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Spot The Gold One Out

Tyler Durden's picture




 

It is no secret that even as the price of Russia's primary export, oil, has been sliding in what is now a confirmed attempt by the West and Saudis to crush its grip over Syria, and in the process make Gazprom irrelevant as a critical supplier of gas to Europe, Russia has not wavered in its determination to slowly (at first) but surely diversify its dollar assets into the one currency western central banks hate the most: gold.

 

Just how much gold does Russia hold relative to all other key gold-holding central banks? The chart below, based on data courtesy of Santiago Capital which shows the total percentage of the monetary base backed by gold reserve and gives the answer in quite a rather fashion.

And while Russia's relative gold holdings, relative to its fiat exposure, are truly impressive, the real question we, and anyone esle should have about the chart above, is where does the red question mark representing China's gold as a % of its monetary base, currently lie. Yes, we know what China's gold was in early 2009 when the PBOC gave its last official update to the IMF, but to assume this has not changed in 6 years is ludicrous, especially since as Zero Hedge first showed back in 2011, citing a Wikileaked report of what China's Foreign Exchanges Administration reported on the topic of China's rising gold holdings. From the source:

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

 

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

So don't be surprised if and when China provides its next long overdue gold holdings report, if the Chinese dot is located above Russia's.

 

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Thu, 02/05/2015 - 14:50 | 5748377 power steering
power steering's picture

Putin is the golden beaver

Thu, 02/05/2015 - 14:58 | 5748402 ...out of space
...out of space's picture

this chart is fake about g8 

Thu, 02/05/2015 - 15:21 | 5748516 BlindMonkey
BlindMonkey's picture

What is the X axis?

 

 

edit:  NM, I just saw that it was a fairly even distribution in alphabetical order with the EU countries lumped together.  

Thu, 02/05/2015 - 15:42 | 5748627 mattgallis
mattgallis's picture

I thought it was the aggregate amount of gold?

Thu, 02/05/2015 - 15:51 | 5748668 kliguy38
kliguy38's picture

THEY MUST be stopped......

 

.heheheheheh.......go ahead and try and stop us........Your pal    Vlad

Thu, 02/05/2015 - 18:36 | 5749512 BaBaBouy
BaBaBouy's picture

Is Canada The Big Sissey In The GOLD Club ???

Thu, 02/05/2015 - 23:59 | 5750543 cynicalskeptic
cynicalskeptic's picture

Ironic given how much they produce......

how much of the gold perviously held by the West has been sold off at bargain basement prices to perpetuate the charade?   Paging Great Britain....

Thu, 02/05/2015 - 15:55 | 5748691 Paveway IV
Paveway IV's picture

This would make perfect sense for China...

which is why it will never, ever happen. China's oligarchs are - if nothing else - experienced and efficient thieves.

'State asset' is a transitory label for anything of value on it's way to corrupt politicians' overseas bank accounts. The incentive for using state money to buy state gold vs. stealing state money DOES NOT exist. I'm not suggesting they are outright stealing Chinese gold reserves, but insist there is very little left-over money to expand those gold reserves after Chinese oligarchs get their cut. That's what they do and they're damn good at it.

Thu, 02/05/2015 - 16:31 | 5748900 disabledvet
disabledvet's picture

I hate to agree with this but I think it absolutely 100 percent true.

 

EVERYBODY IS STEALING THE GOLD.

 

Still...at least the Russians offer a return on their "ruble."

 

That's still better than the rest of "Western Civilization" (sic).

 

For the rest of us its "dollar/yen."

 

Moneychangers...do they come any other way?

Thu, 02/05/2015 - 15:43 | 5748628 mvsjcl
mvsjcl's picture

Gold holdings? I wish I could trust what is being reported. I don't, regardless of who is reporting.

Thu, 02/05/2015 - 15:48 | 5748652 TheCanadianAustrian
TheCanadianAustrian's picture

So when China announces a gold backed currency, it will officially change its name to... Superchina?

Thu, 02/05/2015 - 16:58 | 5749056 Stoploss
Stoploss's picture

Really?  Wait til they figure out the Yuan and Ruble are already 100% gold backed.

Or, "Ace in the hole" will be the phrase of the century...

Thu, 02/05/2015 - 14:58 | 5748406 stateside
stateside's picture

I think this gal is the Polish golden beaver:

 

http://www.kitco.com/news/2015-02-04/She-Running-For-Poland-Presidential...

