While We Increase QE to Infinity, China Wisely Doubles Down on Gold Accumulation

By AGXIIK:

We double down on the most destructive form of financial ineptitude with wild fire printing of FIAT currency, hollowing out our economy while exporting inflation to nearly every country.  China wisely doubles down and  doubles down again Real Money.   After the Western powers, aided by gold stealing allies like Japan, made off with well over 100,000 tons of gold China accumulated over the last 3,000 year, they are not going to let this happen again. 
Their military, ships, nukes and eye to making the South China sea their own pond and defensible space, is not being developed to create forward bases.  It’s to protect themselves and make their country inpenetrable from their former and present foes.  This is a country with a strong memory that reaches over 5,000 years. And they do not appear to suffer from selective memory and collective amnesia, something that we engage in at a wholesale rate.  Those who forget their history forget their legacies and lose their country.
China gold stocks could easily top 10,000 tons. While worth ‘only’ $700 billion or so, this accumulation will soon be sufficient to lay down the Yuan marker as an alternative currency.  If the rest of the Chinese ‘Golden Horde’ allies rally behind the Yuan, we will be faced with our own monetary existential problem.  This is the real USD currency collapse that so many wise minds talk about.  One day the light switch on the dollar will be turned off.  The inflation tsunami will be staggeringly large. All the conversations we’ve had about inflation and the dollar collapse will be spoken in the past tense.
Whatever remaining dollar reserves held in China will be written off, just like the Greek Bonds going through their third haircut in 3 years.  In our case there won’t be the ECB, IMF and EFSF to bail us out.  If there is, we will not like their terms.

Comments

  1. In ref to: “After the Western powers, aided by gold stealing allies like Japan, made off with well over 100,000 tons of gold China accumulated over the last 3,000 year, they are not going to let this happen again. ”

    Much more than 100,000 tons…

    For review and comment:

    http://www.scribd.com/doc/93652234/Cease-Desist-Order-to-UBS-BIS-Evidence
    http://www.scribd.com/doc/93549901/LIEN-Affidavit-Against-Federal-Reserve-The-Fed
    http://www.scribd.com/doc/93545192/LIEN-Affidavit-Against-European-Central-Bank-ECB
    http://www.scribd.com/doc/93058461/LAWSUIT-Complaint-SDNY-11-23-2011-Neil-Keenan
    BHINNEKA TUNGGAL IKA
    bhinneka tunggal ika
    http://www.scribd.com/Free_Nations/documents?page=1#

    • Please…when Drake promotes this kind of stuff don’t you get a bit suspicious–Asian gold, the Dragon Family, Neil Keenan lien on the central banks.  I get an email every day from some guy in Nigeria that says I won the lottery.  Doesn’t make it real.

    • I agree.  Point out to the lawfirm handling the case that Judge Holwell resigned about three months after it was assigned to him.  They will likely inform you that the case was re-assigned to Judge Furman.  In doing so, they will have just confirmed that the case is real.  Now as for the merits of the case, well… Judge Furman has better access to the evidence than you and I. We should follow the case closely to make sure justice is served.

  2. Well stated AG.
    There is no democracy without a strong middle class.
    TPTB intent is to destroy the MC and they are doing a damn fine job.
    It is their plan.
    Preserve your wealth with physical metals. 

    • When most of the middle class is destroyed, there would still be some people left that are part of the middle class which will be us soon for preserving our wealth in physical precious metals which will also keep our middle class status in the process.
       

  3. http://preview.tinyurl.com/a8papon

    Which is why I buy physical Silver.

  4. waiting patiently….or is it impatiently?

  5. Knowing that China extricated itself from the devastating curse of ‘flying money’ by initially converting it all to copper cash in 1450 (which traded current, by Tael weight, throughout Asia until the 1930s), I’ve been attentive to the huge, growing stockpile of copper amassed there over the past half decade. Without benefit of hindsight, analysts (unanimously) have extrapolated plans of ‘infrastructure buildout’ and ‘modernization’ through their myopic presumptions and complete ignorance of copper’s fundamental domestic role in a fully metallic monetary scheme (proven over eons as the single most sustainable form of commercial media).

