The Case Of China’s Missing Gold

Tyler Durden's picture

Following China's official revelation on Friday that, for the first time since April 2009, it increased its gold holdings by "only" over 600 tons - supposedly in one month, which goes without saying is impossible and confirms how even the PBOC not only cooks its books but is willing to confirm that it does so - many have sprung to ask: what is really going on behind the scenes at the central bank which even Bloomberg's conservative estimates saw its gold tripling to over 3,510 tons.

Perhaps the answer is very simple: while many assume that the only reason China revealed (some of) its latest gold holdings is to further bolster its case for admission into the IMF's Special Drawing Right, the real reason why the PBOC may have resorted to telegraph to the world that it has much more gold is simply to prop up its markets.

Impossible?

Recall what little-noticed quote Reuters cited on July 3, just as Chinese stocks were plummeting 7% on a daily basis, with index futures halted limit down, and half of Chinese stocks halted from trading:

The Shanghai Composite Index plummeted more than 7 percent at one point in early trade. It ended the morning session down 3.3 percent at 3.785.6 points, heading for a weekly loss of nearly 10 percent. "This is a stock disaster. If it's not, what is it?" said Fu Xuejun, strategist at Huarong Securities Co.

 

"The government must rescue the market, not with empty words, but with real silver and gold," he said, saying a full-blown market crash would endanger the banking system, hit consumption and trigger social instability.

Perhaps all the PBOC did was take Fu's advice, and gently pull the curtain on what its true holdings are for no other reason than to restore confidence in its balance sheet and from there, to stabilize the market.

Incidentally, this is precisely what we said on Friday when the PBOC stunner hit the wires. Recall what China SAFE's official explanation was for the unexpected revelation:

Gold as a special asset, with multiple attributes financial and commodities, together with other assets to help regulate and optimize the overall risk-return characteristics of international reserves portfolio. From the perspective of long-term and strategic perspective, if necessary, dynamically adjusted international reserves portfolio allocation, safety, liquidity and increasing the value of international reserve assets.

And as we further noted "China had to wait until its stock market was crashing to present the "systemic stability" bazooka: gold. Because in revealing a surge in its gold holdings, the PBOC is hoping to finally provide that final missing link that will boost investor sentiment, and get people buying stocks all over again."

And now that the seal has been finally broken after so many years, and since today's update indicates that Chinese gold numbers are clearly goal-seeked with a specific policy purpose - to boost confidence - we await for the PBOC to start leaking incremental gold holding data every month (and especially in months when the market crashes) which will bring us ever closer to what China's true gold holdings are.

So perhaps it is a simple case of revealing the PBOC owns more gold than expected simply to preserve some more confidence after engaging in an unprecedented series of "plunge protecting" events few of which have had much success (at least until threats of outright arrests of sellers emerged).

Then another potential explanation was offered by Telegraph's Ambrose Evans-Pritchard who late today quoted Sharps Pixley's analyst Ross Norman as saying that "the level of gold reserves announced by China massively understates the country’s true holdings. “We think they have at least twice as much, maybe even 4,000 tonnes,” he said. "Sharps Pixley said a “seismic change” is under way in the bullion markets as economic power shifts to the East, boosting gold prices over time."

A division of the People’s Liberation Army mines gold and transfers the metal to the Chinese finance ministry, acting outside normal commercial channels. The government also buys gold directly from Chinese producers. This is an internal transaction and is therefore not necessarily recorded in China’s external reserves.

Then AEP goes on to quote David Marsh, from the monetary forum OMFIF, who said "China would risk unsettling the world gold market if it revealed bullion reserves of 2,000 or 3,000 tonnes. This might be interpreted as an unfriendly move against the dollar at a "delicate time."

And from a purely logical standpoint, it would be far more sensible for the PBOC to reveal just a fraction of its gold holdings, whether it was to stabilize its stock market or to boost its chances of SDR admission, than to expose the entire vault, especially if it wanted to buy more: it doesn't take rocket surgery to realize that one can buy more assets for cheaper, if one is not exposed as amassing a huge position in a given asset.

So the next question is if China does indeed have more gold than is represented, and if the PBOC is simply exposing its holdings one month at a time for whatever reason (especially since we know the PBOC did not buy 600+ tons in the month of June), then where is this gold "hidden" or, rather, where did all of China's gold - the thousands of tons both mined domestically and imported over the past five years - go?

