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When Will China Disclose Its True Official Gold Reserves And How Much Is It?
Submitted by Koos Jansen of Bullion Star
When Will China Disclose Its True Official Gold Reserves And How Much Is It?
Things are heating up in the Chinese gold market
First let’s go through the latest Shanghai Gold Exchange data and then we’ll continue to discuss the most recent developments regarding Chinese official gold reserves.
Friday the Shanghai Gold Exchange (SGE) released its trade report of week 11, 2015 (March 16 – 20). Withdrawals from the vaults, which equal Chinese wholesale demand, accounted for 53 tonnes, up 3.91 % from the prior week.
Blue is weekly gold withdrawn from the vaults in Kg, green is the total YTD.
Year to date total withdrawals have reached a staggering 561 tonnes, up 7.3 % from 2014, up 33 % from 2013. When using the basic equation for the Chinese gold market to estimate import, we learn that up until March 20 China has net imported 412 tonnes. Add to this India has net imported about 230 tonnes over the same period, that’s 642 tonnes combined. I wonder how long the Chinese can keep up this pace of importing before physical supply from Western vaults runs dry.
Trading volume on the Shanghai International Gold Exchange (SGEI) has been 32 tonnes in week 11, which could have distort SGE withdrawals by 0.8 tonnes. (Read SGE Withdrawals In Perspective for more information on the relation between SGEI trading volume and SGE withdrawals)
When Will China Disclose Its True Official Gold Reserves And How Much Is It?
As most readers who are interested in gold will know, China’s official gold reserves are small in proportion to the size of their economy and their foreign exchange reserves. This disproportionate position has been difficult for China to escape from. Any slight move from their immense stock of US dollars into gold could disrupt the gold market, and thus the US dollar, spoiling the party for everybody.
China is forced to buy in secret. The latest update on the size of their official gold pile was in April 2009, when they disclosed to have 1,054 tonnes, up 454 tonnes from 600 tonnes, which they claimed to have since 2003. Common sense indicates the PBOC did not buy 454 tonnes in a few months; most likely they bought this amount in secret spread over six years (2003 – 2009). More common sense suggests they continued to buy in secret since 2009 and they hold at least twice the weight they currently claim.
Last week I reported it’s very likely the renminbi will be adopted into the SDR basket this year and before inclusion China will announce their true gold reserves. All arrows point in the same direction, IMF chief Lagarde stated:
China’s yuan [renminbi] at some point would be incorporated in the International Monetary Fund’s Special Drawing Right (SDR) currency basket, IMF Managing Director Christine Lagarde said, …”It’s not a question of if, it’s a question of when,”
The SDR basket is reconsidered every five years, in 2010 there was no adjustment made, as the renminbi was not considered eligible at the time. But the renminbi has made significant developments since then; this year will be appropriate for adoption.
Next to what Lagarde and the IMF have stated, more “official” channels are hinting at changes to come regarding China in the international monetary system. Roland Wang, China managing director at World Gold Council, told Reuters on March 26:
China currently holds about 1.6 percent of its foreign exchange reserves in gold, which is relatively low compared with developed countries and some developing countries, WGC China managing director Roland Wang said.
“The ideal amount should be at least 5 percent of its total forex reserves,” Wang told Reuters in an interview in Hong Kong.
The latest IMF data points out China’s total foreign exchange reserves, excluding gold, on December 1, 2014, were valued at 3.859 trillion US dollars. 1,054 tonnes at the price of gold on December 1, 2014 (37,600 US dollar for 1 Kg), was a little over 1 % of total reserves.
If China would announce on Monday they hold 5 % of total reserves in gold, this would translate into roughly 5,000 tonnes.
Remarkably, the exact same day Reuters published Wang’s statement, Chinese newswire Caixin published a detailed story on gold in China’s monetary history and its potential function in the present and future economy, written by Hedge Fund manager Li Sheng:
Gold accounts for only 1.6 percent of China’s forex reserves. This is only a fraction of the figure in the United States and many other developed countries. If China ever increased the level to 5 percent, it would have an enormous impact on global demand for gold.