    Because governments and bankers are mezmerized by the potential for power-grabing that surrounds the false (and ultimately futile) imposition of gold mono-metallic monetary schemes, they focus everyone’s rapt gaze on gold accumulation in near total deference away from silver and copper. This is the meme behind their cunning ’industrial metal’ contrivance. Similarly, when gold too was conveniently held as a ’barberous relic’, their meme was floated to denigrate gold as only useful as ’jewelry’.

    If China truly uses its history as a compass for charting a best course out of this most ruinous monetary crisis ever faced in human annals (not only for themselves, but for all human-kind), then I have to expect it’s yet unstated intent is not to attempt making paper Yuan any sort of ‘reserve currency’ (the Western brainwashed desperate hope), but rather to revolutionize the entire frameworks back to the universal poly-metallic scheme, where all Peoples and their Countries have no choice but to deal honestly. In this world of Mutually Assured Destruction … the old alternative of ‘gunboat bullying’ is foreclosed, a priori.

    • I’m glad to see that I’m not the only one on this website that is attracted to copper as an investment! Copper is also undervalued like silver which one of the reason why I am also stacking some copper pennies.

  6. Pat  this would explain why china is buying Aussie mines while turning Africa into a commodity-based economic colony.  I hadn’t thought about copper as another strategic metal and was not aware that China was buying it as well.  The tri metallic metal foundation, I think this is what you refer to, would include copper as a base to the gold and silver.  Are my assumptions correct that this is the reason for China stacking copper.  I wish I could since it’s pretty cheap but pennies are the best I can for now.
    The other thing that seems to fit this scenario is that silver and gold are byproducts of copper mining This would be a good three-fer for Chinese miners.

    • @AGXIIK

      A few years ago China caught a lot of Press over the enormous amount of copper it had stockpiled and I suspect it’s been taking direct stakes in mines as a lower profile means of expanding on that program. Not long after news broke on their stockpile, Goldman quickly bought up a similar hoard and my guess is that it was a ploy to squeeze the Chinese into jacking up their bids to get so much more. I’m sure they were miffed over that.

      Right now, copper is at a 130:1 ratio to silver (Troy). As we’re only too well aware, once the banknote scheme implodes, the distribution of silver among the general population in the Western Hemisphere is abysmally low. Still, with copper so close to its ancient ratio of 100:1, it’s yet THE PERFECT base on which to re-institute hard money again. I’d divided out the domestic warehouse stores by the float of American banknotes and there’s MORE THAN ENOUGH (at the equitable 10 grams per note) to make that conversion within a couple months (using every public and private minting operation across the country). With that foundation, silver can re-emerge as mid-level coin again and gold would follow behind. All three will ‘rise’ significantly (or, as I anticipate, ratios in the rest of the matrix will rather equilibrate ‘down’) with the greatest emphasis on copper and silver.

  7. @ SheepDog …. it has always been about the destruction of the Middle Class, for the obvious reason you correctly state.

    http://dandelionsalad.wordpress.com/2010/03/29/western-civilization-and-the-economic-crisis-the-impoverishment-of-the-middle-class-by-andrew-gavin-marshall/

    For more recent articles by Andrew check this link http://en.wordpress.com/tag/marshall-andrew-g/ 

  8. China and Russia are the big buyers of Gold, 3rd World War in the Horizon? As for owning the Australian mines, I see China owning the whole Country. IMO

    • It IS in fact a lot cheaper to buy it than to attempt to conquer it militarily.

      Makes me wonder why the Turks have not purchased Greece yet.  I’m convinced that they could get a great deal on it about now and they could worry about evictions later.  ;-)
       

    • China is buying up energy companies in Canada, mines in Canada, even energy companies and mines here in the US.

  9. That’s some interesting data Pat 
    1 oz gold equals
    20 oz silver  (reverts to historical GTSR) equals
    2,000 oz copper

    According to Kitco copper is about $3.62 a POUND.  In the last year it’s ranged from $3.25 to $3.95 per lb  Its low was about $1.25 per lb Nov 2008, a liquidation event due to the Lehman crash.  It’s bounced as high as $4.60 a lb in Feb 2011.  You could buy 1,000 lb of copper for $3,700 or 112 ounces of silver. 
    If copper does assume a role in the world of currency, owning 1,000 lbs might be a good thing. I would wait for another financial calamity like we saw with Lehman before I’d load up but a ground floor mini storage unit is pretty cheap. I think Sumkid’s on to something stacking pennies.  I have $200 worth but they are not full copper.

