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FLASH: China knows about gold price suppression, and U.S. knows China knows
Submitted by cpowell on 03:33PM ET Saturday, September 3, 2011. Section: Daily Dispatches
6:47p ET Saturday, September 3, 2011
Dear Friend of GATA and Gold:
China knows that the U.S. government and its allies in Western Europe strive to suppress the price of gold, and the U.S. government knows that China knows, according to a 2009 cable from the U.S. Embassy in Beijing to the State Department in Washington.
The cable, published in the latest batch of U.S. State Department cables obtained by Wikileaks, summarizes several commentaries in Chinese news media on April 28, 2009. One of those commentaries is attributed to the Chinese newspaper Shijie Xinwenbao (World News Journal), published by the Chinese government's foreign radio service, China Radio International. The cable's summary reads:
"According to China's National Foreign Exchanges Administration, China's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the United States and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or euro.
Therefore, suppressing the price of gold 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."
It's hard to believe that, two years later, China is still leaving so much of its gold with the Federal Reserve Bank of New York and the Bank of England when even little Venezuela has publicly figured out the gold price suppression component of the Western fractional reserve banking system and is attempting to repatriate its gold from the Bank of England and various Western bullion banks: http://www.gata.org/node/10281
http://www.gata.org/node/10286
It is already a matter of record that China dissembled about its gold reserves for the six years prior to the public recalculation of its gold reserves in April 2009 that prompted the commentary in Shijie Xinwenbao. At that time China announced that its gold reserves were not the 600 tonnes it had been reporting each year for the previous six years but rather 76 percent more, 1,054 tonnes:
http://www.gata.org/node/9545
ZeroHedge, which seems to have broken the story of the Beijing embassy cable this evening, comments:
"Wondering why gold at $1,850 is cheap, or why gold at double that price will also be cheap, or, frankly, at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. Putting that into dollar terms is, therefore, impractical at best and illogical at worst. We have a suspicion that the following cable from the U.S. embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24-karat pool."
The ZeroHedge commentary can be found here:
http://www.zerohedge.com/news/wikileaks-discloses-reasons-behind-chinas-...
In addition to fund managers throughout the world, this cable may be of special interest to the gold bears CPM Group Managing Director Jeff Christian, who says he consults with most central banks and that they hardly ever think about gold, and Kitco senior analyst Jon Nadler, who insists that central banks have no interest whatsoever in manipulating the gold price.
In fact, of course, gold remains the secret knowledge of the financial universe, and its price is actually the determinant of every other price and value in the world.
The Beijing embassy cable can be found here:
http://cables.mrkva.eu/cable.php?id=204405
And, just in case, at GATA's Internet site here:
http://www.gata.org/files/USEmbassyBeijingCable-04-28-2011.txt
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
So much that can be covered here, but first and foremost, GATA’s credibility and proof of our understanding of the real gold market (one not reported on by the mainstream gold world, Planet Wall Street, and the financial media) just took another giant leap forward. We have been all over the Chinese buying gold story for MANY years, having reported them buying secretly via intermediaries from our STALKER source.
It is quite intriguing and represents GATA’s track record of how we have nailed what was really going on in the gold market all these years, while being disparaged by the mainstream gold world and our critics. See for yourself:
April 24, 2009 - Gold $913 up $7 - Silver $12.92 up 12 cents
GATA’s Credibility Soars On China Gold Buying News
GATA’s credibility took another leap forward this morning when China announced it has increased its gold reserves to 1,054 tonnes from 600 tonnes. For years and years and years GATA has claimed that the gold world establishment has failed to account for surreptitious gold lending operations by The Gold Cartel to suppress the price. For there to be greater gold supply hitting the market, there had to be greater demand to satisfy this undisclosed supply. As a result of Frank Veneroso’s brilliant supply/demand work in years past, we mentioned that one of the demand areas, that the likes of a GFMS was not accounting for, was China, and that someday their stealth buying would be reported. Voila…
China gold reserves apparently doubled
HONG KONG (MarketWatch) -- China has added to its gold reserves and now holds 1,054 metric tons of the yellow metal, according to a Friday report by the Xinhua News Agency, which cited comment by Hu Xiaolian, head of the State Administration of Foreign Exchange.
Hu said that China's gold reserves had risen by 454 metric tons since 2003 and that the total was being reported to the International Monetary Fund as per the organization's rules.