Li mentions the exact same numbers as Wang from the World Gold Council: 1.6 % and 5 % of total reserves. Coincidence?
I think that if China will update us on their gold reserves, the total will be less than 5,000 tonnes. For clarity, I have little hard evidence on the amount of gold the PBOC or its proxies hold in reserve. However, the reason I think it will be less is because of what Song Xin, Party Secretary and President of the China Gold Association, wrote at Sina Finance on July 30, 2014:
Gold Will Support Renminbi As It Moves To Join World
…For China, the strategic mission of gold lies in the support of RMB internationalization, and so let China become a world economic power and make sure that the “China Dream” is realized.
…Though China is already the world’s second largest economy, there is still a long way to go to become an economic powerhouse. The most critical part to this is that we don’t have enough say in matters such as international finance and matters regarding the monetary system, the most obvious of which is the fact that the RMB hasn’t fully internationalized.
Gold is a monetary asset that transcends national sovereignty, is very powerful to settle obligations when everything else fails, hence it’s exactly the basis of a currency moving up in the international arena. When the British Pound and the USD became international currencies, their gold reserve as a share of total world gold reserves was 50% and 60% respectively; when the Euro was introduced, the combined gold reserves of the member countries was more than 10,000 tonnes, more than the US had. If the RMB wants to achieve international status, it must have popular acceptance and a stable value. To this end, other than having assurance from the issuing nation, it is very important to have enough gold as the foundation, raising the ‘gold content’ of the RMB. Therefore, to China, the meaning and mission of gold is to support the RMB to become an internationally accepted currency and make China an economic powerhouse.
That is why, in order for gold to fulfill its destined mission, we must raise our gold holdings a great deal, and do so with a solid plan. Step one should take us to the 4,000 tonnes mark, more than Germany and become number two in the world, next, we should increase step by step towards 8,500 tonnes, more than the US.
According to Song step one is to reach the 4,000 tonnes mark to surpass Germany and become the second largest holder in the world, which would be in line with being the second largest economy (in terms of GDP). We can also read China’s aspirations in international finance that is currently, among other deveopments, to be established through the inclusion in the SDR basket. Bear in mind, Song is a Party Secretary, he wrote his article with permission, or on behalf of the Communist Party of China (CPC).
Song’s statements makes me think if China will increase its official gold reserves it will be more than Germany’s reserves; something north of 3,384 tonnes. Of course I could be wrong and it will be less – perhaps because they have less, perhaps because the international monetary system “can’t handle” and increase of more than 100%, perhaps because China has more than they see fit to disclose on the grand chessboard.
To finish please read the last bit of the article from Caixin, a must read and it has similarities with Song’s article:
Yuan and Gold: Old Enemies Should Finally Become Friends
…Since the global financial crisis that started in 2008, there has been consensus that an excessive issuance of U.S. dollars, driven by the U.S. Federal Reserve’s need to protect the U.S. economy, was partially to blame for causing havoc. Since the Bretton Woods system collapsed in 1971, the United States has been freed from having to restrict its money supply to the size of the gold reserve its central bank holds.
What does that say about the attitude China should take toward gold?
The boom years for gold between 2008 and 2012 were, of course, driven to a large extent by the United States’ easy monetary policy and an economic recovery in many countries. Yet, China played a part in it as well.
Its push since 2010 to promote the use of the yuan globally and diversify its foreign exchange investment away from U.S. Treasury bonds and U.S. dollar-denominated assets has made investors expect the demand for gold to rise because the Chinese central bank will need a greater reserve to support its currency.
Gold accounts for only 1.6 percent of China’s forex reserves. This is only a fraction of the figure in the United States and many other developed countries. If China ever increased the level to 5 percent, it would have an enormous impact on global demand for gold.
