Canary in the Coal Mine for Silver Manipulation? PBOC Advisor Recommends China Add Silver to Official Reserves

A prominent PBOC Advisor has stated that US Treasuries are not safe in the medium to long term, and has recommended China increase it’s gold reserves as well as add silver to it’s official reserves.

If confirmed, this is a potential game changer for silver that is so monumental it could literally blast silver from the upper $20′s through it’s all-time nominal high near $50 and closer to 3 figure range OVERNIGHT.

Where China to reduce it’s US Treasury holdings by $200 billion and plow the proceeds into physical gold and silver bullion as Xia recommends, you can kiss the cartel’s silver manipulation goodbye!

Even if 90% of the funds ($180 billion) were allocated to gold and a mere 10% ($20 billion) to silver, at today’s market prices that equals nearly 2 years of global silver mine supply of around 750 million ounces.

It doesn’t take an economics degree from Princeton to realize that should China attempt to add silver to it’s currency reserves, the price of physical silver will become logarithmiclly disorderly to the upside OVERNIGHT!

A former central banker claimed that US Treasuries were not safe in the medium to long term. In addition, China will launch a new investment fund that will invest parts of the more than USD 3,000 in currency reserves in energy and precious metals. PBoC advisor Xia recommends holding only USD 1,000bn in currency reserves, with the rest to be earmarked for strategic investments. He goes on to suggest a gradual increase in gold reserves and recommends pursuing a “buy the dip” strategy over an extended period of time. He also advises PBoC to add silver to the official reserves.

At the same time, an official of the Chinese Chamber of Commerce said China should step up its gold reserves to as much as 8,000 tonnes. Ji Xianonan, head of the Chinese State Council´s State-Owned Enterprise Supervisory Board, has recently suggested that China ramp up its gold reserves within the next three to five years to 6,000 tonnes. Within ten year´s time, China would want to own 10,000 tonnes of gold. This means that China would have to buy almost 40% of annual production until 2020. The significance of such statements can hardly be overestimated. Experience shows that they tend to be accorded with the government and party leaders.

According to the statistics of the World Gold Council, the Chinese central bank did not make any purchases in 2010 or 2011. Official reserves were last reported in June 2009 at 1,054 tonnes. The gold imports from Hong Kong amounted to more than 100 tonnes in April alone; in the year to date, 240 tonnes of gold have been imported. There is a clear upward trend in place: between May 2010 and April 2011 China imported 66 tonnes, and a year later imports were at 489 tonnes – an increase of 640%99. In total, imports in 2011 amounted to 427 tonnes (as compared to 118 tonnes in 2010). We expect not only Chinese private investors but also the PBoC to continue stepping up their accumulation of gold reserves massively. We believe that China holds definitely a far higher volume of gold reserves than the officially confirmed 1,054 tonnes.

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We have heard reports from Andrew Maguire that a tiny 10 million ounce physical silver order in London took several weeks to be filled, and when the order finally arrived it had clearly been sourced from the SLV.
Anyone believe that the SLV holds enough physical silver to satisfy demand for silver as a CURRENCY RESERVE FROM CHINA!?!

Comments

  1. Isn’t there a minimum share balance you have to have with SLV in order to ask for delivery?  Well, they (Chinese) better get their Silver before it’s gone!  Yar Hoo

    P.S.
    Watch out for this guy… http://thefundamentalview.blogspot.com/2012/06/silver-short-initated-using-slv.html

    He just recently lost his shorts, betting in shorts on SLV. Found in search engine just now. Not good advice there.

  2. I want to believe but I will believe it when I see it.

  3. Remember the fictional character Wynter Benton that was leaking manipulation secrets and timing of the cartel dumps back in 2011?  One thing they predicted was a major country was on the verge of announcing a silver backed currency which would propel the metal to all time highs.  Late 2011 the fictional character Wynter Benton vanished never to be heard from again.
    Everyone thought this silver backed currency would either be Mexico or China.  When this didn’t happen everyone slammed Wynter stating they were a hoax.  Maybe Wynter Benton wasn’t too far off just the usual market forces at work were causing delays? 
    Could this be the event Wynter Benton forecasted back in 2011 before vanishing from public forums?

  4. This would be liberating but I want to buy more physical though before the ascent. Seems I may not get a chance..

  5. WB vanished with MFG. It was a win – win for Jamie and Blythe.

  6. If  i remember righti, this was the same guy that proposed China should be diverting to gold en Masse, a few years ago. It sure seems he’s got some influence down there.