One answer is presented by Louis Cammarasno in the following Smaulgld blog post:

"The Case Of China's Missing Gold"

  • The People’s Bank of China Updates Its Gold Reserve Holdings
  • Chinese Gold reserves jump 604 tons from 1,054 tons last reported in 2009 to 1,658 tons.
  • Many gold observers ask – ‘Is that it’?
  • Since 2009 China has mined over 2,000 tons of gold and imported over 3,300 tons of gold through Hong Kong*.
  • Where did it all go?

The Case of China’s Missing Gold

On July 17, 2015, the People’s Bank of China (PBOC) updated its gold reserves holdings for the first time since 2009. The PBOC reported adding 604 tons of gold to their reserves bringing the total from 1,054 tons to 1,658 tons.

The PBOC announcement was widely anticipated as a pre-requisite of China’s application for inclusion in the International Monetary Funds’ (IMF) Special Drawing Rights (“SDRs”).

China’s announced gold reserves are a respectible amount, but far lower than what many gold observers believe China has.

1,658 Tons of Gold – Good Enough For the IMF?

Having large gold reserves are not required to be in the SDR. England is in the SDR and has just over 310 tons of gold.

We have argued that China’s primary objective is not acceptance into the SDR but rather to establish a viable parallel international financial structure to rival the IMF.

We think China holds a portion of its gold at the PBOC as reserves with the rest held elsewhere in China.

The PBOC’s updated gold reserves are five times more than England’s and certainly enough to show the financial heft required for admission to the SDR. The PBOC doesn’t need to report thousands of tons of gold to get into the SDR and they don’t need to upstage their largest single country trading partner, the United States at this point (whose stated gold reserves are 8,135 tons).

China’s recent update to its gold holdings put it in fifth place among gold holding nations.

How China Reported The Update to its Gold Reserves

The PBOC’s addition of more than 600 tons of gold to their reserves showed up as a single entry in June 2015!

Unlike Russia that reports increases in its gold reserves monthly (that we catalogue here), the PBOC chose to include all of the increase in its gold reserves since 2009 in just one month.

The People’s Bank of China supposedly added 1,943,000 ounces of gold (approx 600 tons) to its reserves in June.

How Much Gold is There in China?

The additional amount of gold that the PBOC reported doesn’t seem to square with publically available reports on the amount of Chinese gold production and imports.

Chinese Mining Production

China is now the world’s largest gold mining nation and exports virtually none of it.

China has produced over 2,000 tons of gold since 2009.

Chinese Mining Reserves

There’s plenty more where that came from!

On June 25, 2015, Zhang Bignan Chairman and Secretary General of the China Gold Association presented this slide at London Bullion Market forum indicating that China’s gold mining reserves were approximately 9,800 tons.

According to the Chairman and Secretary General of the China Gold Association, China has over 9,800 tons of gold in mining reserves.

Chinese Gold Imports

China has also ramped up its gold imports significaly since 2009. From 2010 to May 2015 net Chinese gold imports through Hong Kong were well over 3,300 tons.

Chinese gold imports through Hong Kong have amounted to over 3,300 tons since 2009.

*China also imports an undisclosed, but large amount of gold through Shanghai.

Chinese Gold Trading on the Shanghai Gold Exchange

In addition to massive gold production and imports, China also operates the Shanghai Gold Exchange (SGE) a major physical gold trading hub. Withdrawals of physical gold on the SGE to date in 2015 are well over 1,200 tons and over 9,000 tons since January 2009.

Withdrawals of physical gold on the Shanghai Gold Exchange are well over 1,200 tons year to date in 2015.

Who’s Got the Chinese Gold?

If Chinese gold mining production and imports through Hong Kong and Shanghai don’t end up at the PBOC, where is it?

The Chinese People

A good portion of Chinese gold is with its citizens. The famed gold crazed “Da Ma” or Chinese housewives who buy any dip in gold prices supposedly hold a good portion of the nation’s gold. Some estimate that Chinese citizens hold thousands of tons of gold. One estimate claims Chinese citizens hold 6,000 tons of gold.

Chinese State Owned Banks

Perhaps another chunk of the Chinese nation’s gold is held in other state owned banks, not necessarily with the PBOC, such as the Agricultural Bank of China, Bank of China, China Construction Bank, China Development Bank and Industrial and Commerical Bank of China all located, like the PBOC, in Beijing, China.

Chinese Sovereign Wealth Fund

The China Investment Corporation (CIC), also located in Bejiing, is a sovereign wealth fund responsible for managing part of the People’s Republic of China’s foreign exchange reserves. The CIC has $746.7 billion in assets under management and reports to the State Council of the People’s Republic of China.

