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Largest Ever Chinese Gold Reserve Found But There's Just One Problem
Largest Ever Chinese Gold Reserve Found But There's Just One Problem
Written by Nathan McDonald (Click for Original)
Gold is an incredibly rare, valuable and thus highly sought after asset. This is just as true today, despite what Western mainstream media would have you believe, as it has been for thousands of years.
When you pick up a solid gold bar for the first time in your life (an experience I recommend to all) you come to the true realization that "this is money". Not the phony fiat nonsense that governments around the world have manipulated the masses into saving their life's wealth; not some IOU that they tell you will "one day" have value.
The Chinese government and its people know this more than just about any other country in the world, perhaps only rivaled by Russia and India. Because of this fact, they are now the worlds largest producer of gold and one of the largest "official" holders of the yellow metal.
This connection to gold runs deep within the Chinese population and there is a strong desire to continue on with this trend. The only problem with this fact goes back to my opening paragraph, gold is rare.
Not only is gold incredibly rare, but it is becoming increasingly more difficult to find new reserves. To make matters worse, much of the easy to mine gold has already been discovered and mined, leading exploration companies to search for the king of metals in locations where the ore is becoming increasingly difficult to extract.
One such search has hit the motherload. The Shandong Provincial No. 3 Institute of Geological and Mineral Survey on Monday announced that they have discovered the largest ever Chinese gold deposit.
The only problem? It's 2000 meters undersea. This discovery which is located in Laizhou, eastern ?China’s Shandong province, is estimated to contain 470.47 tonnes of gold. This amount is truly staggering and equates to approximately $16 billion US dollars, based on current gold prices.
The magnitude of a project to acquire this gold should not be overlooked. Yes, offshore mining technology has come a long way, but the cost to achieve the end results may make the venture utterly unprofitable at current market prices.
Yet the true takeaway from this story is the fact that companies are having to venture further and further into completely undesirable locations to find new reserves and should point out the fact that eventually prices WILL make these ventures profitable.
The reality is, the world isn't creating anymore gold. As the global economy continues down this path of uncertainty there will be one asset that the world will turn to in its hour of need more than any other- the king of metals, gold.
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I like the way you think! Creative, devious and underhanded (or in this case under-sea'd).
You make a good point. Also very clever.
To your thesis, the larger point is that everybody is running around screaming that gold goes down as the Chinese are massive buyers of pyhsical gold. But are they? As I've stated many times, one of the most closely guarded / top secret things that all central banks hold onto is their gold holdings/buys/sells. Good luck getting a even remotely accurate picture of what they do.
Interesting that we tend to think about extraction costs having a bearing on if they do or do not extract for refinement from a purely capitalist perspective. Does it really matter to China what the "costs" are in human or monetary senses? I am inclined to say I don't think so since nothing they do has a "western" business model the way we are used to seeing. 400 tons is 400 tons of physical. I'd wager they will extract it because of the tempting opportunity for graft and corruption with the added bonus of keeping labor from sitting around. Idle hands make idle minds and all that. Make the Chairman most proud!
Help ease the economic crunch and put a lot of people to work building something other than empty shopping malls. Hmmm. Good angle.
I wonder how they found the gold.
Underwater metal detector. Sometimes where there is a natural sluse you can find gold in the rocks underwater with a metal detector.
Underwater metal detector. Sometimes where there is a natural sluse you can find gold in the rocks underwater with a metal detector.
we've just received word that a floatilla of canoes have overturned in the south china sea, we are awaiting confirmation.......
correction the east china sea.
Correction, Bohai Sea.
the world isn't destroying any gold either
Except for nuclear reactions (mass -> energy and leaves the earth), nothing is destroyed. Gold is being used for electrical contacts and it is almost impossible to get back a real percentage of what is used, thus it is not being destroyed but it is made unavailable. Silver, more so.
THIS IS EXACTLY WHY THE NOTION OF A "GOLD STANDARD" ECONOMY IS BULLSHIT.