A Dow Jones Newswire report said the figure cited was nearly double China's reported gold reserves as of the end of last month, but noted that it wasn't clear which gold reserves Hu was referring to.
She said China's gold reserves now rank fifth in the world among nations which publicly disclose their holdings.
Analysts said China bullion buying reflects efforts to diversify their nearly $2 trillion stockpile of foreign exchange reserves.
"Chinese officials have been increasingly vocal about their concern on the U.S. dollar and the U.S. bailout policies of late, and have actively been seeking to diversify into other assets, especially commodities," said Martin Hennecke, an associate director with Tyche Group in Hong Kong…
-END-
To say that this revelation is a big deal is an understatement … for a number of reasons…
*It is more evidence that various central banks are increasing their gold holdings, in contrast to a number of western banks which have been selling for more than a decade.
*China’s move debunks Planet Wall Street and other western central bankers that gold is a barren asset and not worth owning.
*And it enhances the notion that gold is a valuable reserve which will encourage other central banks to follow China’s lead.
*It surely will spook some of the sheeple central bankers who have foolishly dumped their country’s gold reserves at bargain basement prices … especially at a time when the West is looking at one financial crisis after another and the world’s major currency reserve, the dollar, is looking very suspect. A number of them are unlikely to press for further bullion sales from their countries’ reduced reserves.
*The likelihood of China continuing to build its reserves is extremely high. They were secretly building their gold reserves BEFORE the latest financial crises. If this was the Chinese mindset then, what must it be now? As is, their percentage of gold reserves is still on the very low side.
*Because of what the US is doing with our bailouts and fiscal deficits, the US dollar is surely on a precipice, thus China must be looking to accumulate more gold. Therefore, this is not a sell the news market announcement. It is just the opposite. It is a clarion call to buy physical gold.
*That clarion call will not go unheeded by the sophisticated big money in the world.
*This is a major new headache for The Gold Cartel.
Derrick sends us some retro on China/gold which was brought to your attention years ago…
China's forex watchdog faces dilemma on expanding gold reserves
From Xinhua News Agency
Monday, December 26, 2005
http://news.xinhuanet.com/english/200512/26/content_3971982.htm
SHENZHEN, China -- To buy or not buy? That's a question for Chinese foreign exchange authorities. They have been urged to expand gold reserve since the Renminbi appreciation, but the decision is hard to make since the gold prices are rocketing.
Some economists have been appealing to the State Administration of Foreign Exchange to expand China's gold reserve after the Renminbi appreciation in a bid to reduce the country's reliance on the greenback....
***
GATA has been all over the Chinese gold buying case and we can account for it in our understanding of the true supply/demand picture. GFMS and the World Gold Council CANNOT!
And then to shed light on the MIDAS analysis and what lies ahead…
Bill,
I reproduce the following from a Financial Times article this morning declaring that China's gold reserves have officially been revised to 1,054 tons from 600. You have long held the view that China was buying gold through intermediaries and would eventually disclose part or all of these activities. It is the end quote I append that caught my eye:
"Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tonnes.
"It’s not a matter of a few hundred, or 1,000 tonnes. China should hold more because of its new international status, and because of the financial crisis," he said. "The financial crisis means the US dollar’s value is changing fast, and it may retreat from being the international reserve currency. If that happens, whoever holds gold will be at an advantage." (emphasis added)
Thought you might be interested.
All my best to you and your health, Brad
And here’s a big tip o’ the hat to our STALKER source who nailed this one, beginning back in 2003, which just happens to be the year the Chinese now admit they started buying.
Doing a Café search, I have yet to find the initial presentation to The Café ... but the bottom line is our source went to Phoenix for a meeting with six others in 2003. Our source was there to act as a gold buyer in the future. The person who held the meeting spoke FROM BEHIND A SCREEN, as he did not want to disclose his identity. While speaking perfect English, our source thought at the time he might be Chinese and did not wish that to be known.
Our STALKER source called today and I could almost see the smile on his face through the phone. He reminded me of another tip, i.e. it was Chinese doing the buying, and he reported it was going through Australian banks, which have a longstanding relationship with the Chinese.
It is with great pleasure to bring MIDAS commentary to you re the Chinese/STALKER from more than half a decade ago…
September 10, 2003 - Gold $379.70 down $1.80 - Silver $5.22 unchanged
The Stalker
…Could any market trade more predictably than gold has the past month? Every time gold rallies sharply and early in a given day, it is capped by The Gold Cartel, sold off later in the trading session, brought down early that evening in overseas trading, and then is pressured all the next day by the same cabal. Over and over we see the same trading pattern.