Off Balance Sheet Accounting?

The CIC lists $225.321 billion in finacial assets and about $3.130 billion of “other assets” on its balance sheet. It’s possible that some of these “assets” are in the form of gold.

The CIC has three subsidiaries: CIC International (responsible for internatonal equity and bond investments), CIC Capital (direct investments) and Central Huijin (equity investments in Chinese state owned financial institutions and state owned enterprises).

Central Huijin owns significant equity stakes in each of: Agricultural Bank of China (40.28%), Bank of China (65.52%), China Construction Bank(57.26%), China Development Bank (47.63%) and Industrial and Commerical Bank of China (35.12%).

For a gold backed Chinese Remnimbi 1,658 tons of gold reserves are insufficient, but for admission to the SDR are perfectly adequate.

If indeed China holds gold with the CIC and/or with any of the Chinese state owned banks, the PBOC could roll up that gold on to its own balance sheet in order to show more gold reserves quickly and easily in one month with a single entry.

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The Delicate Genius's picture
The Delicate Genius (not verified) Jul 20, 2015 6:05 PM

they've also been putting lasers on the heads of sharks at an alarming rate.

knukles's picture

And, of all things, would you believe building islands in the middle of the oceans! 

The Navigator's picture

A boating accident along the way to those islands???

Publicus's picture

The gold went into the electronics that you bought. You goldtards are grasping at straws.

Bastiat's picture

Got a good handle on the numbers there, do ya?

whotookmyalias's picture

The Chinese have always been so forthcoming and honest.  Now I'm confused!  What happened to the gold?  We must know.

Skid Marks's picture

 

How about this for a Conspiracy Theory:
Citi is working for PBOC to corner the market for Gold. China is motivated and has the resources.  Citi is just a typical capitalist whore working for a fee to enable China to take control of the gold market.

As for the miners... it is already known that China wants to buy up the Australia mining companies, as well as others. By driving the miners into bankruptcy China will be able to buy them at a bargain price, through proxy corporations. Part of the deal, of course, will be relaxed immigration standards for Chinese workers who will eventually replace all the local workers in the mines for low wages. The Chinese miners will sell product back to China for slightly over production cost. China gets the valuable ore for bottom line cost, colonizes more countries and destroys economies of western countries all while appearing to be a “white knight”.

 

logicalman's picture

Your scenario is plausible, with a bit(?) of modification.

You are falling for the 'countries' as a divide and conquer technique.

The battle that must be fought is between decent people and greedy psychopaths.

Honest exchange and real money would make the earth a decent place to live and bring up a family.

 

Supernova Born's picture

China's report doesn't indicate how much gold they have, it indicates how much gold they want.

Price impact negative.

The Chinese are still stacking.

CheapBastard's picture

I know several people form HK and Mainland and they all have 20-40% of their hard earned money in gold. Some hold part of it in Bank of China where you buy it and they store it and they said you get a passbook sort of like a savings account book. Some others say they buy the physical but I have no idea where they store it. Do they have safe deposit boxes there?

 

[excuse me if it's a stupid question]

Four chan's picture

imagine if every slave posessed just one oz.

Soul Glow's picture

They wouldn't be a slave with $1000 in gold to their name.  SHit not even the average american has $1k in their savings.  Money is for rich folk, thus why when the IMF "confiscate" bank accounts poor people won't care.  In fact they will be happy and call it social justice.

China increases it's gold holdings - 600 tonnes - and a few days later the price is smashed.  I don't know about you but when economists talk about supply/demand when demand increases as it did with China's one month crazy buying spree price should rise, unless supply went up, but there is not evidince supply went up to mach.  What would an economist think?

Oh that's right, economists are brain dead pieces of shit that don't factor in all the paper derivatives of gold.  These derivatives are used to manipulate price, to drive price down.  People won't get it until there is no more gold at coin shops.

Lore's picture

I don't think there is overt complicity so much as suppression of real things in a fiat world, benefiting eastern buyers circumstantially.  Looking back on last Friday's "GLITCH" (shutting down the markets for four hours and wiping out unwelcome Sell orders before the market could start crashing) followed by last night's "FIRE SALE" (stomping before the market opened in Asia, the main source of physical demand) speaks to me of cosmetic desperation by Western banksters. Note how last night's anomaly was TOTALLY IGNORED by lamestream media. My mistake (and that of many ZHers) is in continuing to look for behaviour that could be categorized as rational price discovery, because everything now is smoke and mirrors, hardly different from "Weapons of Mass Destruction," "Al CIAda," "Yellowcake," "ISIS," and other geopolitical lies.  We're being fed lies in every aspect of our lives. 