So, the Chinese find over 400 TONS of gold. They want to extract it and add it to the global inventory that would underpin this supposed "gold standard" economy. Umm anyone ever hear the word DEFLATIONARY or EXOGENOUS SHOCK?
Gold is bullshit eight days a week. Twice on Sunday.
Without any info as to the grade this doesnt mean anything. There is gold all over the place but most of it stays in the ground as the grade is too low to warrant pulling it out and refining it.
And what's wrong with deflation? Your money buying more than the previoius year is just so terrible apparently. This notion that inflation is good for people is what boggles my mind. I guess if you have speculated with debt and leveraged up to the moon it can be considered good, but to most people its just bad.
Every once in awhile I find a comment so utterly stupid and devoid of thought that I can't contain myself. Such is the alphahammer drool.
If in fact, they have it, could get to it, and could recover ore bearing rock and float it up from over a mile down at some price point below 5000 an oz....adding 400 tons of gold wouldn't do shit in terms of a global gold standard or ridiculous debt levels. 16 billion? Fuck. In a world swimming in 100s of trillions worth of debt? It would pay off one years worth of US deficit spending. Whoopee.
The entire deposit wouldn't even cover 10% of the outstanding American student debt at current fiat asswipe levels.. The discovery is really pretty insignificant. Take a math class hammer.
Hey Einstein, if you had been paying attention, you would have been able to get a clue. But since you didn't, let me provide reality for your edification.
You are correct. 400 tons of gold means jack shit. What IS important is that next time it may be 40,000 tons. You/me/we have no way of knowing. The larger point is there is NO way to create an economic system underpinned on something without a basis of understanding.
If what was in your wallet was levered to the price of gold, then suddenly a shit ton more of gold was added to the supply underpinning this gold based economy -- then your wallet would be instantly lighter.
This gold based economic system creates what is called perverse incentive. If the world was usuing a gold based system -- then the incentive would be for everybody and their brother to go out and find as much fucking gold as humanly possible. And when they do, and make no mistake they will -- ighter wallet...
Take an economics class lunatic.
Let's look at the 40,000 Tons from a physical-chemical probability view. The center of the core has a zillion psi pressure but zero gravity, swirling therefore mixed. It separated from other metals relatively cooler temperatures and in the crust where the density would be the biggest difference. Gold is 1206 lb per cubic foot and steel is about 480, I think.
Without getting into equilibrium discussions over my simple brain, I figure the most gold will be deposited relatively close to the surface, certainly not in the core, since it isn't magnetic. I suspect in my pea brain that the gold under the sea floor might be due to being dragged there by tectonics.
Having said all of that I don't know shit. From the little I know, the noble gases and metals appear to be somewhat rare as compared to the common stuff, I think.
My guess is that the 40,000 Tons magically appearing is not the way to bet it.
More like 2 months deficit spending and 2% of student debt.
http://www.whatamimissinghere.com/wp-content/uploads/2012/03/Inflation-i...
Spot our domestic gold rush please. a mere blip on the radar.
Except in places where inflation for food, shelter and clothing is ever increasing; Brazil and Venezuela comes to mind...bet they wish they had all their savings in gold or silver and not their own currency. That is coming to a nation near you.
"bet they wish they had all their savings in gold or silver and not their own currency"
Sure. Maybe better than their own currencies. Maybe. but it still drove off a cliff and shit itself. They would find no comfort in diversifying "all their savings" into gold. Don't beleive that? pull up a chart...
Another comment from the huge majority that LOVES to buy high, sell low. Brilliant advice, Sherlock.
And let's ignore the hyper-manipulation and 300:1 paper:physical fraud too, right? And endless re-re-re-re-re-hypothecation.
That hammer isn't trying to persuade anyone other than himself, having lied to himself for so long. He's still hoping he's right so is throwing shit against the ZH wall, HOPING something will stick. He will succumb to his better judgment eventually but not without an internal fight. That brand of people become the most adamant salesman for what he once eschewed.
"There is no fanatic like a REFORMED fanatic"!!!!!
