybe 10 years, but it took the same amount of time to put someone on the Moon.

There will not be any public declarations, except around the 5-6000 ton mark, they will get a little more frisky - like with Russia and the petrodollar will be permanently relativized.

The Chinese understand that owning the world's machines allows them to accumulate the world's gold and for a time hold the World's reserve currency. Whatever that is worth.  I think the US would be hard pressed to re-industrialize itself considering the loss of so much brain power after dumbing down the education system and firing all those experienced engineers over decades.  Hire all the robots you want.  Robots can't do everything.

Reserve vaults are being built across China with the same vigor and excitement of building the tomb of Qin Shi Huang.

China is looking at a 100 year plan.  The US is considering incarcerating more of its citizens and legalize cannabis to make the natives less restless for the political class to rape, drain and other wise consolidate "scarce" resources.

The stunning revaluation for the Chinese is that Western elites would have such contempt for their own people.

Engagement.  That's going to leave a mark.

 

Mon, 04/21/2014 - 15:01 | 4680387 giggler321
giggler321's picture

China's not exactly debt free, being the most populated continent it's likely got some of the same problems we have covering our own debt and new desired debt with any metal we have.

>>Robots can't do everything.

Ask my old primary school teacher, while camping in the summer being awoke by a strange buzzing sound from tent next door.  I bet she would disagree with your statement.

 

Mon, 04/21/2014 - 15:46 | 4680516 DosZap
DosZap's picture

There will not be any public declarations, except around the 5-6000 ton mark, they will get a little more frisky - like with Russia and the petrodollar will be permanently relativized.

 

My $ is they have doubled that amount LONG ago.I would think they are nipping at India's holding NOW.

Mon, 04/21/2014 - 13:30 | 4680040 elwind45
elwind45's picture

MISREAD THIS PIECE AND GET CHOPPED INTO LITTLE BITTY PIECES really!

Mon, 04/21/2014 - 13:34 | 4680055 Kirk2NCC1701
Kirk2NCC1701's picture

When TSHTF, we in the West will only be left with our fiat Bitchcoin.

Keep packing, stacking and racking.

Mon, 04/21/2014 - 15:54 | 4680553 FinalEvent
FinalEvent's picture

Yes indeed, and that's why you should hedge your gold with bitcoin.

They both go to the moon, together.

Mon, 04/21/2014 - 13:35 | 4680057 message2gowri
message2gowri's picture

GOLD is not a GOOD investment at this point of time due to Price Suppression and Negative Campaigning by Mass Media Controlled by Bankers. So what am I do with my Hard Earned money Give to the Bankers ??? or just spend it while it worth for something??? or Buy a Gold and Burry it in my Back Yard, Let the Pit Bulls pie on it!! 

Mon, 04/21/2014 - 13:48 | 4680119 Al Huxley
Al Huxley's picture

Yeah, best just to spend it, new IPad or smart TV or whatever, then at some future date if the $ is worth shit you can probably always sell obsolete toys to pay for food.  Winning strategy by 90% of the population.  9% are stocking up on valuable treasuries.

Mon, 04/21/2014 - 13:35 | 4680060 elwind45
elwind45's picture

Is it me or does it seem like the only thing demanding RMB(yawn) is official or third world-ish

Mon, 04/21/2014 - 14:18 | 4680090 socalbeach
socalbeach's picture

I prefer to use a different metric in determining whether or not gold is a buy here, comparing the value of above ground gold to the monetary base.  We're now at about the same level as we were in 2002 when that ratio reached a minimum, right before it rocketed to the upside.

The rationale behind that comparison is that the monetary base in the current system plays the exact same role as gold did when it was convertible at a fixed dollar price.  The monetary base is currency and coins ("cash") held by the public, plus cash held in bank vaults, plus bank reserves on deposit with the Fed.  The correspondence is that cash held by the public now is equivalent to gold held by the public then, cash held by banks now is equivalent to gold held by banks then, and finally reserves held by the Fed now is the same as gold on deposit with the Fed in the old system.

To take that analogy further, currently commercial bank credit increases the money supply (M2, MZM, etc.), but not the monetary base, and in the gold backed system commercial bank credit obviously didn't increase the gold supply either. The Fed increasing the monetary base with QE is the same as gold mining companies increasing the above ground gold supply in the old system.

One caveat is that if you look at total money supply (for example, M2) which includes commercial bank credit, the gold price vs M2 is now higher than it was in 2002.  However, that's not the correct comparison imo. Another caveat is that the Fed could conceivably start reducing the monetary base once tapering is complete.  Not likely, but not impossible either.

(I posted a spreadsheet chart several months ago showing the relationships, but my most recently updated chart is about a month old.)