The price of gold started plummeting in early 2013 as the U.S. economy became stronger and the market expected the Federal Reserve to stop its policy of so-called quantitative easing. Meanwhile, China’s demand for gold soared. In the first half of 2014, imports skyrocketed, prompting speculation that the central bank was secretly beefing up its gold reserve.
Buying more gold seems to be a good choice for both the government and individual investors, given the new domestic and international circumstances. The yuan has been relatively stable throughout the most troubled times of the financial crisis, but its peg to the U.S. dollar means it will always fluctuate in sync with the latter, depending on the Fed’s moves.
That is why it is extremely important that we have an “anchor” ourselves.
Gold is a currency that supersedes sovereignty issues, is politically neutral, and is not easily manipulated by monetary policy. Gold may not be able to compete with the currencies of the world’s major powers, but it can certainly be used as an anchor.
In the past year or two, enormous changes have occurred to the structure of China’s economic growth, to the degree of social wealth accumulation, and to the investment and wealth management habits of ordinary people. It is important and urgent that we revisit certain issues, including the relationship between the yuan and gold, under these new circumstances.
The party came to power not only because it won the war but also, and more importantly, because it represented the right thing to do economically and financially. The relative advantages of its monetary system back then have been fully demonstrated, but it will not be long before they turn into obstacles to progress if the authorities reject reform and refuse to evolve along changing times.
The emphasis on material goods over gold and silver in the yuan system may have been superior in wartime and when supplies were insufficient, but it has increasingly become incompatible with today’s needs.
If it was necessary to use all means necessary to secure enough supplies of goods in the old days, today’s priority should be how to fairly distribute them. The emphasis should be on developing a fair market and protecting the ownership of private assets.
In a 1966 essay, former Fed chairman Alan Greenspan wrote that gold is “a protector of property rights.” This is true, but only in times of peace and in an open environment. The old wisdom of hoarding gold in troubled times is applicable only to eras of strife and war. In China in the 1960s, in Nazi-controlled Europe and in the Soviet Union under Stalin, gold could not buy one food, let alone protect property.
So instead of trying to peg the yuan somehow to gold to increase its credibility internationally, the government might as well work to establish rule of law and create a system where private property ownership is respected and the public believes in the strength of the monetary system. Confidence is more important than gold.
But that does not mean the yuan system does not need gold. It can be an anchor that stabilizes the yuan and increases people’s confidence in it. It can also serve as a check to the power of any one major currency.
Increasing private savings and investments of gold, or – as the Chinese government likes to call it – “storing gold with the people,” is not only about the diversification of investment channels. It is also an inevitable path that the yuan must take from being a currency supported by reserves of material goods to one based more on credit.
The government should be pleased to see this trend gaining momentum. Increasing its gold reserves at the same time can also strengthen the public’s confidence in the yuan and promote its use globally.
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owning Gold is Silly!
Tell that to Janet.
Just as soon as they've extracted the last ton that the West will give them.........then lights out to the hegemony of the West.
I highly doubt they will ever reveal their total holdings.
It givith temptation...
It also leaves little wiggle room.
Need any more proof of a bullshit 'market'
In any real market you couldn't buy that much in secret and wouldn't need 'wiggle room'
.
.
X = China's Gold Reserves in Ounces
Y = Fort Knox Gold in Ounces
Z = A Natural Number
X = Z
Y < Z
X > Y
Armed guards @ Fort Knox > Y
Y / Y <1
X / Y = Zero Division Error
You need to re-work your math pal.
China is gathering gold like France in our history with Gold, except back then we were authentic enough to admit that the French were getting our gold.
Now we lie with silence.
It explains why the feds were buying all the ammo they could get their hands on. Once the cat's out of the bag, they won't be able to buy a toy gun.
"The West" might be nearing it's end .. but "The Tribe" will still be in power long after "The West" goes under the horizion.
"owning Gold is Silly!"
You are saying that owning gold is the name brand "Silly?"
de, are you any relation to MDB?
What's silly is trying to second guess China.
You will know how much gold they have when they decide to tell you. And then you still may not know for sure...kind of like the way it is with the US.
