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!?!