 

stateside

Thu, 02/05/2015 - 15:03 | 5748427 knukles
knukles's picture

Says the media is focusing more on her good looks than brains.
Damn good thing we focus on brains and get folks like Obungole and Kerry

Thu, 02/05/2015 - 15:09 | 5748464 SheepDog-One
SheepDog-One's picture

Wow, so according to the MSM women can definitely run for elected office just as long as they're not pretty? Gee that's nasty, cat claws out, MEOW!

Thu, 02/05/2015 - 15:19 | 5748513 power steering
power steering's picture

Vote for Paris

Thu, 02/05/2015 - 15:26 | 5748534 BlindMonkey
BlindMonkey's picture

So why didn't Hellen Thomas run?

Thu, 02/05/2015 - 15:24 | 5748529 RaceToTheBottom
RaceToTheBottom's picture

Hmmmm, cucumbers....

 

Thu, 02/05/2015 - 16:31 | 5748903 TeamDepends
TeamDepends's picture

Mine's bigger... Vegetables can be very sensual....

Thu, 02/05/2015 - 15:07 | 5748455 giovanni_f
giovanni_f's picture

She is really pretty, But it won't be enough to counterbalance Angela Merkel.

Thu, 02/05/2015 - 15:27 | 5748541 BlindMonkey
BlindMonkey's picture

You can never have enough links to Angela Merkel dancing in a bikini.

 

https://www.youtube.com/watch?v=b2yjhau66lM

Thu, 02/05/2015 - 16:27 | 5748876 knukles
knukles's picture

That's just wrong

Thu, 02/05/2015 - 15:20 | 5748520 gaoptimize
gaoptimize's picture

Is or has?  Is it a rumor, or are there pictures?

Thu, 02/05/2015 - 18:12 | 5749398 redwater
redwater's picture

Looks like the blonde from ABBA.

Thu, 02/05/2015 - 14:53 | 5748379 giovanni_f
giovanni_f's picture

I am surprised the UK has anything left for good. I thought Gordon Brown sold everything at the lowest possible price to GS.

Thu, 02/05/2015 - 14:55 | 5748394 hotrod
hotrod's picture

Good point  UK gold does not make sense.

Thu, 02/05/2015 - 15:14 | 5748493 viahj
viahj's picture

interested to see where the Vatican and the City of London fall on that chart.

Thu, 02/05/2015 - 16:12 | 5748788 Frank N. Beans
Frank N. Beans's picture

and India

Thu, 02/05/2015 - 19:36 | 5749724 Max UK
Max UK's picture

Plenty of gold in India, but in citizen hands. I'm not sure that the Indian state holds that much phys. Much of what the state has is probably unicorn gold with the Fed or the BIS.

Thu, 02/05/2015 - 14:51 | 5748382 Kolchak
Kolchak's picture

china should be well above that mark, hell they bought more in the last two years then the US has iin total, the non bull shit amount that is.

Thu, 02/05/2015 - 16:00 | 5748720 bIlluminati
bIlluminati's picture

Come on, I'm sure China has bought more than (gold - rehypothecated gold) = -2000 tons?

Thu, 02/05/2015 - 14:52 | 5748387 new game
new game's picture

crown the new king, plez will somebody make a black swan move to get this shit show moving along to it obvious ending...

Thu, 02/05/2015 - 14:54 | 5748390 hotrod
hotrod's picture

I Call, China

Thu, 02/05/2015 - 15:06 | 5748391 Mi Naem
Mi Naem's picture

Cramer-worth comedy headline at Kitco: 

When Commodities Find Bottom, Gold Will Shine Through – Triland Metals -

near the top of their front page

Article written by Sarah Benali who is easier to look at than Mr. Jim Crammer https://twitter.com/SdBenali

Thu, 02/05/2015 - 14:56 | 5748397 Philo Beddoe
Philo Beddoe's picture

Canada seems well positioned. 

Thu, 02/05/2015 - 15:07 | 5748453 I-am-not-one-of-them
I-am-not-one-of-them's picture

On purpose.  Canada is just a vassal state of the US, when vulnerable, gets reamed.

 

 

 

Thu, 02/05/2015 - 15:18 | 5748512 bania
bania's picture

We keep our gold in powder form, buried deep in the artic. It's safer that way you hoser.

