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China's Secret Gold Hoarding Strategy
Submitted by Stefan Gleason via MoneyMetals.com,
China’s recent stock market gyrations have some analysts now calling China the biggest bubble in history. But those who write off China because of market volatility are missing a more important long-term trend of Chinese geopolitical and monetary ascendancy. That trend shows no signs of abating.
China’s leaders have a clever strategy, and Western financial powers may someday wake up in shock when they realize what has occurred.
It’s true that the Chinese government has helped fuel artificial demand for property and equities. China skeptics who argue that these artificially inflated markets will crash to much lower levels could well prove to be correct. Some China doubters also argue that a downturn in China’s economy will put downward pressure on commodity prices.
Commodities – from crude oil to copper to gold and silver – have already suffered a severe cyclical downturn. Commodity markets tend to be leading indicators, moving in advance of whatever economic story of the day the financial media are telling.
But single-day drawdowns of more than 8% in the Chinese stock market this summer certainly caused some forced liquidations of precious metals positions.
The very fact that booms and busts in China’s markets and economy can now exert heavy influence in globally traded markets such as commodities proves the point that China’s influence isn’t on the wane. Not by a long shot. Even if China’s double-digit rates of growth in the early 2000s prove fleeting and never return, China’s economy still remains on track to eclipse the U.S. economy in the years ahead as the world’s largest.
China, Russia Are Quietly Emerging as World’s Gold Buyers
Chinese officials aim to ultimately to challenge the America’s standing as the world’s superpower. That’s why they’re forming a strategic alliance with Russia, an adversary of the U.S. That’s why both the Russian and Chinese central banks have quietly emerged as the world’s largest gold buyers.
In July, the People’s Bank of China reported that it has added more than 600 tons of gold bullion to its stockpiles since 2009, taking the total to 1,658 tons. That represents a 60% jump in gold assets in just six years.
In fact, all of that new metal was added to central bank’s ledger in June 2015.
With gold prices down in June, there's no way the actual buying had occurred then. It appears central bank officials simply moved that metal over from the books of China's state-owned banks which can hold metal secretly.
So that’s just what the Chinese are reporting officially.
Unofficially, according to MarketWatch columnist David Marsh, “China probably has a lot more gold than it admits.” That’s because the Chinese government regularly acquires gold directly from China’s mining industry.
The transactions are settled in yuan rather than dollars, so most or all of these “internal” gold purchases can avoid showing up as foreign reserve assets.
In examining gold flows into China as well as Chinese gold production, some experts believe that China actually holds more than 10,000 tons of gold, not the “paltry” 1,658 tons the People’s Bank of China is disclosing.
China Has an Incentive to Understate Its Gold Hoard
It makes logical sense that China would understate its gold aspirations. If you had the means to acquire hundreds, or even thousands, of tons of gold, you’d want to do so as stealthily as possible in order to avoid tipping off the market.
If your strategic objective was to dramatically boost gold reserves over a period of several years, you wouldn’t want to see the price rise – at least not while you’re still accumulating. And if you had no ethical qualms about interfering in the market, you’d want to rig prices lower so you could obtain more ounces.
Chinese officials are more than willing to manipulate markets, whether through subterfuge, deceit, or outright force. Recently, in an effort to prop up the stock market, they tried to forbid people from selling shares of stocks. How heavily involved China is in managing the gold market is impossible for an outsider to know.
But there is plenty of evidence to suggest that China is covertly buying gold while dumping U.S. Treasuries. JP Morgan analyst Nikolaos Panigirtzoglou calculated that China’s foreign exchange assets got depleted by $520 billion over the past five quarters. Most of that $520 billion in paper asset dumping comes, presumably, from China’s massive holdings of Treasury securities.
China Wants Admission to the Global SDR Club
If China continues to unload U.S. bonds at a feverish pace, the Federal Reserve might be forced to launch a new bond-buying campaign. That, in turn, would diminish the credibility of the U.S. dollar as China seeks inclusion of its yuan into the International Monetary Fund's Special Drawing Rights (SDR) currency basket.