    • Wow, Ag… anyone buying copper near the lows in 2008 and selling near the highs of 2011 got better than a 3 bagger on their money.  Not at all bad!

      If the ratio of copper to silver is in the 100-130 area, how does this equate to the amounts of each that are mined each year?

      These days, the G / S ratio is around 50:1, yet the actual mined ratio is about 9.3:1.  I find this most curious given that above ground silver is both more rare AND more useful than above ground gold.
       

    • Keep in mind that the spot quote is on avoirdupois pounds. To convert to Troy, first divide by 7000 (grains), then multiply by 480. Apples to apples, so to speak.

    • @AGXIIK I would recommend you to stack some copper pennies as soon as possible because the US government can remove the penny from circulation like in Canada. Now, it is your opportunity to stack some copper with 50% off! My goal is to reach 1000$ in face value copper pennies which equal to about an ounce of gold.

  10. AG12K….help us all understand how you come up with China holding 10,000 tonnes of gold.  You have mentioned it a few times in other posts.  They officially report 1054 tonnes.  The U.S. Reports 8000 tonnes.  If China really does hold 10,000 tonnes that would be a global economic currency war game changer.

  11. Ugly Dog  I extrapolated a bit using mined gold of about 360 tons a year plus an equal amount mined illegally  China retains all their gold. If this continued for 5 years we’re at 3,600 tons.  Imports are estimated at 1,000 tons a year, a little more than half disclosed through gold purchase reports and half through a large series of hedge funds peppered around the Carribean with orders to quietly buy any gold to be  had and then  shipped to Hong Kong.
     5 years at that rate and China has another 5,000 tons.  These two totals are now 8,600 tons.  This assumes China had not a single ton of gold prior to 2007.  That seems unlikely.  10,000 tons seems low to me in this case.
    If Japan, the UK and the US siphoned off 170,000 tons of  Chinese gold up to and during WWII, according to the Yamashita gold story, it would be a stretch to think these outside forces got it all.  
    Jim Willie has some detailed information about the disclosed gold hoards which were removed from UBS and HSBC after they lost some bets on gold shorts to the Chinese, I think that is how Willie phrased it, but the end result indicates that 6000 tons were taken from those bank vaults. 
    Willie considers UBS and HSBC zombie banks due to China’s masterful gutting of their gold stocks.  These two banks are  hard up for other reasons including making enemies through leaked offshore account disclosures in the case of UBS and HSBC for their drug money laundering.
    Whether China gobbled up 6,000 tons from the bullion vaults or just bought gold on the open market along with  interior and external mining efforts, 10,000 tons seems plausible.  If you measure this in light of Turkey with a centuries old accumulation of 5,000 tons and Iran’s purported 4,000 tons, it seems that this could be a reasonable estimate.
    I would even guess 10,000 tons is quite low but no one is talking about that who has any certainty of facts.

    • If that’s the case, then it could be disaster for the USA if someone discovers those 10,000 tons of gold from China. After that, the USA will do nothing to China because China will become superior to USA soon in my opinion. The other question is whether the “gold” bars are tungsten plated with gold or not.

  12. Totally agree AG. For reference I have posted the Chinese report (translated) which you reference in the “doubling down” here: 

    http://ausbullion.blogspot.com.au/2012/12/guidance-issued-to-promote-sustained.html

    Also don’t forget China is stockpiling silver. I come across many mining execs at conferences I attend, and without fail those that mine silver as a byproduct of non precious metals (lead, nickel, zinc) send their mine’s concentrate to China to refine. When asked if they take the silver back all say NO, they just get paid out by the refinery. So one would assume most of this silver remains within China as China is a net importer of the metal.
     

  13. At least China has learned its old mistakes and as for the USA, Americans haven’t learned the mistakes that they’ve made with the British. China knows what real money is and most of the people in the USA are brainwashed into thinking that paper currencies have values.

Speak Your Mind