Mon, 04/21/2014 - 23:20 | 4681639 StychoKiller
StychoKiller's picture

A lot of people are gonna find out the hard way that paper is only worth around $85/ton, no matter how much ink it has on it!

Mon, 04/21/2014 - 13:42 | 4680093 Kirk2NCC1701
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<--- A: China's AU is to back the CNY as a Regional Reserve Currency

<--- A: China's AU is to get a bigger share of the SDR* at IMF's Western-dominated currency table.

Q: What's China really up to?  The answer makes ALL the difference in the world.

* http://www.imf.org/external/np/fin/data/rms_sdrv.aspx

Mon, 04/21/2014 - 13:50 | 4680128 Al Huxley
Al Huxley's picture

Maybe they just love the bankrupt west so much that they're doing all they can to prop up our inflated standard of living, with the willing sacrifices made by 1.5 billion chinese citizens to keep prices low low low at Walmart for the under-educated, under-employed, out-gamed average American consumer.

Mon, 04/21/2014 - 14:30 | 4680254 NotApplicable
NotApplicable's picture

Could be both. Especially once a regional currency gets going.

Mon, 04/21/2014 - 15:11 | 4680425 viahj
viahj's picture

i voted #2, SDR. 

with the USD and EUR being rebalanced lower in the basket with the addition of the Yuan and the possible elimination of the Yen. 

Mon, 04/21/2014 - 13:45 | 4680096 MFL8240
MFL8240's picture

Who cares what China buys in Gold, the real story is how little Gold is owned by Americans and that they beieve in paper money. We unfortuantely are the most corrupt country with liars in the media, liars in DC (false financial reports), lying by the Federal Reserve, equities run higher on printed money, and algo driven computerized buying, false information about banks’ exposure to derivatives, false accounting of bank assets, false computation of inflation and so on and so forth so, who gives a shit how much Gold China buys, the real story is how much Gold has left the West and how little real money is owned by Americans snookered by this corruption.

Mon, 04/21/2014 - 14:01 | 4680101 Quinvarius
Quinvarius's picture

The more data there is on the loss of gold in the West, the harder the child bankers in the West try to ram down the price.  China should announce a giant number so they can get the rest of it.  In the West ,ponzi denial and gold debt are a terminal combination.  Bankers like to do the opposite of sane and obvious hoping for some tail event to save them.

Mon, 04/21/2014 - 19:29 | 4681133 Vracar
Vracar's picture

Tail event...lets see...war with russians maybe. When nothing more can be done(stolen) they take us to war. 

Mon, 04/21/2014 - 13:49 | 4680126 elwind45
elwind45's picture

What would you do if you found out your neighbor was going to macaw and pulling thousands out of an ATM to buy chips instead of coins or if the government "found out" they would have to be buying gold local and further wasting investment capital on HAPPY FAMILY syndrome? Just making accommodations for coming RMB disaster

Mon, 04/21/2014 - 13:53 | 4680139 RealityCheque
RealityCheque's picture

Fair enough. 

The chinese are saying "fuck the Gwai Lo", what right do we have to know how much metal they have? The West is declining rapidly and the East is taking its place as the centre of the world. They don't have to listen to anything we say or ask of them.

Stack away China. Just like a few still-sane people in the West, we will all enjoy these manipulated prices while they're here.

Mon, 04/21/2014 - 14:01 | 4680165 Jannn
Jannn's picture

MY fucking god, Zero Hedge's reporting on Chinese gold demand is terrible. These guys might know something about other markets, not on the Chinese gold market...

Mon, 04/21/2014 - 14:27 | 4680244 Latitude25
Latitude25's picture

I believe ZH is consciously ignoring reality.  Who bought ZH a couple of years ago?  The Chinese or GS?

Mon, 04/21/2014 - 14:34 | 4680271 NotApplicable
NotApplicable's picture

Care to enlighten us unwashed masses?

Usually when someone calls someone else out, they provide rationale backing the claim. Otherwise, you're just another unenlightened troll.

Mon, 04/21/2014 - 14:17 | 4680215 hobopants
hobopants's picture

Chinese see stupid westerners manipulating the gold price and are able to buy massive amounts without moving the price one way or the other. We suck.

Mon, 04/21/2014 - 14:30 | 4680255 DavosSherman
DavosSherman's picture

8,000 tons.

Hmmm, when one does the supply math one has to wonder where China got physical from.

Germany will be waiting a while for their gold.

Mon, 04/21/2014 - 14:32 | 4680256 GIABO
GIABO's picture

There will come a time when the "sheeple" realize the emperor has no clothes. It is all a lie... stack on stackers...

Mon, 04/21/2014 - 14:32 | 4680261 caShOnlY
caShOnlY's picture

a guy walks into a bar with a parrot on his shoulder.  the parrot immediately asks the bartender: "hey buddy did you hear the one about the US having 8,000 tons of gold?" the bartender laughs so hard he lets the parrot drink for free all night.