  7. Frankly, I think China is already stockpiling silver.  They stockpile most important commodities, right?  They’re probably doing it with silver as well — just up to the point below where their rate of buying would send prices rocketing higher, which we know for a fact is exactly what they’ve been doing as a gold buyer.  If my memory serves me correctly, when they announced their surprise 400 ton addition of gold to the PBOC reserve stack a couple of years ago, it was associated with a transfer from their sovereign wealth fund.  My guess is that they already have a modest clandestine silver buying program going on with their sovereign wealth fund.

    I also think some of the Honk Kong gold import flow is making it’s way to the PBOC too. 

    China is also getting more aggressive with mining company acquisitions.  Witness this latest news on Barrick Africa as but one example.

    If the US wasn’t run by criminals that find profiting from destruction more lucrative than serving the nation’s best interests, we’d see the US Treasury Dept.  re-monetizing gold at $40,000/oz or whatever, renegotiating the national debt and entitlement programs (sure, not easy, but…), moving back to a modified gold standard and putting an end to this retarded sleepwalking strategy that our policy makers embody as China slowly accumulates the wealth of the West.  I can dream, right?

    • Very good points WOMBAT. Mike Maloney made a video about a year or two ago. In his video he showed us that gold should be valued at about 58,000 per oz vs the amount of dollars printed, compared to the gold vs paper ratio in 1980. That number was based on the the high mark for gold back then however. As far as silver, IT HAS NO UPPER LIMIT! No one knows what silvers’ true & fair market value is. It could go to it’s historical ratio with gold. It could reach parity with gold for awhile, then come back down. It could reach parity with gold and then surpass it and never look back again! My preference is of course the latter, lol.

  8. No need to centrally back a currency with silver. Just make the currency’s main coins and smaller bills in silver. Like we all used to. If you put the silver back into the literal back pockets of humanity, see how much that would change.
    Silver was very stable when it was stored in coins.
    This time, just don’t put a paper value on the face, just leave it at the grams. Kills inflation.

    • I prefer silver to do both! It should be money. It could back a currency and be minted into coins. I can see a day when a thin dime buys a car! The silver coin with out the face value is exactly what Hugo Salinas Price has been proposing as a solution for Greese.

  9. Could use narrow silver strips in bills or just make $5, $10, and $20 silver coins.

  10. Well lets pray with deep faith that China will make Silver Soar stratospheric! An attempt to be sophisticated with the financial underworld has come back to roost. China is now making moves or has been making moves against the United States. To drop purchasing U.S. counterfeit debt and purchase precious metals is brilliant. Why hold onto something you know is worthless and yet buy something that preserves it’s value. 

    Still remains to be seen though. Once this day comes and go upwards and skyrockets…We will know that the game has been officially put on the U.S. for all to see. India and China are buying oil in Gold and opting using the U.S. Dollar as a world reserve currency. This is dangerous for us all. Even if you have metals to back you up. Still normal people will turn scavengers to survive and it is written on the wall. 

    We shall see..Suggestion would be to make arrangements to live elsewhere.. 

  11. I’m no-one’s economics specialist, but I’ve been joking for years that when The US’s use of buy-crazy customer has has run out, China will employ the whole lot as cheap (albeit kinda lazy) workers. Let the exchange rates shift, and one Yuan will buy a lot of US labor time. 2nd and 1st world to swap places.

  12. Well, we’ve been listening from various “silver gurus” and whistleblowers etc. that silver is on a verge of a breakout, it’s imminent, any day now, one of these days, a matter of weeks if not days,… blah blah blah. But since May 1st 2011 the price of silver has almost halved of what it was. Silver is slovely sinking month by month. If not, it’s traveling sideways. The realitiy tought me not to believe such bedtime stories as this one. I’ll believe when I see it, no sooner than that! Anyone who bought silver early 2011 was a victim of pumpers’n dumpers. I am one of them, obviously.
    p.s.
    At the moment I am writing this, silver is sinking heavily. No sign of Chinese yet, unfortunately…

    • LexLuthor,
      Trading patterns in the PM sector changed going into August.  The “sinking month by month” game ended after many months of multiple testing of the (roughly) $26 level in silver and low $1500 area in gold.  I’ve been talking about this on SilverDoctors in real-time, as it unfolded.  Click here and follow the message link back through time for examples.
      Time will tell, but there’s more going on here than just “blah blah blah.”  :-)

  13. Mary B  That is a good point.  With nanotechnology currency made of some sort of nearly indestructible plastic and nanosilver embedded in it,  this currency  would have a specified amount of silver and a specific and well recognized value re the goods it could purchase.  China will acquire about 1,250 tons of silver on the market this year and will India.