So:  If you were a buyer last night, then the manipulators created a marvelous opportunity for you.  If you were an insider, then it was a marvelous opportunity. But it's a stretch to suggest that East is acting in concert with West. The western elites are racist as hell, and psychopaths do not willingly share power.

Oracle of Kypseli's picture

Gold should either be $500/oz or $25000/oz.

According to Forrest Gump prices always go up so then $25,000 is more likely on this push pull debate.

americhinaman's picture

the best analogy to what you're probably used to is that gold passbook accounts are nearly exactly like FX accounts (FX outside of your home country).  a passbook is simply one of those passport-sized booklets of transaction records - they're popular in much of asia where cash is used often, and passbook accounts typically are denominated in either local currency cash or gold.  very few people have FX passbook accounts, because very few people handle FX cash in their home country.

that said, in a passbook gold account, you can buy or sell gold the same way that you would buy or sell FX.  gold is the one FX that all ethnic chinese handle in physical form, if they have any savings at all.  the bid/offer is usually < 1% and sometimes as low as 0.15%.  there might be a service charge if you ask a teller to do it, but you can do it online or at some ATMs as well.

you can make a physical withdrawal also much the same way you might withdraw FX cash... counter service only (you can't get FX at an ATM either).  if you want to convert your passbook gold to physical gold, you pay a fee for the processing/handling of the physical product.  that fee is roughly 1% of the value of the withdrawal or less if your withdrawal amount is high... i.e. again very similar to withdrawing FX from a bank.  you can also deposit standardized physical gold products (for example, gold bullion coins from certain countries as well as gold products minted by the bank itself... i.e. products they can easily verify and test) into your gold account.  There is no fee for this at my bank, and the bid price is the same as the bid price within the passbook gold account.

so basically, gold accounts in ethnic chinese countries is basically like an FX account.  the all-in bid/offer to transact in physical gold via a passbook account is around 1.5% for small amounts and as low as 0.5% for large amounts... amongst the lowest in the world.  however, if you do not withdraw the gold then the cost is as low as 0.15%.

---

unrelated to your question, i wish zerohedge would stop printing nonsense about china "lying" about "manipulated data" about it's gold holdings.  nonsensical arguments about the merits of gold do not inspire confidence in potential investors.  china's information release never indicated that they accumulated all the gold in one particular month; it indicated only the amount accumulated within the FX reserve account since the last update.  

as for the remainder of the gold produced and imported to china, it was purchased by regular folks and by OTHER government agencies.  china's FX reserves are a fraction of their total government-owned assets, and similarly the gold within china's FX reserves are a fraction of their total gold holdings.  in addition to FX reserves, china holds trillions in aggregate investments... State Owned Entities, Sovereign Wealth Funds, etc.  they feel no need to trumpet around their aggregate holdings.  a confident person doesn't brag, and a person with a lot of cash who wants to buy something in massive quantities doesn't shout it out to the world so that he can get front-run or HFT'd.

 

Laowei Gweilo's picture

anecdotal but for what it's worth, i don't know a single person in china that actually gives two shits about gold and values it

 

but it's a southern thing? all the aunties in guangdong? beijing and north though, mostly just businesses... very few people are in stocks, even real estate is a bit wary after Dalian and area sort of maybe probably went into a recession... sure as fuck not gold... most people just buy more businesses... groceries stores, small farms, whatever. just something tangible that makes or sells stuff.

 

so, i'm not really sold on the whole 'chinese love gold' meme but maybe that's a regional thing and i'm just not exposed to it.

 

not convinced the chinese really want to effing tie their currency to gold or even back it by gold when they're basically the antithesis of the gold standard in practice.... there is LOGIC there were they WANTING to replace the USD but i don't really think chinese see smart value in that burden lol. being a reserve currency is mostly about pride and not necisarily about what's best for keeping control of a country and government =p

philipat's picture

This Article is a little confused and misleading. Koos Janssen provides a much fuller and clearer picture in ih regular Articles. But in particular:

1. The SGE represents domestic wholesale demand and the PBOC does NOT buy Gold through SGE. The SGE operates entirely in CNY whereas PBOC buys Gold offshore because it wants to reduce is USD holdings in reserves.

