Over the years I have conducted many interviews with Alasdair Macleod,
Head of Research, GoldMoney regarding gold, gold standard and China’s gold
holdings. Mr. Macleod has discussed, on numerous occasions, what he
believes could be China’s actual gold holdings.
Several years ago Alasdair developed a formula, beginning in the early
1970’s, that traces the gold market, gold leasing and gold holdings from
around the world to calculate a massive 20,000+ tons of gold that is in
question. All of Alasdair’s research concluded that China has been receiving
gold through the “back door” for the past 4 decades.
Also, we have reported, on a number of occasions, that China has a
S.A.F.E. (State Administration of Foreign Exchange) account and we believe
this account is where the “off book” gold is being held. It only makes sense
that China would hold gold in this account as it is not required to report to
any outside global gold reporting agency that gold is being stored or that
gold is being added to this account. China can simply store as much gold as
she wishes in this account and then transfer it to the “official” ledger, the
Peoples Bank of China, if need be.
Bloomberg was met by silence when they ask for a comment, about gold, from
the administrators of the SAFE account.
China has officially kept its gold holdings unchanged at 59.24 million
ounces since October 2016, or 1,843 metric tons, valuing them
at $74.1 billion at end-June. Globally, central banks continue to increase
gold reserves, albeit at a slower pace, adding 371.4 tons in 2017, according
to the World Gold Council.
The PBOC referred Bloomberg inquiries to the State Administration of
Foreign Exchange, which didn’t respond to a faxed request for comment. SAFE
manages China’s foreign exchange and gold reserves and foreign currency
assets.
The Asian nation has spent long periods before without revealing increases
in gold holdings. When the central bank announced a 57 percent jump in
reserves to 53.3 million ounces in July 2015, it was the first update in six
years. In 2009, the country said
it bought 14.6 million ounces since 2003. Source
Most nations do not publicly discuss gold. Gold is the enemy of fiat,
usury based currency that dominates most, if not all, commerce around the world.
Gold would crush this system of theft and control, so, governments, banks and
the ultra-wealthy rarely discuss gold or a gold standard which would free up
commerce and free the people from the theft of inflation.
China knows and understands gold. The nation has cherished gold for
thousands of years and it seems that is not going to change. While China is
playing nice on the global stage, it seems that President Trump is exposing
some of their shortcomings when it comes to trade. Once again, gold would not
allow trade imbalances because gold is the great equalizer. No gold, no trade
and it’s truly that simple.
Gold Giant
China is the world’s largest producer of the precious metal
Source: Metals Focus data on World Gold Council website
The country started to disclose holdings monthly after the 2015
announcement. That coincided with the adoption of
stricter International Monetary Fund norms for foreign reserves and debt data
as the government pushed for the yuan to be included in the Special Drawing
Rights basket. The IMF added the
currency in October 2016, the last month that the PBOC announced an
increase. Source
With China being a “gold giant” and mining more gold than any other
country on the planet one has to ask, where is all that mined gold being
held? China does not allow an ounce of gold, silver and other
precious items to leave the country. Which begs the question – where’s the
gold? If China mines an estimated 450 tons per annum that means the gold is
going somewhere. That would translate to approximately 37 tons per month for
the past several years. Even if we use only the chart above we see, by the
end of 2018, approximately 1,350 tons of gold that is unaccounted.
The growing trade wars between the U.S. and China, and a variety of other
nations, are making a great argument for gold to be the unit of account for
global trade settlement. Some even believe this is a great reason to
continually add a little gold to their account on an ongoing basis.
“The strategic imperative is probably still there to add some gold to
reserves quietly bit by bit,” said Philip Klapwijk, managing director of
Precious Metals Insights Ltd., a consultancy based in Hong Kong. “The reason
to own gold as a portfolio diversification is even better given the rather
strained relations with the U.S.,” said Klapwijk, who has tracked precious
metals for nearly 30 years. Source
We couldn’t agree more. Dollar cost averaging, which is what is spelled
out above, is the best way to insure your wealth is
continually protected and has the fortitude to withstand most any currency
shake up, devaluation or change that is going to happen. With currency
changes it is never a question of if, it is only a question of when.