As Reuters reported, China “is pushing for the increased use of the yuan for trade and investment as part of a long-term strategic goal to reduce dependence on the dollar.” The yuan’s ascendancy to the status of a top-tier SDR currency would go a long way toward making the Chinese currency a serious global competitor to the U.S. dollar.
However, if it were known that China actually had 10,000+ tons of gold on hand, other countries would more likely balk at China’s pending petition to join the International Monetary Fund’s exclusive SDR club. (A decision is expected this fall.)
China’s gold-accumulation strategy will go a long way toward making China more independent of the dollar and other fiat currencies.
If you actually believe what the People’s Bank of China reports as its gold reserves, then it has a long way to go to catch up with other countries. While China’s official stash is the world’s sixth largest in absolute terms, it ranks much lower in relation to its economy and its total foreign reserves.
China’s admitted gold hoard represents just 1.6% of its foreign exchange holdings. By comparison, Russia’s gold bullion accounts for 13.4% of reserves.
Whether it owns 1,658 tons or upwards of 10,000 tons, China’s appetite for gold is far from being satisfied. The Chinese government will continue to buy, both officially and unofficially.
China may never establish a model sound money system; nor is that its goal. China simply appreciates the universality of gold. And, as the saying goes, “gold goes where it’s most appreciated.”
Whether you’re a Communist or a capitalist, whether you speak Mandarin or English, gold remains the one permanent, immutable common denominator. Gold’s value has been recognized universally for hundreds of years and will continue to be recognized universally regardless of whatever market gyrations or economic or political strife the future may bring.
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We have been giving Yamashita's gold (most of which was China's originally) back to them through a series of currency swap agreements they have agreed to uphold.......this is almost completed ....once over the game will change
The secret is, of course, that Ben And Janet are in on the game and willfully going full Romanic on us by keeping the price low for the Easterners to empty our vaults...
Ahh, so the Chinese are rigging the market. Them's fightin' words! We would never do that.... would we?
The best discussion of this topic is by Jim Richards and The Death Of Money. As jim puts it, China just wants to be in the SDR Club. And ultimately, they really don't want to back the yaun with gold. They, like printing fiat just as much as the next guy, but if conditions warrant they have to....... they will.
Wi Bai Bling
Yes the central planners of China will try all schemes to keep their people at bay, but at the end of the day it is still central planning built on a credit created bubble with just as much or more misallocation and waste as the rest of the world. Sure they make do some things that look like good strategic moves but so too did the Soviets. That said acquiring gold at this point does appear to be a good move. The question is if China will be the main driver of the upcoming monetary shift, and for that, I have my doubts.
Did nobody inform the author that The IMF has already announced that the CNY will NOT be included in the SDR this AUtumn and will have to wait at least until September 2016? Of course, this was an entirely independent decision by Mr Lagarde and the IMF which wasn't in any way influenced by Washington ;-)
well, looks like i and red china do have something in common.
I think the world wants to return to a sound money international trade platform.
China and Russia have big plans that are attracting most of the rest of the world. These plans include the BRICS, EEU, NEW SILK HIGHWAYS, and the SCO. A global currency reset based on gold, silver, oil, and other resources has been in the works for years, the only thing standing between these plans, or rather slowing them, is US intransigence and duplicity.
It does not make sense that China and Russia are frantically acquiring gold, and covertly helping to keep the price down during accumulation, without expecting their investments to greatly appreciate at the end of their accumulation spree.
1) China as a rising power can suffer big time Depressions and still come out No. 1. The USA suffered more-or-less like almost everyone else in the 1930s, but after that (and WWII) wound up No. 1...
2) China's goal of getting its Yuan into the SDR pretty much requires significant gold purchases. Whether they can buy a few THOUSAND more tonnes of physical without sending the price to the moon is another story (which I have no good insight into -- but my guess is that BIG Chinese buying would cost a LOT).
They already have the gold and are accumulating more all the time. Thousands of tons more than they have officially stated.
China has imported a lot more than 600 tons in 6 years.
It is in China.