2.ALL reported domestic mine production MUST be sold through SGE. Of cours, that does not necesaarily preclude additional mine production being taken into reserves by PBOC but, again, that is NOT from REPORTED mine production.3.

3. China now importd Gold directly through Shanghai AND Beijing so the Gold imports through Hong KOng no longer represent an accurate reading of total Gold imports, which can be seen from the Chart showing Hong Kong exports to China.

4. When OFFICIAL China imports Gold, it does so a "Monetary Gold" which DOES NOT appear on the published import and export statistics of any country as there is a special International Tariff code for Monaetary Gold.

Long story short: It is NOT possible to calculate Official Chinese Reserves from ANY published data. It is most probable that China is not fully disclosing official reserves which are stored (And not reported as PBOC holdings) in the other State owned Banks and/or reported as "Other Holdings" and/or Off Balance Sheet in various SPV's etc.

The basic analysis here is correct but the details in between are somewhat confused as above.

Bro of the Sorrowful Figure's picture

also anecdotal, but in my experience chinese people dont talk about any gold that they may own. been here 4 years and speak the language, and not once has someone mentioned gold to me. until, however, i say that i like buying gold. then almost everyone who could be considered middle class and up has said 1) yes i buy some too, immediately followed by 2) i didnt know you were jooish

edit: apart from while on ZH, doesn anyone here ever talk about gold to anyone besides close family members anymore? if you take ZHers as an example, im sure youll see that although almost everyone here is stacking, no one is making any public announcmenets about, many probably dont tell anyone at all.

the chinese are the same. why would you expect to hear the chinese walking around telling people about the money (gold) that they are almost certainly hiding from the government and from everyone else around them.

Laowei Gweilo's picture

that's fair but i really meant people i know, or rather people i know well enough that i know their finances

 

so, small sample which is why i tried to disclaim it ;p

MontgomeryScott's picture

For what it's worth, I don't know a single person in China.

WHAT, actually, is a 'reserve'?

An emergency backstop in case you run out of whatever you need.

When the fuel light comes on in your automobile, you are running on 'reserve'. When the pantry's empty and you have no currency, you go to the basement and bring up the RESERVE supplies.

The WHOLE DEFINITION of the USD FIAT being a 'reserve currency' is actually BULLSHIT. You see, THEY (the CONUS) have NO RESERVES of GOLD to back it up in the FIRST PLACE. HELL, the U.S. MINT halted sales of SILVER a couple of weeks ago (AGAIN). I honestly don't know if the U.S. MINT actually SELLS GOLD coins any more (I've NEVER seen one for sale in my LIFETIME, but I'm only in my 50's). They tried the plated Tungsten thing (but it didn't work out all that well, as I recall, so they started ANOTHER war to try to re-secure the PETRODOLLAR STATUS; and THAT one isn't working out very well, either).

WHAT nation is buying GOLD, and MINING GOLD, and HIDING and STASHING ('stacking') GOLD (besides the usual Middle-eastern nations)?

PHYSICAL GOLD is actual CURRENCY. The Chinese people would GLADLY settle in GOLD for their transactions (instead of FEDSCRIP or WHATEVER). That's the way it USED to be done between NATIONS (WAY BACK, up until '71, or 9/11/01).

It's NOT about PRIDE. It's about the 'golden rule' axiom: 'HE WHO HAS THE GOLD MAKES THE RULES'. SHORT version of this: 'PUT UP, OR SHUT UP.'

 

MontgomeryScott's picture

You forgot the case of the disintegrating (gold reserves) pistol:

https://www.youtube.com/watch?v=3X2ALG9iGPg

Dead Canary's picture

Maybe they could move one of those ghost cities to one of those faux islands.

logicalman's picture

Don't go giving 'em ideas!

 

doctor10's picture

shoot!! they only SAY those are cities. Scratch the paint and see the gold!! or tungsten

Hiding in plain sight

daveO's picture

A division of the People’s Liberation Army mines gold and transfers the metal to the Chinese finance ministry, acting outside normal commercial channels. The government also buys gold directly from Chinese producers. This is an internal transaction and is therefore not necessarily recorded in China’s external reserves.

disabledvet's picture

1980 all over again.

Hope you folks levered long here have done your math.

aurum4040's picture

It appears that my actual holding calculation, made yesterday, of 300 to 400% of 16xx tons was a fair hypothesis.  

truthserum's picture

You can't educate the fools, you'll just get banned. They honestly think somebody is magically forcing the price down so that everybody can buy the stuff below market value.