Thu, 02/05/2015 - 17:23 | 5749180 zeropain
zeropain's picture

or did they sell to china for $'s

Thu, 02/05/2015 - 14:59 | 5748409 Kaiser Sousa
Kaiser Sousa's picture

obviously this is why the phony price of Gold and Silver have been going down lately..

lately as in 7 years....

DEATH TO THE MONEYCHANGERS.

and im still stacking mother fuckers.

Thu, 02/05/2015 - 14:59 | 5748411 delivered
delivered's picture

Germany, France, and Italy calculations are not correct as we know Germany has had difficulty getting its gold back. Maybe present this chart with actual gold in possession by each country and then we'll have a much clearer picture. Is this graph informative, yes but only represents part of the story. Let's see it with actual physical control holdings and go from there.

Thu, 02/05/2015 - 15:04 | 5748435 knukles
knukles's picture

Thank God mine was only rehypothecated 4 times.

Thu, 02/05/2015 - 14:59 | 5748413 lasvegaspersona
lasvegaspersona's picture

'the percentage of monetary base backed by gold reserves' is a concept of the gold (and gold exchange) standard, it is not relevant today.

The emerging concept is the ability of a Central Bank to defend it's currency in the Forex market. The ECB has set the stage. They have 10,800 tons (in total, all EMU countries) and it is marked to market. Should the dollar collapse they would have the gold to prevent their currency from following as the gold price (in dollar terms) would sky rocket as the dollar fell.

The Fed unfortunately has no physical gold of their own and cannot do the same. If the POG rises the Euro looks better and better while the dollar looks worse and worserer.

Thu, 02/05/2015 - 15:28 | 5748545 RaceToTheBottom
RaceToTheBottom's picture

But isn't the fact that the US FED has no gold a trivial one since the US FED and the US Government are both acting in the best interests of the Bankster elite?  

Could that not be solved with the swipe of a pen?  

The real issue is how much of the US Gold is unencumbered?

 

 

Thu, 02/05/2015 - 16:59 | 5749065 lasvegaspersona
lasvegaspersona's picture

RTTB

at present you are correct, gold is not relevant unless a country sells it and uses it to buy their own currency.

We are, I believe, about to change the way the currency system functions. We will have to have a new dollar for the USA to have a currency that functions in such a syste.

If/when these things hapen gold will become much more important. For now it is just another asset on a CB's balance sheet.

Fri, 02/06/2015 - 00:09 | 5750568 cynicalskeptic
cynicalskeptic's picture

The real issue is how much of the US Gold is unencumbered?

A more basic question is how much of it is REALLY gold (and not tungsten cored placeholders)?   That could be the biggest fraud of all time... the gold is gone and the rehypothecated stuff isn't real......  

 

Thu, 02/05/2015 - 17:27 | 5749194 zeropain
zeropain's picture

which is more powerful gold or a missle?

Thu, 02/05/2015 - 19:02 | 5749615 lordylord
lordylord's picture

"which is more powerful gold or a missle?"

Solid gold missles or How I Learned to Stop Worrying and Love the Bomb. 

Thu, 02/05/2015 - 15:00 | 5748418 Callz d Ballz
Callz d Ballz's picture

China using it's CB powers to gain physical while the others are still trying to keep unicorns flying.

Thu, 02/05/2015 - 15:02 | 5748426 _ConanTheLibert...
Thu, 02/05/2015 - 15:45 | 5748643 Zero_Head
Zero_Head's picture

That song was about Lindsay Buckingham making a mint recording music in a nearby studio......

Thu, 02/05/2015 - 15:03 | 5748428 Seb
Seb's picture

This chart is pointless. The Y axis should be some unit of mass (t, kg or troy ounces), not dollars.

Thu, 02/05/2015 - 15:03 | 5748433 Osmium
Osmium's picture

"So don't be very surprised if and when China provides its next long overdue gold holdings report if the Chinese dot is located not only to the right of Russia but also above it."

 

Why would China's dot move to the right?  What is the scale from left to right?  Looks like alphabetical order to me.  Is China going to change the name of it's country when it announces is latest gold holdings?

Thu, 02/05/2015 - 15:09 | 5748466 halfasleep
halfasleep's picture

+1 lulz, maybe china is going to marry russia, and become chrussia or rhina.

Thu, 02/05/2015 - 16:03 | 5748728 American Liberal
American Liberal's picture

x-Axis (left to right) is logically total tonnage. But a strong fear of both logic and mathematics seems to be the basis for our Common Core education.