ETA: And that AIIB bank will go a long way toward internationalizing the Yuan. Why would China want to continue to participate in the IMF when the US still controls it. If the AIIB grows, China - and other BRICS - might simply withdraw from the IMF and World Bank.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.jobs-review.com
if yer aunt had balls she'd be yer uncle
china will never report the number that everyone here wishes they would... because they don't have it... you think they do, you wish they do, you hope they do, but they don't
That's pronounced "seery".
Not as silly as holding a fiat currency like the US dollar.
8,500 tonnes worth of I.O.U. receipts...
Front face "I.O.U" .. back side "Nothing!"
Look here guys, we own 2.73 Million Comex long contracts, fully paid for...
How are you going to check. No one believes Americas gold reserve so why be ready to believe China.
Au..dit?
The FED is left Ag..hast by your suggestion.
It will take the ability to redeem large amounts of Chinese currency in actual gold over a long period of time without a closed-window panic.
If they can pull it off - and I don't see why they couldn't - their currency will be dominant for generations.
Did you not say the Fed's gold reserves had to be audited?
No?
Aha.
When Will US Disclose Its True Official Gold Reserves And How Much Is It?China soon, the US will be forced to buy 8500 tons of gold painted tungsten .
Yeah. And that's gonna go over like a tungsten balloon.
(I don't really know what that means. ;> )
That is one reason they have all their gold resmelted before they take delivery (not that they don't trust the sellers its just to change it from oz to kg bars, Yeah right).
A very good little earner for Switzerland.
China to the US, "We are going to show you ours, can you show us yours?" (And we don't mean your Tungsten, or your ass!.)
When? When it will be TOO LATE for US criminal cronies to realize it and change anything about it.
Here is the fact: China had expanded its monetary base more than 60 times between 1978 and 2008. And it doubled that in 2009 alone. Get the idea?
<--- I'm a JEW ~ I <3 gold
<--- I'm a JEW ~ I <3 FIAT joobux
Vote now jews... Let's see what you're all about...
Pathetic...
Why? ~ I beg you to indulge me with your NON~SYCHOPHANT wisdom... Here's your chance to shine...
Show EVERYONE what you're all about! [besides simply UPVOTING yourself & running 4 cover under the nearest rock]...
Still waiting... ONE HOUR LATER... [So far ~ it appears that the JEWS <above> prefer GOLD to JOOBUX ~ Which I applaud them for]
Which brings up the logical next question...
Why the fuck are we indulging in a JOOBUCK counterfeitting system?
Someone as smart as yourself ought to be able to provide the answer to that...
Jezus, do they have internet in white trash tralier parks as well now?
I think China already is already very close to 8500 tons. China should have announced last year if they kept the same periodic cycle, but they did not. Methinks they did not because they have very high tonnage and it would have shocked the gold markets making it much harder for them to get more cheap gold. Gold is money. Money is power. China gets it.
I'm fine with that. At least for a little while longer I can keep taking advantage of these gold prices to start stacking again after these tragic boating accidents I seem to keep having.
Id venture to guess that China already has more gold than the USA.
Probably a lot more....by thousands of tons.
Gold + second strike nuclear capability = ideal currency backing.
I'd add "stable government" but I'm not sure that ANY government is truly stable in the early Internet Era.
Now where could an enterprising, rising Asian power get a second-strike capacity quickly?
Why, an alliance! But with who?
What country could they ally with that has noo-clear subs and swell MIRVS upgraded to defeat ABMs?
Hmmmmmm....
I thought this was going to be a good article, then was disappointed. China already has way more the the US, partly because the US has way less than it is given official credit for. It has bared its cupboard trying to hold down the price of gold.
And what is this baloney about China weakening itself by going in with the SDR? Go it alone, like the US has been, and have to answer to no one.
And what is in US hands may well be dancing the rehypothecation rumba.
Yeah, typical. One reads the title and thinks "hmm, looks interesting," but after reading you know just as much as before reading it.