It doesn't really matter all that much if it is on the CB books or held by the Chinese people. If it needs to flow, it can.
Your theory requires that we have a WWIII and the world (with the exception of China) gets leveled again. Let's just say the new Marshall Plan and Bretton Woods won't be as sweet for the US as the last ones were.
You also completely overlook the possibility that they're just preparing for an SDR basket that includes both the yuan and gold.
They don't need to emulate the Hunt Bros to accomplish that goal.
Yamashita's gold was from the Philippines.
Kliguy, do you have a link?
If we were giving Yamashita's gold, we wouldn't need to be raiding third world countries and looting theirs.
Bill Holter wrote a good piece on this topic two days ago.
http://www.jsmineset.com/2015/08/06/the-rumblings-of-war/
Interesting article, food for thought. While I do not agree with everything Holder writes (eg, a pile of 10,000 tonnes would have probably rocked the physical good market), but a nice piece.
Well, if you follow what is going on in Shanghai (the largest gold exchange in the world) and how much gold China actually produces (top in the world with zero exports), then you would you begin to understand how much gold they actually have.
Oh, no doubt that China is the Number One producer of gold in the world (and no exports). And that Shanghai moves the product...
But, I don't think that very many really understand what is happening in China's physical gold markets. Certainly I do not.
C3PO, I don't mean to be factious, but what is there to understand that you don't understand? Or more specifically, what meaningful things don't you understand or that you might understand better? Which material things, things that might make significant changes in your thought, don't you understand?
China is buying gold. China is producing gold. China's citizens are buying more gold. China's not exporting gold. China will have or already does have the world's largest gold hoard. How that hoard is allocated among various government entities or between private and public or what China's intent is in owning gold is really another question, not one of the physical gold market.
You make a mystery where no mystery need be.
If you want a real mystery, a real mystery, slight of hand, the dog that did not bark, consider perhaps 1) how much gold does the US government or the Fed really have; 2) where's Germany's gold; or 3) who buys those paper short sale and why. Those questions might keep you up nights because they're unanswerable (by you or me) and go to the heart of whether the dollar-dominated world economy has a beating heart or is a coked-up zombie headed for Elm Street.
Wasted-away in Freddie-Krugerville.
Given that China makes a lot of electronic gee-gaws, there is more gold being exported than you think.
And given that wealthy Chinese are fleeing the land of milky honey as fast as they can clear customs with their exceptionally heavy luggage, there is even more gold being exported than the first classification would suggest.
Anyone want to take a wild stab at just how much gold they actually have? I conservatively estimate greater than 30,000 tons, personally.
Those who speak don't know.
Those who know don't speak.
The problem is everybody is making guesses about what the Chinese long term strategy is, but only the Chinese really know and I'm not even sure about that. China's big problem right now is they still haven't figured out how to make their markets work well and there is too much cronyism, especially on a regional basis. The way things are going though, they may join the SDR club just in time to watch the world economy take a shit......
We need a few more volitile countries.
Ukraine was a great, easy steal of a bunch of gold.
Greece is proving more problematical but will lose its gold.
.
Baklava can be more valuable than gold.
The chinks are welcome to buy ALL the shiny lead available, it won't save their system from inevitable crash.
The USA crashed hard (granted, most of the world as well) from 1929 - 1942. But the USA wound up No. 1.
Because of Bretton Woods.
Because the rest of the world got beaten to shit and we didn't.
It doesn't bother me how much gold Yamashita had. I own silver, and I know he never hoarded that.
Silver For The People
“you’d want to… acquire hundreds, or even thousands, of tons of gold… as stealthily as possible to avoid tipping off the market.”
Ah, a master of understatement.
You’d also want to acquire such gold before the market realize how little US Treasury gold stands as backing (or collateral) for $15 to $18 trillion (again, “trillion”) in “cash equivalents” floating around the world.
Most people think the American money supply (banknotes and bank reserves) is measured by the Federal Reserve’s balance sheet; currently about $4.5 trillion.
This would be a major mistake.