MontgomeryScott's picture

Not sure which arrow to hit here.

You seemed to have forgotten the obligatory <S> tag. You forgot, didn't you? DIDN'T YOU?

The magic, unaudited, fairie-dust 8 thousand tons of gold held in reserve in CONUS, divided by the 90-day-plus magically-frozen 18 TRILLION dollar debt, if paid off in GLD PHYZ, would set the price at (approximately) 1 million, 111 thousand, 111 USD per OUNCE.

After 23 weeks here, you might have taken the time to pick an avatar (instead of the 'paper bag' that trolls seem to prefer).

HUH.

Well, as the sheople were told, GOLD is just a 'useless relic'. I guess that's why the CONUS hides the fact that it has NONE, while the Chinese stockpile it without abandon and appear to be hiding the totals, and 'someone' keeps dumping billions at a time in worthless nakedly short-sold paper on the market (three times in the past month) in order to drive the spot price DOWN.

 

ebworthen's picture

No doubt some fell into the Chariman's, er...Party Member's...er...patriotic mandarin's pockets.

But really, if you're going to replace the Dollar, you have to lie about how much Gold you really have.

Over report growth and get the West to buy all your shit, under report Gold holdings, then sell all your U.S. Treasuries at the right time.

MontgomeryScott's picture

DING DING DING!!!

Johnny, we have a WINNER!

Tell him what he's won, Mr Pardo!

     It's an all-expenses paid trip to CAMP FEMA!

     (canned applause)

     YES, the place where Hillary Clinton's re-education of adults is like a vacation in PARADISE! Avoid nuclear blasts, and famine on the streets of EVERYTOWN USA, with our EXCLUSIVE 'take-care-of-you' wacky-wild ride to REALITY! Swipe your RFID chip, and get all the Scopolamine that you want, FOREVER!

     (cut to scenes of the beaches of the Bahamas, and sexy women; and well-hung men fucking them)

..........

IN ONE DAY, the entire United states WILL be brought down due to what you have, um, 'figured out'. Most of the European nations, as well (YES, the U.K. is among this group)...

The ULTIMATE 'pump-and-dump', I suppose.

Divine Wind's picture

 

 

 

China would be foolish to ever release the true figures.

Logic would dictate this would be as foolish as any ZH gold bug (self included) disclosing their own holdings.

A secret stash provides options.

 

wisefool's picture

The rule of 1/10th. Brag openly,honestly and often about 1/10th the amount of wealth you have and even where you store it ... the other 9/10ths is between you and the people who would help you defend it.

SillySalesmanQuestion's picture

+1. They conveniently forgot to put a 0 on the end.

SHEEPFUKKER's picture

A secret stash provides options.....

 

Yes, true. But don't you eventually have to show your cards? Otherwise, why ever take a seat at the poker table?

N2OJoe's picture

Sure, but you do it when it's most advantageous for YOU and most detrimental for your enemy.

Till then, you "Feign weakness when you are strong, and strength when you are weak" -Sun Tzu

Luc X. Ifer's picture

+1, still seems so many forgot that china is populated by chinese :)

Luc X. Ifer's picture

True, but they decided it is not yet the moment but to bluff - exactly like in poker, they try to let the other players believe that they have low cards, isn't so easy to see :) ?!
Does 'delusion is the strongest weapon' trigger a ring, hello?!

Mr. Magoo's picture

Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate.

Sun Tzu

All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.

Sun Tzu

Pretend inferiority and encourage his arrogance.

Sun Tzu

He who is prudent and lies in wait for an enemy who is not, will be victorious.

Sun Tzu

emorybored's picture

Exactly! "Inscrutable" comes to my Western mind...

 

logicalman's picture

China announcing its true holdings.......

THE NUCLEAR OPTION.

 

MFL8240's picture

What the real number is is irrelevant.  They helped this disgusting group of liars and thiefs get Gold where they wanted it.  The reality of the situation is relavant to nothing.  We trade in the US and in the sewer sytem in London on headlines, not reality so, it worked just like the phoney employment numbers work and the many hundreds of threats by Mr. Yellin and company that rates are gonna be rasised. 

Perimetr's picture

the vaults of JPM??

 

Traded it for "Most Favored Nation" status with Russia??

 

Went to Swiss vaults in anticipation of having to flee irate Chinese who lost everyting in market???

 

Som Ting Wong!!!

logicalman's picture

In a Chinese phone book, there are so may Wings and so many Wongs.....

You might wing the wong number!