So Koos, ouwe pikkestein, tell us: WHEN will China disclose it's gold holdings, and how much WILL it be then?
p.s. even IF the Chinese announce anything regarding gold, I would take it with a HUGE pinch of salt, just like those miraculous '7% economic growth' numbers that they've been reporting for years on end.
-Probably when the US does: never
The answer is pretty simple. Not yet.
China is under very little pressure to show its hand. The economy may be slowing down, but at least they're still growing. While they're still growing, they can still off load their US treasuries while there is still demand for them (God knows who is buying them) and use that money to buy gold and silver at knocked down prices.
Until then, why set off your nuclear arsenal? Hold fire, until the tide goes out, let those with no "modesty protection" be embarassed in front of the world and then they can show off their shiny new gold an silver swimming trunks...
you had me at "not yet"
Rots & rots ...
They'll admit their true reserves when they can't extract anymore from stupid round-eyes.
You've got to hand it to the Chinese - their contempt for Western "leadership" is pretty well justified.
China will announce their official gold reserves on the same day that they announce the new international yuan, backed by and redeemable for .9999 fine gold from the Bank of China.
I wouldn't be surprised if they put it on public display and made a big deal out of it.
Until China announces that it will let the Yuan float on the international currency markets,all talk about China's Gold etc is just noise.
Remember China is a one party country inwhich the Party controls everything.If you think that China will relingush control of the Yuan to the international markets,I have some Shale oil investments for sale ....
I can't buy any hay with an SDR but a truckload of paper SDRs might be good for bedding.
As I've said before, guaranteed 5,000 tons right now as we speak, and likely upwards of 10,000 tons depending on when they announce. Even up to 15,000 tons would not shock me, although that is probably on the high side atm, although you can be sure they are heading in that direction eventually.
I didn't even scan the article till just now after I posted above, funny it says 5K tons also. I say guaranteed because you don't even need those fancy charts, you can just do a back of the envelope estimate of thier annual mine production (none of which they export) since 2009 + what is going through Hong Kong to clearly see they have at least 5,000 tons. That's not even including any recycling whatsoever.
Hahaha goyim! Our kosher controlled mass media does this every Sunday. We put out twisted kosher logic about gold. Get you to BUY! BUY! BUY! Gold was good in olden times. We wrote out fake receipts for gold that didn’t exist and used as ‘money’. Stupid goyim. We don’t need gold to do that anymore. We now have phony money called ‘CREDIT’. Our kosher money power will give you all CREDIT you want to buy gold. Or buy anything you want! Putting goyim into DEBT is our power today. We enslave you with debt. Buy all the gold you want with our CREDIT money. The value of gold is only what our kosher money power says it is. When we deflate the medium of exchange by pulling it out of circulation, your gold will be worth nothing! Oy vey!!
So, Rabbi Blitzkrieg, slide some of that credit money across the table so I can buy some of that worthless gold stuff you no longer need or want. I'll be happy to make payments and give you a balloon good for one week after Shtf Day.
Thx
Silly shiksa. We give you all credit you want, collateralized by you. Hahaha. Go buy anything you want that tickles your fancy. We make you wait for SHTF Day like waiting for a train don’t come. Kosher controllers have been rolling out SHTF for long time very incrementally. Is process, not event. We have you like frog in the pot. Heh heh.
But don't hurry with deflation. Once credit is out of circulation making the people poor, riots and protests can widely spread on all fronts. Even when goyim are indeed stupid this situation could easily lead to realizing the trivial fact that credit (and debt) created out of thin air can equally well be wiped out back to thin air along with the bankers who issued it. And when the dust settles and kosher money loses the last traces od relevance, gold will remain the only thing upon which a new money system will be created.
Shalom, Rabbi.