The enormous disparity between “cash equivalents” and FR balance sheet stems from unanticipated consequences of governments’ attempt to guarantee bank checking deposit.
By these guarantees, when a bank failed, or was seized by the government, all deposits less than $250,000, for example, would be protected; all amounts over that limit would be lost.
This immediately created massive problems for depositors with accounts larger than the limit (wealthy individuals, companies and corporations).
It would, for example, be a disaster for a corporation with a “cash” position of $500,000,000 to be caught in such a bank failure. (By “cash”, a “bank account” is meant.)
This policy of guarantee set in motion mad scrambles by large depositors to protect their “cash”. It led to the creation of so-called zero-balance accounts (which go by many names). By these accounts, positive balances in large checking accounts were swept into US Treasuries at end of each day. Thus, if the bank failed/was-seized after closing that day, the account holder had nothing to lose.
But there was a limit to this remedy: very quickly, there were not enough Treasuries to satisfy demand, by US banks as well as foreign ones. This gave rise to the demand for Mortgage Backed Securities (MBS) as a substitute for Treasuries. This demand was world-wide. Now, there are probably $6 to $15 trillion MBS serving as so-called “cash equivalents” on corporate balance sheets world-wide. (Beginning about 15 years ago, corporations began replacing the term “cash” on their asset statements with “cash equivalents”.)
And now all these “cash equivalents” are collateralized by US Treasuries (directly or indirectly): that is, American taxpayers.
Other “cash equivalents” include all US Treasuries; dollar instruments owned by foreign private or central banks; all MBS owned by the Federal Reserve; all currency issued by the Federal Reserve (the scrip we carry in our pockets); and a whole plethora of fruit-cake debt (such as defaulted-SBA loans, defaulted-car-lot loans, defaulted-student loans, defaulted-credit-card debt et cetera).
Few people realize the enormity of collateralizing the world’s reserve currency with such financial trash as enumerated in the above paragraph.
When we trace all these “cash equivalents” to their collateral, we arrive at the gold that may or may not be at “Fort Knox.”
Our problem now is, ‘How do we make the price of that remaining gold equal to the $15 to $20 trillion in “cash equivalents” supposedly collateralized by that gold?’
And who would believe it… until it’s too late.
Hubristic US population fed a steady diet of Fiat Propaganda will be caught Blindsided, resulting in Much Wailing and Gnashing of Teeth, especially when They Discover the FED has Stolen their Much Vaunted Stash of the Barbarous Relic!
The Zios are having a hard time of it. Doing all they can to hold on to power.
“Chinese officials aim to ultimately to challenge the America’s standing as the world’s superpower. That’s why they’re forming a strategic alliance with Russia, an adversary of the U.S. That’s why both the Russian and Chinese central banks have quietly emerged as the world’s largest gold buyers.”
----------------
After the fall of communism, both China and Russia wanted to work with the West. In the case of Russia, Yeltsin was convinced by the Harvard Boys (J) to have an extraction economy. Russia was also to create Euros and Dollars as loans in exchange for formerly debt free lands. From those lands were to be extracted oil, gas, and minerals. This is obviously an unbalance economy, which then puts skilled labor out of work, and then concentrates Oligarchy. Russia was slated for destruction, not friendship. Putin ejected most of the Oligarchs (J), and is guiding Russia toward a balanced economy.
In the case of China, Wall Street purposefully lifted jobs from the U.S. using greenmail tactics, this in order to take wage arbitrage. China agreed to MFN terms and BIS rules, yet kept its State Banks. China tried to get the SDR system changed to better regulate trade, which would have let the Yuan be realized as a currency commensurate with China’s actual economic power. China was rebuffed, especially by the U.S. This then led directly to the creation of an alternate economic system outside of the dollar. China and Russia have reacted to crazed neo-cons and bad economic policy emanating from Wall Street/ Washington; not the other way around.
“The very fact that booms and busts in China’s markets and economy can now exert heavy influence in globally traded markets such as commodities proves the point that China’s influence isn’t on the wane. Not by a long shot. Even if China’s double-digit rates of growth in the early 2000s prove fleeting and never return, China’s economy still remains on track to eclipse the U.S. economy in the years ahead as the world’s largest.”
