China's Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In London
Back in June 2013, when Deutsche Bank opened a gold vault in Singapore which could hold up to 200 metric tons, the German bank was euphoric about the prospects for storing physical gold: "Gold has traditionally been stored in London, Zurich and New York, but there is a serious shift in dynamics going on as the global financial crisis continues to evolve," Mark Smallwood, Deutsche Asset & Wealth Management's head of wealth planning in the Asia-Pacific region, told The Wall Street Journal.
This is what the outside, and inside, of the state of the art Singapore vault looked like:
Mark was correct and thanks to the ongoing decline in gold prices, Chinese and Indian demand for the metal, the physical metal that is, not its various paper manifestations, has risen to record levels. Alas, one thing Mark did not know is that in early 2014, a German regulator would reveal that "precious metals manipulation was worse than the Libor scandal" and as a result the largest German bank (and largest bank in the world by notional derivative exposure) - which has been probed and found guilty for rigging virtually every market, including gold - would quietly liquidate its entire physical precious metals trading group.
Which meant that Deutsche Bank's Singapore gold vaul, was about to be sold.
But while the sale of DB's Singapore gold vault was to be expected with China's ravenous apetite for warehousing physical gold around the Pacific Rim, what may have escape popular attention is that Deutsche Bank's even more massive, and even newer, gold vault in London was also "on the block" as of December 2014 when we reported that Deutsche Bank is "open to offers for its London-based gold vault following the closure of its physical precious metals business." As Reuters noted: "If the right offer came along, then the bank would sell the London vault," one source close to the situation said.
Most curiously, the bank's London gold vault only became operational in June of 2014, more than two years after launching the project. It can store some 1,500 tonnes of gold and was built and managed by British security services company G4S.
As Reuters further noted, with other banks withdrawing from the commodities business to cut costs and reduce their regulatory burden, it might be difficult for Deutsche Bank to find buyers amongst its nearest peers. However, one possible buyer is general LBMA-member, Chinese bank ICBC, which we said at the end of 2014, was trying to build a presence in London.
In any case, the list of potential buyers for DB's brand new vault lease remained a mystery, and perhaps our revelation of the exact location of this vault, something potential buyers tend not to appreciate especially when said vault will house up to 1,500 tons of gold, or over $50 billion worth of "inventory", may have dissuaded some. As a reminder, the "secret" location of the Deutsche Bank vault, which as revealed in the G4S building application, is located in the Park Royal complex, and specifically at the 291 Abbey Road, London NW10 7SA location.
As it turns out, one persistent buyer failed to be dissuaded.
According to Reuters, as was rumored one year ago, China's largest bank - and in fact the world's largest bank - by assets, ICBC Standard Bank, is buying the lease on Deutsche Bank's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies told Reuters.
China's ICBC, which took a controlling stake in Standard Bank's London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.
From Reuters:
The Chinese and South African lender is aiming to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden. "They (ICBC Standard Bank) have taken on the lease for the vault," the first source said.
Currently, five banks - JP Morgan, HSBC, Bank of Nova Scotia, Barclays and UBS - settle daily bullion transactions between dealers, amounting to more than $5 trillion worth of metal each year in the London over-the-counter market.
These banks are shareholders of the London Precious Metals Clearing (LPMCL) company. They will decide whether to accept or reject ICBC Standard Bank's application within the next few months. The LPMCL declined to comment.
"They are applying for clearing membership at the moment, but that's still subject to a vote, which has not taken place yet," the source said.
Should the vote go in its favor, ICBC will be ready with what may be one of the largest gold vaults in London, if not the world, to park local gold which will then be promptly shipped over to the mainland to be dealt with as seen fit. Unless, of course, the vault is there for the reverse migration: to house quietly escaping Chinese gold as part of the local oligarchy's attempts to circumvent China's capital controls, a task so far accomplished relatively painless with bitcoin.
Only time will tell.
What is perhaps most surprising is how cheaply ICBC acquired the massive gold vault: "The figure that was initially talked about may have been around $4 million, but it's way lower now," a second source said, without disclosing the figure paid for the vault.
So what does "way less" than $4 million buy you nowadays? Here is the answer, courtesy of Google Maps:
Finally, for those curious, here is precisely where the brand new gold vault of the world's biggest bank will be located.
(17 votes)
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Are those solar panels on top of the vault?
On a cloudy day the vault fails to close....
Solar power uses batteries. Probably not enviro friendly to talk about how green electricity actually works.
These gold vaults must be holding more than gold...
Many online sources give essentially the same value for the total stocks of above-ground gold; it was about 157,000 metric tons by 2007. If the density of gold is 19.3 grams per milliliter, or 0.0193 tons per liter, then we need to divide the total number by the density (remember the density formula from school? It’s Density = Mass/Volume, so just flip it around). Thus we get about 8.2 million liters of gold. If an Olympic-sized swimming pool has a volume of 2.5 million liters, then we divide and get our answer.
So we would need 3.27 swimming pools to hold the entire global supply of gold, which some argue is the entire amount of gold mined since before the Egyptians began mining gold before 2000 BC.
http://www.forbes.com/sites/afontevecchia/2010/11/19/how-many-olympic-si...
now how are we to swim if you fill the pools with friggin gold?