Honest money system must be in hands of people’s honest government. If stays in hands of kosher private money powers, i.e., federal reserve, IMF, BIS, etc., it won’t matter what system is based on. Can be gold, sea shells, silver, tally sticks, whatever. If creation and emission of medium of exchange stays in private hands, nothing will change. Guess who has all the gold anyway? Most in hands of kosher tribe. Oy vey! The only system that will work will be like Reichsmark based on units of labor. It took Germany out of depression while rest of world under kosher system wallowed in misery. International kosher tribe had to declare war on Germany in 1933. Couldn’t allow the rest of world see how corrupt kosher usury system really was.
"The only system that will work will be like Reichsmark based on units of labor"
And we know what happened to the people who implemented that. As Churchill said in 1935 'Mr. Hitler has signed his own death warrant by taking on the central bankers" At about the same time the newspaper headline 'Judea Declares War On Germany' appeared.
Churchill’s mother – Jenny Jacobson aka Jenny Jerome – was a jew which makes Winston a jew. He knew central bankers were jews and used shabez goy front men as proxies. Hitler had to be crushed and vilified forever so international jewdom controlled usury money power could continue forward with Protocols and world domination. Kosher controlled mass media and education fills heads of goyim with lies. Goyim are cattle led by ring in nose. OY OY OY!
It has been sugested that some scientists in the UK have found a way of producing gold from used nuclear material. (I'm not sure if it was surplus warheads or fuel)
As a theory it would explain Gordon Browns sell-off of the UK gold reserves at a bargain price, a few years back, and the current pricing and availability.
Boy, if that one turns out to have any legs will some people have egg fried rice on their faces.. For now though, just an unsubstantiated rumour.
Remember that Outer Limits episode where a gang stole a ton of gold and then put themselves into suspended animation for a hundred years?
Remember what happened when they woke up?
Twilight Zone
Twilight Zone
http://en.wikipedia.org/wiki/The_Rip_Van_Winkle_Caper
.
If the lizard-men of planet Nimbrau haven't figured out how to synthetically produce gold, I simcerely doubt the Brits have.
Yea, might be true, only problem is it will be radioactive for 10,000 years.
Gold produced by such processes has the unfortunate downside of being radioactive.
It will all boil down to China letting the assayers and accountants inspec their gold stash which will then beg the question: "Well US, how much gold do you really have? If so, let us see it."
Classic call in poker.
LMAO, US has no gold, if they did, they wouldn't be smaking down the price constantly all day and night
There is no reason for China to disclose anything until they are pressured into a foreign policy situation that demands the sort of 'nuclear option' that revealing their gold holdings presents. I wager this exact scenario has already been 'war-gamed' 15 different ways 'til Sunday by our central planners, so who knows what is going to happen...
<••• Collins Cobuild English Dictionary •••>
its
You use its to indicate that something belongs or relates to a thing, place, or animal that has just been mentioned or whose identity is known. You can use its to indicate that something belongs or relates to a child or baby.
The British Labor Party concludes its annual conference today in Brighton.
...Japan, with its extreme housing shortage...
DET
Its is a third person singular possessive determiner.
~//~
It's the people of China gold?
Its "China’s" gold?
its - for belonging
It's - for it is.
I've been saying for almost 2 years now that China would not use it mounting Au reserves to back its currency, but merely use it as a hedge against the Fed and Wall St from attacking China's currency, and to force its way to a seat at the SDR table.
Unlike so many Au lovers here, I had/have NO illusions/delusions about China coming to the Libertarians' rescue. We're on our own, and...
China does what it has always done for thousands of years: look after its OWN interests. Which is why I am not part of their cheering section. After all, who in Asia is cheering for you or for Libertarians?
Hence, I'd hold no more than 10% of total Assets or a well-diversified portfolio in Au bullion (kept at home, and not talked about).
It's an absolute farce that the GBP is part of the SDR, and the RUB is not.
Clearly this is not based on inherent merit, but on Tradition and political pull of the UK's (London's) fiat banking prowess, and not because of its economic or resource prowess.
If the SDR basket gets adjusted every 5 years, and is to happen again in 2015, then it is really obvious that China will be IN and Russia will be OUT, unless Russia can pull a magic fiat rabbit out of its hat.