Booms and busts are a function of the private bank credit money system. China’s money supply is a mixture of State Bank and Private Bank Credit. The state banks can issue zero interest loans, and have legal authority to cancel debts. This then makes their money supply have a large ratio of debt free as compared to the west. In effect, China will not suffer the business cycle, which in reality is a debt cycle. (Goods and Services want to be consumed at a reasonably steady rate, so the notion that there is a business cycle is nonsense; these cycles are predicated by the money system.)
China is also using Georgist taxing principles in two of its more crowed cities, Chongqing and Shanghai.
China is using public money to improve the commons, such as waterways, rail, infrastructure, etc. This is exactly the same method used by U.S., Germany, and France to work their way to wealth. The U.S. and the West seem to have forgotten this episode of their history. The west now seems to think markets are GOD, and that all money must be private bank credit.
https://en.wikipedia.org/wiki/Chongqing
China now has ready access to minerals and resources especially via Russia and Africa. China has a vastly improved workforce, especially due to Wall Street’s connivance. China has a money system that has less debt friction and overhead costs; hence this lowers overall cost of commerce. China is experimenting with a superior fiscal policy, i.e. Georgist principles, which tax away the free lunch and unearned rents that stifle economies. Imagine a China that has no taxes on Labor or the means of production.
Game over. The West better pull head out of rectum or it will soon find itself permanently behind China, and Russia as its adjunct. China will become permanently efficient.
China’s gold-accumulation strategy will go a long way toward making China more independent of the dollar and other fiat currencies.
The idea is that a future SDR basket will consist of various currencies, commodities, and GOLD. The Gold hoards, especially old Rothschild hoards are also angling for a SDR basket that includes Gold. China has gold mines. China can buy gold using excess dollars acquired in unbalanced trade.
Instead of recycling dollars to buy TBills, China can vector their excess dollars instead to buying African land, South American land, houses on the U.S. west coast, and also buying gold. Said Gold is continually driven down in value due to paper gold manipulations by big Western banks.
If China didn't take possession of physical gold in this environment, they would be stupid. They are not stupid.
i garuntee the west is manipulating the gold price. once it is known that the Dollar and the system that supports it is dead, our way of life goes down the toilet. the rest of the world will be full of gold and focused on the silk road. The East loves and respects gold, it will be revalued much higher and those with the gold will be much wealthier and readyto invest.
Well that's very kind of them to admit it...
Hi my name is BIll and I'm a buyer as well.
Whether you’re a Communist or a capitalist, whether you speak Mandarin or English, gold remains the one permanent, immutable common denominator. Gold’s value has been recognized universally for hundreds of years and will continue to be recognized universally regardless of whatever market gyrations or economic or political strife the future may bring.
Small tribes of humans had debts and credit with each other. They didn’t use money.
The temple and the King worked together as part of the controlling hierarchy, and Gold as money first was issued as weight by the temple. The temple weight of Gold, or silver, was in barley weights. Hence, gold is measured in ‘grains’ and those are grains of barley on a balance scale.
The temple acquired Gold, as humans would gift it to them in the form of jewelry. Gold was found easily in alluvial plains, as it would shine and catch the eye. When the temple issued the money by weight it was to represent debt/credits on their ledger. Gold especially was used for trade across large distances. The temples had a workforce of widows and children who made crafts and goods in large quantities. These crafts and good would be caravanned or shipped to nearby cities for trade. The further away the trade occurred, the more risk – so interest on money creeped into the system.
Later, metal money came to become stamped, probably first in Lydia. This stamp transferred the law from the temple to the king. The stamp also changed weight of metal (to represent goods on a ledger) to law money. Law money is good for settling debts and is pay to bearer upon demand.
All money is law. Yes, humans have a craving for the yellow metal – and perhaps it is now genetic due to evolution. It would be a genetic defect that obscures the vision of what money really is though.