Air space between bars will increase that area.
Although if it were melted and poured into one single area, or very large bar, then no one could walk or drive off with it.
"These gold vaults must be holding more than gold..."
Tungsten?
. So what does "way less" than $4 million buy you nowadays?
Does it really buy that facility? If they're buying a lease (i.e. the leasehold interest) they only have the right to use that facility and the lessor gets the improvements back at the end of the lease term. As to whether that's a good deal, it depends on whether the term is closer to nine months or 99 years.
It's a local repository for every last grain of the round-eyes metal.
Later, when they are trading and collateralizing and taking over the west with it, that location will be very convenient. Didn't they buy JPM's vault facility in NY last year?
Our bankers are handing them our financial balls, and apparently happy to do so.
The Chinese own JP Morgues HQ in New York that has an underground tunnel leading to the FED's trading desk. The Chinese bought it for about 60 cents on the dollar, which implies that the Chinese had something over JP Morgue...perhaps a default or something.
http://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-vault-larges...
"Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault."
"And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the "world's largest bank vault."- end
And from Bloomberg: http://www.bloomberg.com/news/articles/2013-10-18/jpmorgan-selling-chase...
The Chinese now have one of the largest vaults in North America and direct access to the FED.
Does JP Morgan own the adjoining buildings?
I guess if every Country stores it's gold in other Countries, they will never nuke that Country. London will be safe from "Chinese" nuking. BFF!!!
Chinese Vaults in New York, Shanghai and London. The sun will hardly ever set on the Chinese Gold Vaults or their ability to trade when any major market is open.
Feeling like the final pieces are falling into place...
"The sun never sets on the Han Gold Empire!"
Dumb Chinese, highly intelligent and technologically proficient Americans hold their paper gold contracts on the cloud servers - for FREEEE!~!!
First JPM's vault. Now this.
I smell gold confiscation coming to China.
At least it probably has some gold in it. The only thing in Fort Knox is what's left of Jimmy Hoffa's decomposing body.
Ok you climb the dumpster beside the supermarket, then climb onto the roof of the supermarket. then jump across to the gold storage building. Next cut a hole in the roof, use a rope to go down and Bob's your uncle.
Record demand. Low prices. Well, I guess even us little guys should take advantage of the fraud while it lasts.
"Ah, John,, Miss Lindsey, you're back from your secret mission."
"(groveling) "yes, boss. We checked out Fort Knox. Almost got caught. It was a good thing one of the guards was a tranny, Lindsey distracted him while I went in."
"Well?"
"Looks like it's all there, but look at my Tricorder analysis."
"Damn! Tungsten! We have a shipment going to Xi on Monday. What are we gonna do? Lindsey, quick licking my leg."
"But I love your taste, Bath House!"
"Later, Lindsey!"
"I suggest we rob the Mint. They have assayed stuff there."
"Make it so, John. Assemble your team. I've got Treasury Notes coming out the ASS!"
Does that make you a manipulator? Count your gains and not your losses - buy.
When the Wong's bought it .... did it come pre-stocked with 1,500 tons of German Gold too?.
It's not a gold vault.
It's a siphon.
Sure these guys will play the paper gold thing, but the real political careers hinge on physically transferring US and European gold to China shores.
Every China banker under the age of 40 worth a damn gets a woody thinking about punishing the West for the Opium Wars and another 100 years of humiliation.
Engagement.
It's what's going to eat your G_d damned dinner.
"Herro, Bank of Engran?"
"Yes?"
"Xi here. We need another vault. Stolage lun out here in China."
"Well, Old Boy, since our Gold is almost all yours now, why don't we throw in a nifty vault we have open?"
"Fine. I send Finance Minister to take rook Monday."
velly funy ;-)
14ftx14ftx14ft cube is 1500 tons of gold. Don't need a massive vault.
You are forgetting about all the Tungsten bars, they need a home, too!
Lets see now.....
density of gold is 19.32 times that of water so 0.1m x 0.1m x 0.1m of water, more commonly known as a litre, is 1Kg.
The same volume of gold is 19.32Kg.
200 tonnes of gold is 200,000 kilos. Each kilo has a volume of 0.0000517598 metres cubed so 200,000 times that is 10.352 metres cubed. There are 35.3147 cf in a metre cubed so the vole of 200,000 kilos of gold in cf is 365.58.
Not very big at all really, the volume ofa decent sized closet.
Squid
By way of reminder, the Chinese bought 1 Chase Plaza, JP Moran's HQ for a deep discount with direct acess to the FED and the largest gold vault in North America.
http://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-vault-larges...
"Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault."
"And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the "world's largest bank vault."- end
And from Bloomberg: http://www.bloomberg.com/news/articles/2013-10-18/jpmorgan-selling-chase...
The Chinese now have one of the largest vaults in North America and direct access to the FED.
No wonder why prince Charles had the Chinese over for dinner late last year and of course that's why the British asked the Chinese to build their new nuclear power station ... ooh my God! They don't want to force the Chinese just like the Syrians to invade Europe do they?
In crisis (war) UK will simply impound the entire stuff
in the name of enemy property