Thu, 02/05/2015 - 15:47 | 5748649 Urban Roman
Urban Roman's picture

They're going to move down the alphabet.

It'll start with 'X' like the Xinhua news agency...

Thu, 02/05/2015 - 15:05 | 5748444 q99x2
q99x2's picture

NWO is broke bitchez

Thu, 02/05/2015 - 15:06 | 5748446 Consuelo
Consuelo's picture

The Chinese will not make a 'move' until it is near certain that they will benefit (Greatly) from it.   The 'benefits' being on many levels across multiple geopolitical platforms.    Do things quietly and maintain 'harmony'...

Thu, 02/05/2015 - 15:07 | 5748454 Joebloinvestor
Joebloinvestor's picture

One of the last gasps of the US will be the amount of gold held doesn't matter, it is who do you trust?

Thu, 02/05/2015 - 16:25 | 5748866 GoldenGeezer
GoldenGeezer's picture

That's kind of a tough question to answer (honestly) with a gun to your head.

Thu, 02/05/2015 - 15:09 | 5748468 Confundido
Confundido's picture

Gold is the money of free peoples. Neither China nor Russia are free societies. Don't take me wrong, today, there are no free societies anywhere in this world, but since the point being made here is about Russia, I bring the attention to Russia. As long as that country is ruled by a tyrant and he needs to fund the military, any hopes of establishing gold backed money AND 100% fractional reserve banking is just that: Hope!

Thu, 02/05/2015 - 15:31 | 5748564 Mike Honcho
Mike Honcho's picture

Say huh?

Thu, 02/05/2015 - 15:57 | 5748706 noben
noben's picture

Hey, Confusedido, your premise is wrong.

GOLD IS MONEY. (Repeat a bunch of times till it sinks in). Political freedom has nothing to do with it.

Hope this gives you some clarity.

Thu, 02/05/2015 - 16:30 | 5748893 Volkodav
Volkodav's picture

better worry about your own country

Thu, 02/05/2015 - 15:11 | 5748477 Balvan
Balvan's picture

Who cares about gold, it's non productive asset, sitting in a safe doing nothing. We're no longer on the gold standard, get over it.

 

 

Thu, 02/05/2015 - 15:48 | 5748654 Zero_Head
Zero_Head's picture

Only people with functioning braincells care about gold, which explains your post.

Thu, 02/05/2015 - 16:28 | 5748878 GoldenGeezer
GoldenGeezer's picture

At least it isn't being charged negative interest rates sitting in your account at the bank.

Thu, 02/05/2015 - 16:41 | 5748968 Vooter
Vooter's picture

You'd better hurry up and sell yours, then! Oh, wait, I forgot--you don't have any...

Thu, 02/05/2015 - 15:13 | 5748492 stateside
stateside's picture

Bloomberg now a conspiracy theorist?

 

http://www.bloomberg.com/news/features/2015-02-05/germany-s-gold-repatri...

 

stateside

Thu, 02/05/2015 - 15:15 | 5748497 Börjesson
Börjesson's picture

Whoever came up with this chart doesn't have a clue. If and when we reach a (crisis) stage where gold holdings become relevant, percentage of monetary base will be irrelevant. All that will matter is tonnes of gold in possession. For comparison across countries, per capita might be useful. Per unit of base money - not so much.

Thu, 02/05/2015 - 15:15 | 5748498 Quinvarius
Quinvarius's picture

Except the US monetary base is way bigger than people think.  You can't confine the measurement to money within the US banking system, as the M series does.

Thu, 02/05/2015 - 15:28 | 5748543 nink
nink's picture

Glad to be a Canadian about now and not have to worry about all of these Gold issues ummm OH CRAP 

 

 

Thu, 02/05/2015 - 15:50 | 5748664 In.Sip.ient
In.Sip.ient's picture

Indeed.  With mega tonnes in the ground instead

of in a vault, Canada is virtually "untouchable"...

;)

Thu, 02/05/2015 - 15:29 | 5748551 Mike Honcho
Mike Honcho's picture

Gold is just a paper weight.  We needed room to store reams of paper for our hyperinflation, so we took the gold out with the trash. - Ukraine

Thu, 02/05/2015 - 15:30 | 5748557 quasimodo
quasimodo's picture

I think our 1st grader could have made a chart easier to decipher than this particular one.