Yeah, I agree.
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I do feel bad for some people who bought gold and/or silver in the past. For those who still receive more fiat income than they spend, lower PM prices the past 4 years are BENEFICIAL... because they can accumulate more and bargain prices.
However, some folks who purchased at various times over the past 15 years or more have gotten to a point in their lives (or into a situation) where they need to convert their savings into real, physical goods and/or goodies they want to consume. Or maybe they encountered some productive opportunity to pursue.
Those folks are presently HARMED or SCREWED by the current grossly manipulated prices, especially if they bought near the top in 2011. For those folks, I feel sad, and angry at the manipulators.
To be honest everything could be used as money, at the same time. Either physical assets in any shape or papers documenting their ownership and ious backed by promises.
Thus Coinage minted in pure PM's are backed by labours, value added and stored.
Through testing, purity can be ascertained.
Can not be manufactered or copied. Unlike Paper which is Backed by DEBT. Over Loans, which competed in the
"Great Gamble". Thats when the Majority of us became SerfGoydom
People in Positions of Trust were Not. That was the start of something Bad......Cause it's still Growing.
The rate of creation of Gold has been fairly standard for a long while. At least when compared to the creation of Fiat paper. Technology improvements have resulted in finding more gold as the easy gold is found and put into the system.
Paper gold does not enter in this discussion.
I believe that a basket of currencies, which I think will be what they try to do next, will only share the central bankster benefit of money printing to more countries. They will not willingly go to anything other than faith based uless they are given no other option, maybe not even then.
The issues are not fiat or gold; it is corruption, deceit and lies that are bound up in the human DNA and not one of us has not done it. Bankers just do it on a grander scale because they can.
Tell us more about yourself.
I bet they find a home for everything they dig and refine - there's no unwanted gold in the world.
I've heard of EXOGENOUS SHOCK. It's an economic shock unexpected by dumbass Kensians, but predicted by sound money Austrians.
that's why a better solution is a basket of currencies and commodities; and no, I'm not refering to an IMF SDR
Silver and gold for my currencies please. When modern day fiat explodes its all going down together.
Except it doesn't come out of the ground for free, or 400 tonnes at a time.
Nor does it materialize at the whim of a bureacrat, like USD.
Yea but it gets taken out of the ground. Its Heisenberg's Uncertainty Principle. Once its found its already effecting markets. In this case, to the downside.
Suppose that the next find is 40,000 tons? What if a university lab develops some remote sensing apparatus that can peer through the Earth and find gold. They try it out and Voila they find a deposit of 40,000 tons and its easy to get to. And luckily its on one guys property in Texas.
Gee, would that have any impact on the global economic sysytem underpinned on gold? Its called dire systemic risk and potential collapse due to exogenous shock.
A guy wins the lottery.
How does that effect the money in your wallet?
Hint: It doesnt
'Its called dire systemic risk and potential collapse due to exogenous shock. '
Are we talking Q.E. here ?
Wrong, the owners would go to Amsterdam and learn to cartelize it like diamonds.
Am just now putting the finishing touches on my machine to teleport ancient Incan gold. Recommend everyone short Au first thing in the morning. You've been warned.............
So......What if......
HAARP triangulated pulses and mapped the EARTH? Now America knows and invests Worldwide for all major deposits.
Waste and Competition. Market Share.......Then Production Drops, as supplies dry up.
Now Shares on the Oil Majors will become Overbought........Along with Ma and Pa's Jackleg.."Regular" keeps going.
Who Really Knows What?
Jimmy Carter and a handful of European leaders decided to dump thousands of tons of gold on the market to depress prices and what happened? The price skyrocketed.
Ah, but here's the flaw in your argument: we already know how much gold there is in the Earth's crust, sum total, based on its occurrence and proportion to other elements, so practically speaking, this "discovery" should already be priced in. Except it isn't about discovery, it is about cost-effective recoverability, which is expensive for the gold in this article.