Mon, 04/21/2014 - 14:47 | 4680334 besnook
besnook's picture

they don't call him yellow man for the color of his skin. white man will be yellow man's burden for the rest of the century.

Mon, 04/21/2014 - 14:57 | 4680376 MollyHacker
MollyHacker's picture

I suspect that PBOC has permitted imports through Beijing in the aftermath of some controversy over the questionably semi-secretive cargo (black-market gold) on-board the Malaysia Aircraft 370 and the blowback-fallout it could have been made behind the curtains of truth & deceptions.

Mon, 04/21/2014 - 14:57 | 4680377 Joe Tierney
Joe Tierney's picture

China-Russia main motive is to immunize themselves against the inevitable dollar crash.

 

As a bonus, they're also thereby positioning themselves to be able to cause such a crash. But I think they're frantic to accomplish the immunization task - and that's what characterizes their efforts and strategy. Because in many ways, with respect to financial weapons, you're in uncharted territory - Russia-China simply have to be nervous about actually trying to pull the trigger on a dollar collapse. What if somehow it didn't work? Or what if it also blew up in their own faces due to some unforseen repercussion(s)?

 

That increasingly potent financial weapon - if that's indeed what it is - will be held in reserve (pardon the pun) for when it's open war between East and West and they want to 'go nuclear' against the dollar.

Mon, 04/21/2014 - 15:11 | 4680396 Kirk2NCC1701
Kirk2NCC1701's picture

TRUE Money is backed by three things and only three things: Resources, Energy and Labor. 

Fiat Money (aka Currency) is backed by fiat Taxes + Force.

In the West, TPTB have plenty of fiat Currency, but less and less of Real Money.  Real Money, real wealth is ALL AROUND US, to which we ALL have access - should we choose to do so.  But Currency is in the hands of a few.

ANY country or group of countries can choose to back their national or Regional Reserve Currency with Natural Resources plus Energy.  The fact that they haven't, is a testament to both their short-sightedness/stupidity and moral weakness, that allows other nations with more vision and determination to rule over them.

Real Money can and should(!) be backed by baskets of Real Assets: baskets of Precious Metal, Strategic Metals, Rare Earth Materials, Oil, Gas, Electricity, Precious Bio-Mass (e.g., beans, corn, wheat, rice, soy, chicken, pork, beef, soft & hard lumber), and Water.

In the final analysis, you need:  Mass, Energy and Intelligent Labor to create... anything and everything.  Now think of what the fundamental units of each of these three are: kg, Watt, Hr.  These are Universal and Timeless.

All else is bullshit, lies and deception.  Plan accordingly.

Kirk out.

Mon, 04/21/2014 - 15:18 | 4680447 Spungo
Spungo's picture

1 trillion US Dollars at $1400 per ounce = 714285714 troy ounces
= 24489 tons of gold

They also could have spent their trillion dollars on other things like JP Morgan headquarters in Manhattan. I wouldn't be overly shocked if China had all of the gold America once claimed to have.

Mon, 04/21/2014 - 16:58 | 4680728 silverstud
silverstud's picture

and the new global policeman will not only just pretend to be an enforcer of democracy .. they will blatantly rape and pillage everything they can.

Mon, 04/21/2014 - 16:56 | 4680729 silverstud
silverstud's picture

We have to be careful about what we wish for... if China and Russia prevail economically as the dollar fades they will take no prisoners. 

Mon, 04/21/2014 - 18:29 | 4681010 BanksterSlayer
BanksterSlayer's picture

Last Christmas 2013, Jim Willie revealed that China has been importing 1000 tonnes PER MONTH for over a year. At that time, the Chines have at least 15,000 tonnes in hand. Interview was with Turd Ferguson. FF to the 11-minute mark:

http://www.tfmetalsreport.com/podcast/5349/jackass-roasting-open-fire

-- direct link to this MP3 file --

http://media.tfmetalsreport.com/audio/XmasJackass.mp3

 

Tue, 04/22/2014 - 06:55 | 4681972 josephlau
josephlau's picture

Most gold that was imported thru HK is back of financial deal like copper, soybean,etc...

Tue, 04/22/2014 - 06:58 | 4681977 josephlau
josephlau's picture

Actual number should deduct those "re-exported"

Tue, 04/22/2014 - 11:15 | 4682576 escapeefromOZ
escapeefromOZ's picture

If some of you think that gold i a barbarous relic , please explain why the first thing that happened in the Ukraine after the coup is that Yats the Yid stole the Ukraine gold and sent it to the USA .  The immediate value of the Ukraine gold in the Reserve Bank hands is to sell it short so propping the Comex and the illusion of a strong dollar . Could if be that gold has a role to play as a keeper of stability and value in a future monetray system ? 

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