Thu, 02/05/2015 - 15:39 | 5748611 Bagbalm
Bagbalm's picture

But if the price of gold was allowed to shoot up wouldn't it be too expensive for them to trade their dollars for it?

Also - gold sitting unchanged beats Euros held at a negative interest rate.

Thu, 02/05/2015 - 16:25 | 5748865 Pullmyfinger
Pullmyfinger's picture

Agreed on both counts; but that's why every other country in the world has been playing along with the price suppression of precious metals. While the US and London has been doing their best to maintain the value of their currencies with respect to gold by continually shorting the derivatives markets, this has ironically created a firesale for the rest of the world, who have been intensely engaged in stocking up as quickly as possible without driving up the price, before the inevitable collapse and conflagration of unbacked, debt-laden fiat currencies.

Thu, 02/05/2015 - 15:57 | 5748703 Madcow
Madcow's picture

Meh.  Obama can simply issue an executive order forcing those countries to stop thinking of money as gold. 

Thu, 02/05/2015 - 16:14 | 5748792 Pullmyfinger
Pullmyfinger's picture

Didn't the BRICS nations get that memo in 2008?

Thu, 02/05/2015 - 15:58 | 5748710 Q-Q-Q
Q-Q-Q's picture

Didn't the Bank of England put out a statement a few years back that some of it's gold remaining may not be of London good delivery standard. Of course some may be 99%. Sounded like an arse covering statement to me.

In my opinion even the custodial holding have gone from the BOE, probably in the hours following the queens pr visit.

Thu, 02/05/2015 - 16:14 | 5748796 matagorda
matagorda's picture

Perhaps adding the "monetary base" changes the calculation, but the Wikipedia chart of gold reserves and as % of forex reserves (as of 1/15 and per World Gold Council) shows a vastly different result.  See http://en.wikipedia.org/wiki/Gold_reserve. 

Thu, 02/05/2015 - 16:15 | 5748805 pcrs
pcrs's picture

With too big to fail you can't ignore the credit being built on top of monetary base. People treat it as money. It is like saying you have this whole inverted pyramid and you say the tip is 15% of the next layer of stones. That does not seem dramatic untill you realize the money equivalents stacked on top.

Thu, 02/05/2015 - 16:49 | 5748937 Pullmyfinger
Pullmyfinger's picture

As of Sept. 2014, the central banks of Europe collectively claimed ownership of 30,500 metric tonnes of gold. I believe there are many here who will understand the implications of that in the face of a currency collapse of either the euro OR the dollar...

google: "The Fourth Central Bank Gold Agreement"

Thu, 02/05/2015 - 16:46 | 5748954 noben
noben's picture

When the BRIICS have their BRIICS Bank fully operational, one of its members will act as the Golden Swan trigger event, that will knock the USD off its Reserve throne.

Just as the EU has a pool of gold (to back the EU), so too do the BRIICS & Friends (Turkey, Argentina, Venezuela...).

And just a a corporate Earnings Statement has a number of key ratios to look at, so too does a country's Balance Sheet and Gold holdings. Its gold holdings are important in terms of Total Tonnage, relative to its GDP and its Money Supply.

Its Per Capita gold holdings are a subset of the Gold/GDP ratio, as speaks to the wealth distribution in the country, i.e. the average wealth. It might be a useful socio-political indicator, but has little or nothing to do with a country's gold backing its currency.

The Gold-to-GDP ratio is more telling than to its Money Supply-to-Gold: the former is a Quick Ratio indicator of their wealth held in Gold. The latter ratio is an indicator of how far out of whack its fiat/paper obligations are, relative to hard reality (call it the 'Squid-Index').

Fri, 02/06/2015 - 14:54 | 5749437 MDP
MDP's picture

Just thinking out loud here, but what happens to gold if currencies do collapse and it's value skyrockets? There is obviously still gold in the ground and if it's worth enough, more will be extracted. For example, there are countless tons of gold in situ on federal lands in AK. If it got to the point where we needed it, we could always just go get it.......?..........

Thu, 02/05/2015 - 18:37 | 5749520 explosivo
explosivo's picture

The bear is strong. 

Thu, 02/05/2015 - 19:55 | 5749796 theliberalliberal
theliberalliberal's picture

can someone tell me how a graph of gold reserves priced in $ in meaningfull due to exchange rates (ruble vs $$ and $$ vs gold price).

just plot the # of oz. in the bank.  I doubt that is increasing/decreasing up and down.  (just up in the case of russia)

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