“Sorry, No Gold Today… We Sent It to China”
He also says that these “bullion bank” intermediaries are probably turning around and selling their gold to China.
China, by the way, is the mostly likely catalyst to set off the “zero hour” scenario we told you about on Friday…
We’ve chronicled China’s ongoing gold grab here at Agora Financial — going all the way back to April 24, 2009, when the People’s Bank of China announced its gold reserves had grown to 1,054 tonnes — up from 600 in 2003. And that’s the last official word.
Then there’s private-sector demand in China. The government is equally opaque on this score. But we do get regular figures on Chinese imports via Hong Kong. Last year, they totaled a staggering 834.5 tonnes. And remember, that’s in a market that produces only 3,700 tonnes a year!
Couple those imports with Chinese mine production — and the total amount of gold known to be inside China has doubled in a mere three years.
- China’s gold reserve is “too small,” says the Department of International Economic Affairs of Ministry
- “No asset is safe now,” says the head of the People’s Bank of China’s research bureau. “The only choice to hedge risks is to hold hard currency — gold”
- And maybe most telling for our purposes: “The U.S. and Europe have always suppressed the rising price of gold,” according to a commentary in the Shijie Xinwenbao newspaper, duly noted by U.S. diplomats in cables exposed by WikiLeaks.
Echoing a theme we first wrote about in The Demise of the Dollar (John Wiley & Sons, 2005), “suppressing the price of gold,” the article went on, “is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries toward reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the renminbi.”
The plot thickens: Continue Reading…
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