  14. The raids are getting smaller and shorter lived. They are losing their grip people! If China chimes in on silver, we’ll be dancin’ in the streets and J.P. can go J**P in a lake………
     
    Hi ho Silver….away!

  15. P.S.
    China has been embracing silver for three or four years now and suggesting the citizens buy silver for financial protection….


  16. I would not get too giddy about this.  Ted B.  in the past says he believes China is behind JPMs big short position.  Why I do not know.  However they are extremely shrewd.  So maybe it is for cheap accumulation?

    • It took Ted two decades to come to terms with the fact that the US government manipulates silver.  Don’t get me wrong.  I love Ted’s work and no one on earth has done more to document the manipulation case of silver than Ted.  He’s a great guy.  But he’s not a god, and as far as his understanding of geopolitics and politics is concerned, he’s a rank amatuer.  China has little to gain from shorting silver.  Ted has never been able to make a strong case for his China short thesis.

  17. SD reader @427 has pointed out that Advisor Xia began making this recommendation in July of 2011.  At this point the Chinese could be even closer to remonetizing silver (officially adding silver to its ForEx reserves) than we imagined.
    http://oilprice.com/Finance/the-Markets/China-On-Its-Way-To-The-Leading-Global-Currency.html

    -Doc

  18. Doc I believe this has been China’s plan all along.  They work both sides.  They help short the market to keep gold / silver down via paper derivatives then continue to buy the physical metal in large amounts.
    I’ve posted before on SD that keeping gold / silver prices down via paper derivatives is a win – win for China as they continue to buy gold rich properties plus the physical metals.
    As the story goes, just follow the money or in this case the big accumulators.  They’re the ones with the most to win at this point.   
     

    • The problem with the “they work both sides” theory is that it takes an order of magnitude more selling in the paper markets to push down the price of physical silver markets.  We can see real, documented examples of this when looking at actual COMEX raids, where the paper equivalent of world annual mine supply — and sometimes more — is sold in the timeframe of minutes to hours to affect a mere dollar or two dive in paper silver price.  Unless China is able to naked short, simple logic tells us that that would be a rather counterproductive and expensive way to go about trying to maintain discounted physical prices.  It would be like someone coming to you and saying you should sell 100 ounces of paper silver to push the price down such that you could buy one ounce of physical at a piddly discount, while simultaneously having the real-world liability of the short position hanging over your head.
       
      Sorry.  Until such time as someone — Ted or otherwise — actually spells out in detail the mechanics of the “China is behind the silver short” theory, all I can do is scratch my head.  The theory doesn’t make sense for a wide variety of reasons above and beyond what I note above.

  19. There is an article out there I seen 5 months ago. The head of the IMF said that China is working with them on what they need to have a world reserve. She stated a few things were not quite up to par yet and what they still needed to accomplish. There not far from this at all 