Money’s volume must be restricted to equal goods and services. Money must channel properly, and not steal for its right to exist. Metal money could circulate debt free, and did for thousands of years, but that advantageous feature can be legally codified in any material, including digits on a computer screen.
sovereignmoney.eu
What concerns me most about China and gold is this fact:
By 2020, the National State Population and Family Planning Commission projects that males of marrying age will outnumber females by at least 30 million.
http://www.newsweek.com/2015/06/05/gender-imbalance-china-one-child-law-...
Recruitment into their armed services must be very easy. They'll be able to get gold any way they want. From Wikipedia, we have 1,361,755 active personnel and 850,880 reserve personnel. Hmmmm. Gives new meaning to the phrase "Mongolian Horde Theory."
When I bought gold in China no one was taking names. I don't think the Chinese government is planning confiscation.
Where is a good place to buy Panda's in China? I'll be in HK soon.
"Chinese officials are more than willing to manipulate markets, whether through subterfuge, deceit, or outright force."
Let me state that a bit differently:
"Wall Street/the Fed are more than willing to manipulate markets, whether through subterfuge, deceit, or outright force."
And the Chinese learn fast.
I am also hoarding. I bought two gold Eagles last month. But I am trying to keep the gold price down (it's working!) - so you will never know whether I only bought two, or maybe I really bought three!
Actually I did buy two, but I am accumulating cash and waiting for one of two things - the Fed actually hikes (should be a quick drop of $50 in gold followed by a sudden snap back) - or the Fed does nothing into December ( or eases or QEs) such that we get extended dollar weakness that will take gold back up over $1200.
Gold is real money. Everyone knows that except the Fed.
And JP MORGAN
A lot of this steams from the origins of SanMin doctrine and Sun Yat Sen. The fact that Sun has a mausoleum in Nanjing and otherwise was not culturally destroyed during the CR points to that cornerstone for Mao's Four Modernizations and the later pursuit of Gold by the Shanghai faction.
You can have all that heavy military industry guided by Deng Xiaoping's family go forth in the 1980s to wield an un-criticizable mandate for China's modernization and competition with the West, but after the profits are made where do you put your money?
UST Paper or Gold?
China is liquidating American paper for depressed physical gold domiciled in China. No other strategy is politically survivable.
The SDR and other BIS schemes hold only a continuation of China's slavery to the West.
Berf. There is an idea in there somewhere.
I'm drunk.
"China is liquidating American paper for depressed physical gold domiciled in China" China seems to be planning on a double whammy with this strategy. When interest rates, which are artificially low now, finally rise, commodities like gold skyrocket in price.
Exchanging soon-to-fail UST paper with soon-to-prosper gold. Great plan.
Good track for individuals, also.
But but the jooo money of central bankers. Or a true joo ba lee.
But but the jooo money of central bankers. Or a true joo ba lee.
Still waiting for $800/oz gold to start loading the boat (before sinking it in a lake). C'mon you no ethics bankster bastards, I hear all this talk about $800/oz gold night and day, yet here we are still stuck in the $1150 - $1200 range.
Start trading the monopoly money look alike FRN's for the Yuan.
ok. I have to call BULLSHIT on this one.
Geez.
No proof not even reasonable evidence.
"if you can't dazzle them with brilliance, baffle them with BULLSHIT."
just plain awful.
did I say Awful?
Some secret
I need to understand something:
If the Chinese in fact do have gold in storage well in excess of the supposed leader (the United States), and the United States is basically the 'IMF', why would they care so much about being invited to join, or for 'special placement' in the SDR club? If they are already creating relationships with other trading nations - essentially forming their own economic Bloc, then... Who needs the IMF...? And didn't they just snub China anyway for that upcoming SDR consideration date...?
Please enlighten --
Great point. All this supposed Chinese need for SDR inclusion doesn't jive.
When China owns $2 Trillion of US Gov't bonds... you need access to Swap markets, Bond markets, Centrally cleared settlement.
China will only move when the US is snookered.
IMF will consider China's SDR placement in September, 2016.
Currency/economic wars are fought on multiple fronts, not just one.