Just remember:
.005 parts per million
"Ah, but here's the flaw in your argument: we already know how much gold there is in the Earth's crust, sum total"
We don't actually know how much gold is in the Earths crust. We speculate but thats it. Remember, we can't even agree on how old the Earth is -- and that peak oil was widely panned as a 100% geological reality that turned out to be incorrect.
You are right. There is no way to know exactly. For me the point is that gold has been a store of value since the Pharoh's were buried in their tombs. Every fiat system in history, EVERY one, has ended the same way: printed to worthlessness. So holding gold is a risk, holding FRN's is a risk orders-of-magnitude larger. You and I both know FRN's will collapse - we just don't know when. You might assume you'll have time to get out of FRN's when that happens - and you might - put would it not make sense to have 5% of your savings in precious metals outside the banking system in case the balloon goes up rapidly?
Ifs, ands or buts. If frogs had wings they could fly. Seems like you are engaging in what the main stream media does to create controversy where there is none. "But what do you think the result would be if x,y, or z happened." Its called blowing smoke up your ass. Trying to scare people when there is no present danger or reasonable expectation.
y = e-x Only approaches zero as x goes to infinity, but it never equals zero.
Wow...you're really stupid. Where did you get your PhD? Princeton?
Its a matter of odds. Gold has been very valuable for, basically, ever. The incentive has been there for just as long to turn lead into gold, and so forth. That is why there has been technological improvement in gold extraction. That it is still as difficult as it is tells you all you need to know. Contrast that with the alternatives, including the statist alternative of choice called fiat. Every time, fiat eventually crashes and burns. Do you prefer to bet that this time will be different?
Yea but you're applying a human belief system onto gold as if were some sort empirical fact. Who sets the price of gold? Its man. God (insert your favorite here) himself doesn't shout down from the heavens "Hear me. Gold will be $1,500 USD to the ounce so says God!"
All stores of value that man traffics in are simple to complex belief systems. Everything. Gold is no exception.
it's only 470 tonnes of gold...China mines more than that each year as the world's largest miner of gold. This gold would take them probably many years or decades to get to. So it would only add a little more to China's yearly sum of gold that they already mine.
Also...from all accounts that I've heard of many years now...no Chinese gold leaves the country. All their own mined gold stays in their possession. And most of the rest of the world's phyzz gold over the last several years has been either going to China, India, or Russia.
So in relative terms, that gold would not affect the rest of the world supply of traded gold anyway. And there are still many other countries combined around the world who will continue to mine what they can.
That gold valued against the massive amounts of printed fiat, digital fiat, and 1.5 Quadrillion in other debt and derivatives would be worth 50,000 dollars an ounce today if the reset occurred and the revaluation happened properly.
It won't...but just sayin'.
It should not be our concern how much gold China mines right now. It should be our concern how much of the rest of the world's gold is being locked up in China forever. Cuz he who owns the most gold will one day again make the fucking rules.
Our concern should be with our own personal stacking of what gold and mainly also silver phyzz that we can get.
The fiat value of those metals is not going to matter. We have to stop thinking about PM's in terms of any kind of fiat what-so-ever. We have to start thinking about what other physical assets a certain amount of physical gold or silver can be traded for. Because PM's are the only true and real money in the world.
So if China ends up ultimately having 30,000 tonnes right now of above ground phyzz gold on their hands while most of the rest of the countries and people of world don't have anything close to that, then we have to start thinking about what China could buy with that much gold. 400 Tonnes might one day buy them Alaska for all we know. Or maybe it would buy them Hawaii.
Crazy shit like that has happened in the past.
So we have to think about what our personal stacks of phyzz will one day get us. It has been said quite a few times by others that one day a monster box of ASE's could get you a penthouse in NYC if you actually wanted to trade for one.
I'd use mine for lots of land. Hopefully I don't trade my phyzz in for lotsa land one day and then the Chinese buy my entire state w/ some amount of their own gold! haha Man, that would really suck. ;-)
OK! Everybody quit your arguing!
Lwt's just ask somebody impartial.
Like the Anunnaki