  20. China is at war with us.   Soft war now but our body count is getting high as people in the USA are closer to civil unrest, food shortages,  poverty and desperation. Have you hear about the quiet riots taking place in formerly peaceful cities like Seattle?  This should come as no suprise now that the various 3 Letter federal agencies have bought 1 billion rounds of hollow point ammo. They have a genuine fear of angry citizens looking for a place to vent their wrath.  That’s  enough for a double tap and one head shot.  ISYN!.
     15% of the US population is in poverty—22% unemployed— 50% of our citizens file tax returns with no payments to the government—45 million on food stamps.  That’s  bad place to be in. While government is nothing if not an insatiable black hole of monetary wants and needs, the people must come first and without constant government interference. We need to become much more self reliant.
    Sorry to be so graphic but our country’s leaders understand that the Chinese are way ahead of us as far as fiscal solvency and economic growth.They may have their own rough patches but they know how to handle it. Our leaders will do nothing to counter the Chinese juggernaut.  They can’t because they are part and parcel the problem that we are in now. They created it.  They are part of the present day paradigm and must sustain it by any means possible.  Our GDP is shrinking in nominal terms and cratering in inflation adjusted terms.  California is going the way of Greece and 12 months from now it is be unrecognizable as the once Golden State.  The Chinese, with their century and even millenium- long view of things can just wait for us to implode and take over without firing a shot.
    When we talk about fiscal crises, California is  closest geographically to China so it will be the first sally port for Chinese influence, both monetarily and economically.  When CA defaults the Chinese will be there to help, slowly at first to get a toehold in the state and then with vigor as Chinese move to the state to take over industries, governmental positions and residences.  I know of this from their inroads to the CA banking community.   In Canada one of the largest cities on the Canadian west coast is now nicknamed HongKongcouver.  Yes, that was Vancouver but not now. It is a financial, economic and political colony of Hong Kong/China.  Nice job if you can get it. The colonial model is now well established. The Canadians welcome the people and investors from China. Before they knew it, China was a predominant force on the west coast of Canada. They greedily eye the Canadian resources and commodities.
      California will be the first real Chinese colony on the mainland of the US.  They already have a great foothold in Hawaii. It’s a huge vacation spot for mainland Chinese.   They are helping in Greece and Europe in general since it is their largest market. Their financial commitment will grow in Europe as they buy defaulted bonds and sovereign debt that is secured by the actual property of the government and private property of its citizens.  The Chinese will do the same thing to the PIIGS as California is contemplating doing to underwater mortgage holders.   Expropriating private property that is underwater through debt purchase and then taking over the private property rights of the ‘former’ owners of the homes.  If you have debt on your home YOU DO NOT OWN IT.  The bank owns it and if the bank is Hanmi Bank, Nara Bank, United General Bank or any other Chinese owned bank then know who your next master will be.  
     The US and CA are the second largest Chinese markets.  If the Chinese can get to par with the US as a reserve currency, such as they have done in Africa, their newest economic and financial colony, they will buy and sell us and anything we THINK we own and do so like any commodity on the open market. We will sell anything to stay alive just as the Portugese people are selling their last fragments of gold to pay the rent. The Chinese will use our own bankrupt currency to buy us. Living a live without counterparty risk might protect you. Gold and silver are a good part of that system
     As they Hoover up every ounce of gold and silver and back their currency with real value, they and their allies, the BRICS and SA (no friends of ours IMO) will shove us off the cliff as a useless relic of the 20th Century  All empires end up on the ash heap of history.  If we don’t get our poop in  a group soon, we will find ourselves relegated to third world status. English as a second language will come behind Mandarin.

    • Nihowma/Leyho-ma,
      On the bright side, once they take over, at least they’ll replace North American pop-guzzling with cancer-fighting green tea!  Or at least force the Americans to downsize their mammoth-sized gulp cups and make them use insulin-producing sugar in their pop as opposed to non-insulin-producing corn syrup.
      Finally, America will be known not for its fat people but for its skinny people!
      And come now, Peking Duck and spring rolls at Basketball games instead of hot dogs and fries…. I’m looking forward to it (well, I don’t attend basketball games, but hockey games works).
      Interestingly enough, the only other nation who is up to par with China in the nano-world in Israel. Iran is about to find out that their bluff about Uranium-only reactors (as opposed to the unweaponizable Thallium the Chinese offered them) is about to cost them dearly at the hands of Zionist warriors (and the God who protects them).
      Now, here is a question for everyone, does anybody think the Spring rolls served at sports events will be kosher????     

    • Great post, but for the record, it’s Hongcouver, not HongKongcouver.
      :)

  21. JIm Willie linked in his latest Newsletter to a story which quoted the story below.  Other posts on this website mentioned that the US gov’t is behind JPMorgan and the silver manipulation and that JPMorgan is allowed to hide it all due to national security reasons, so figured I’d post a copy of it here since this is would be part of the authorization behind such actions.

    Intelligence Czar Can Waive SEC Rules
    By Dawn Kopecki
    BusinessWeek Online
    May 23, 2006
    Now, the White House’s top spymaster can cite national security to exempt businesses from reporting requirements

    President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.

    Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act. Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn’t be immediately determined whether any company has received a waiver under this provision.

    The timing of Bush’s move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration’s top intelligence official.

    FEW ANSWERS.

    White House spokeswoman Dana M. Perino said the timing of the May 5 Presidential memo had no significance. “There was nothing specific that prompted this memo,” Perino said.