With a massive hoard and a massive revaluation in gold price it won't be China that rocks the world but India'
Why do you think that Ben Bernake (when Pres of Fed) called gold a "relic". These neo Bolsheviks are going to try and make gold irrelevant. They are striving for a BitCoin or otherwise replacement for gold.
You see the CDS hussy from JPM joining a BitCoin company. Virtu looking at making markets in BitCoin.
Just like "printing money" doesn't matter, gold won't matter because it is an old relic. It not progressive, it's mining and that is bad for the "environment".
We need alternative energy versus "mined" coal, oil, and Fracked Nat gas. We will also need an alternative "store of value" to gold. It's too rare and too "dirty and unhealthy " to produce.
You heard it here first.... Bitchez.
When Chia devalues, USD gets stronger and gold takes another plunge toward 900. The oprice in Yua willbe the same approx....so they don't care. They wil contnue to buy.
but but but but bitcoin?
Hey Tylers. The Perth mint thinks your earlier article is BS.
http://research.perthmint.com.au/2015/08/07/a-very-silly-thing-to-think-...
It's rebuttal time
Bron Sucheki is not good source on the fraud ridden COMEX or anything else going on in the phony paper PM's market. He reminds me a lot of Jon Nadler formerly of KITCO, and Jeff Christian of the CPM Group who act as shills and defenders of the totally corrupt Wall St bankster crowd.
Yeah well I got the link to the article from GATA who didn't challenge a word he said.
All the conspiracy theories and such by gold salespeople. But the bottom line is that the gold amount is unknown. Should the supply of gold be greater I might think that might be negative for gold, particularly if the gold has been accumulated via Chinese mines and the accumulation so far from other sources have not as of yet increased prices. Can China maintain its gold accumulation? Will they increase accumulation? Is China's gold accumulation really making a difference in prices other than lifting them to the current prices? Who knows?
What I can say is it is what it is at present... If China's economy is struggling more will China continue to accumulate or will they put their excess reserves into something else like bond buying or whatever???
The main thing to know is that many writers have theiir own agenda biased upon theiir financial income and/or investments. That's good to know when evaluating the arguments of the article...
Here are some other reasons why gold prices are so low:
http://michaelekelley.com/2015/07/20/dear-fed-plz-raise-gold-price/
http://www.zerohedge.com/news/2015-07-09/are-big-banks-using-derivatives-suppress-bullion-prices/
Here are some more signs of a coming recession.
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record...
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://www.zerohedge.com/news/2015-07-27/when-will-we-ever-learn/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
"Gold’s value has been recognized universally for hundreds of years and will continue to be recognized universally regardless of whatever market gyrations or economic or political strife the future may bring."
Gold dropped from 850 to 255. Downward for 20 years.
Since 2011, gold has dropped from 1,900 to 1,100. Gold bugs are complaining. Why is that, if gold has some universal value, regardless of market gyrations?
The stock market has always had value. It has never gone to zero. But it lost 90% in 1929-32.
1980-2015. Armstrong recently said the inflation adjusted value would be about 2,300. It is sitting at 1,100. 35 years and gold is not even up to it's 1980 inflation adjusted value. 35 years is a long time.
Is gold going to reach 2,300? Probably so, at some point. But from 1980, the DOW went from under 1,000 to 18,000 in 2015, an 18 fold increase. From 255, 4,600 would be an 18 fold increase in the price of gold. But when does it get there and what happens after it does? All bubbles burst and deflate.
All right, let's just go on the premise China has thousands of tons of Gold. Given the corruption of the government how can it be assumed they'll be any different than American politicians? Meaning when the Chinese economy is in a nose-dive they'll act to pacify the public in the short-term rather than weather the storm for a long-term solution? They're already fleeing China and buying real estate and other assets abroad with the money they've pilfered. Why wouldn't they just steal the gold and flee the country?
"Chinese officials are more than willing to manipulate markets, whether through subterfuge, deceit, or outright force."
OMG! They are imitating America.
Rise dragon rise
Rise & shine
& wipe out shitty americans & their allies
Let them wipe their V.diseased asses with dollars