I'm not sure I understand this fascination with official gold reserves. The fact that any national government holds gold does not mean that any of their citizens will ever see a penny of it, nor does it mean that some country is suddenly going to go on the gold standard and watch all their money go whooshing out the door as international customers drain them dry. Everybody is in or nobody is in, nothing else will work.
More to the point, the opacity of sales in Shanghai is just as easily explained as happening as a method of backdoor capital flight from China. Lots of people doing a lot of funny business to get their assets out of Dragonville. Foreign real estate. Massive phony import/export invoicing. It only makes sense that a domestic demand for gold would fit into that equation as well. No doubt the government of China is buying some of this, but my guess is that the large majority of sales are to private persons. Just like India.
When will the USA disclose their honest amount of real gold in THEIR possession?? Or is it air au.... My bet is we, the US citizens and taxpayers, will be hugely disappointed....
That's right China, keep the nosE suckers guessing!
ain't nobody's business anyway!...it's a need to know!
Owning Au is a hedge against EVERY govt
Bearish for gold.
Fiat rules baby! Baby rules fiat! I feed fiat to my chickens and they lay golden eggs.
But you believe the government and their claims of holding gold?
Alisdair McLeod says China has upwards of 25,000 tonnes of gold...tracking known purchases and divestitures and speculating on their domestic mine output et cetera...he sounds pretty convincing.
When will gold (or silver) actually be worth anything worth mentioning, in actual, practical, "dollar" terms? Five years? 15 years? 20? 30? ?
US demographics say 5-10. The gov. will be forced to paper over baby boomer retirements, sinking the dollar.
When will fancily printed pieces of paper or digits on hard drives be actually worth something?
In a previous article this author Koos Jansen covered what the IMF criteria is for considering inclusion into the SDR basket.
One of the criteria is composition of reserves (and yes, that includes Gold holdings).
But hold on here, given that the US dollar is the primary component of the SDR, wouldn't that mean the US already has disclosed its gold holdings? And the IMF took the USs word at face value? Certainly I never heard anything about the IMF auditing Ft Knox.
What I am saying is that if the IMF takes China's word about how much Gold they have ..... then how the hell does that add credence to the SDR? Just a bunch of phony claims by lying countries claiming they are in better shape than they actually are. Wasn't this the exact same thing that Greece did when it lied to the EU about its true financial condition when applying for EU membership?
Bottom line, far as I see it, talking about Gold, talking about how much Gold you have .... doesn't cut it. Talk is cheap.
Gold should be used to settle accounts, or perhaps as collateral for trade notes or to settle international accounts.
A country either has it, uses it .... or it doesn't.
But supposed Gold holdings, existing unsubstantiated as just numbers in an IMF digital ledger and no actual use of it in financial affairs isn't going to cut it in establishing credibility.
As long as 'money' can be created from thin air by a chosen elite, there will be problems.
I should really use the term currency I guess.
Until there is some limit to how much can come into existence, humanity is held on a leash by those with contol of its production.
Gold, is in that way, an archaic tradition. 6000 years or so is not the record of something that doesn't work.
40 year looks a bit that way, though.
China should buy maximum possible gold because gold is the only real wealth.
The trillions of dollars which China is holding can become Zero easily if America decides to, China should not forget this.
But the western model is this :
1. Buy goods & services from developing world. Let developing world make money & buy gold.
2. When there is no more gold is left with west & western economy goes down severely , attack the developing world and loot their gold.
3. Go to step no. 1
China & other developing world should be beware of western pirates , they get rich on our sweat & blood.
Time to reverse all that.
Whatever and whenever China discloses her holdings, it will likely be twice of the "official" number.
I stopped reading at "True Official".
"It is also an inevitable path that the yuan must take from being a currency supported by reserves of material goods to one based more on credit. "
So, it looks like the ChiComs are purposely going full tribal westerner. Then it can be their turn to export their inflation.
Bretton Woods didn't just collapse, Nixon destroyed it!