    In addition to refusing to explain why Bush decided to delegate this authority to Negroponte, the White House declined to say whether Bush or any other President has ever exercised the authority and allowed a company to avoid standard securities disclosure and accounting requirements. The White House wouldn’t comment on whether Negroponte has granted such a waiver, and BusinessWeek so far hasn’t identified any companies affected by the provision. Negroponte’s office did not respond to requests for comment.

    Securities-law experts said they were unfamiliar with the May 5 memo and the underlying Presidential authority at issue. John C. Coffee, a securities-law professor at Columbia University, speculated that defense contractors might want to use such an exemption to mask secret assignments for the Pentagon or CIA. “What you might hide is investments: You’ve spent umpteen million dollars that comes out of your working capital to build a plant in Iraq,” which the government wants to keep secret. “That’s the kind of scenario that would be plausible,” Coffee said.

    AUTHORITY GRANTED.

    William McLucas, the Securities & Exchange Commission’s former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies “to play fast and loose with their numbers.” McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: “It could be that you have a bunch of books and records out there that no one knows about.”

    The memo Bush signed on May 5, which was published seven days later in the Federal Register, had the unrevealing title “Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives: Memorandum for the Director of National Intelligence.” In the document, Bush addressed Negroponte, saying: “I hereby assign to you the function of the President under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended.”

    A trip to the statute books showed that the amended version of the 1934 act states that “with respect to matters concerning the national security of the United States,” the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate “books, records, and accounts” and maintaining “a system of internal accounting controls sufficient” to ensure the propriety of financial transactions and the preparation of financial statements in compliance with “generally accepted accounting principles.”

  22. This was a very good discussion.  Informative like those on ZH.  Thanks to all the contributors.  Many interesting points of view.
     
    I am still skeptical of PMs returning to favor as real money.  The only way I see that happening is if  (when) we have a financial collapse.

  23. So an explosion in the price of precious metals can actually help USA and Europe to stay independent from Chinese. But the cabal does not think that way. They are deliberately bancrupting all western nations thus making Chinese work much much easier.

  24. Correct Proverbs 1616  I got a little quick on the Kong finger.  My concern is that the People Army  would turn Southern CA into an organleggers paradise.  The transplant tourism business would thrive with all those healthy tanned Californians.   I call it transplant dimsum.   Of course I am a truly  a sick person and would think that way but it might get me to go back to Sou Cal if I needed some new giblets. 

    • Well, here is my thought,
      do the Chinese really want radioactive Californian body parts? All that Fukushima radiation will mess up those organs. I’m thinking they might skip on that.
      But I got to thinking, maybe there WILL be hot dogs and pogos (corn dogs for Americans) at sports events…   Poodle on a stick, and bulldog on a Keiser. You could call it the Max (ed out) Keiser.

      In all seriousness,   China is going to take over, but as a  Christian, I’m not too worried, I believe the rapture will take me up before too long.

  25. ALL commodities are “money”
    Notes are “promises to pay”
    Notes are NOT money, but few understand this simple distinction.

    Sure China is looking for any Financial Advantage to get over on the Western world.
    REAL MONEY is commodity metals and silver is but one of many they will leverage.

    When resources are scarce… suppliers will choose between fiat notes or silver… this is a No Brainer! 

    The FED Reserve, the EU Central bank and others are simply printing too many UN-REDEEMABLE “Notes” 

    Remember…. He who has the Gold & Silver, will both make the Rules and Rule the World
      

    • Very important points you’re making, Citizen.  But it’s worse than a promise to pay.  It’s an obligation to pay put on our backs, the citizens.  Just ask someone in Greece about the real-world implications of these semantics :-)  
       
      Money, too, has a specific definition.  Technically speaking, all commodities can serve as a store of value to a greater or lesser degree, but not all commodities are considered true money.  For example, durability is part of the traditional def of money and raw corn obviously doesn’t qualify.

  26. I don’t mean to be a “Debbie Downer”, but the goldsilverworlds.com article from Aug. 19 referenced here is sourcing a July 11 report from Erste Group Research which shows the key quote:”He also advises PBoC to add silver to the official reserves.” as being sourced from a ZeroHedge post from January 2011:

    http://www.zerohedge.com/article/china-central-bank-advisor-urges-increase-official-gold-reserves

  27. Why would anyone belive that manipulation will stop simply because another exchange opens or because someone adds to their reserves? Manipulation will always be there. Think the Chinese are friendly open market free reign governing? Doesn’t make sense to think that at all.

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