You see it, I see it, and SO MUST the $4.6 billion buyer, which MIDAS characterized in general as being around some $40 ago. It seems to me this "gold buying group" is playing with The Gold Cartel. They know the cabal’s drill as well as we do and probably devised a trading plan to take them on, not fight them too hard on given days, and then overpower them.
This "gold buying group" must know what GATA knows, in that the cabal has a serious vulnerability, or Achilles Heel, when it comes to the physical gold market:…
http://www.lemetropolecafe.com/james_joyce_table.cfm?pid=9463
Submitted by cpowell on 03:33PM ET Saturday, September 3, 2011. Section: Daily Dispatches
6:47p ET Saturday, September 3, 2011
Dear Friend of GATA and Gold:
China knows that the U.S. government and its allies in Western Europe strive to suppress the price of gold, and the U.S. government knows that China knows, according to a 2009 cable from the U.S. Embassy in Beijing to the State Department in Washington.
The cable, published in the latest batch of U.S. State Department cables obtained by Wikileaks, summarizes several commentaries in Chinese news media on April 28, 2009. One of those commentaries is attributed to the Chinese newspaper Shijie Xinwenbao (World News Journal), published by the Chinese government's foreign radio service, China Radio International. The cable's summary reads:
"According to China's National Foreign Exchanges Administration, China's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the United States and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or euro.
Therefore, suppressing the price of gold 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."
It's hard to believe that, two years later, China is still leaving so much of its gold with the Federal Reserve Bank of New York and the Bank of England when even little Venezuela has publicly figured out the gold price suppression component of the Western fractional reserve banking system and is attempting to repatriate its gold from the Bank of England and various Western bullion banks: http://www.gata.org/node/10281
http://www.gata.org/node/10286
It is already a matter of record that China dissembled about its gold reserves for the six years prior to the public recalculation of its gold reserves in April 2009 that prompted the commentary in Shijie Xinwenbao. At that time China announced that its gold reserves were not the 600 tonnes it had been reporting each year for the previous six years but rather 76 percent more, 1,054 tonnes:
http://www.gata.org/node/9545
ZeroHedge, which seems to have broken the story of the Beijing embassy cable this evening, comments:
"Wondering why gold at $1,850 is cheap, or why gold at double that price will also be cheap, or, frankly, at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. Putting that into dollar terms is, therefore, impractical at best and illogical at worst. We have a suspicion that the following cable from the U.S. embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24-karat pool."
The ZeroHedge commentary can be found here:
http://www.zerohedge.com/news/wikileaks-discloses-reasons-behind-chinas-...
In addition to fund managers throughout the world, this cable may be of special interest to the gold bears CPM Group Managing Director Jeff Christian, who says he consults with most central banks and that they hardly ever think about gold, and Kitco senior analyst Jon Nadler, who insists that central banks have no interest whatsoever in manipulating the gold price.
In fact, of course, gold remains the secret knowledge of the financial universe, and its price is actually the determinant of every other price and value in the world.
The Beijing embassy cable can be found here:
http://cables.mrkva.eu/cable.php?id=204405
And, just in case, at GATA's Internet site here:
http://www.gata.org/files/USEmbassyBeijingCable-04-28-2011.txt
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
So much that can be covered here, but first and foremost, GATA’s credibility and proof of our understanding of the real gold market (one not reported on by the mainstream gold world, Planet Wall Street, and the financial media) just took another giant leap forward. We have been all over the Chinese buying gold story for MANY years, having reported them buying secretly via intermediaries from our STALKER source.
It is quite intriguing and represents GATA’s track record of how we have nailed what was really going on in the gold market all these years, while being disparaged by the mainstream gold world and our critics. See for yourself:
April 24, 2009 - Gold $913 up $7 - Silver $12.92 up 12 cents
GATA’s Credibility Soars On China Gold Buying News
GATA’s credibility took another leap forward this morning when China announced it has increased its gold reserves to 1,054 tonnes from 600 tonnes. For years and years and years GATA has claimed that the gold world establishment has failed to account for surreptitious gold lending operations by The Gold Cartel to suppress the price. For there to be greater gold supply hitting the market, there had to be greater demand to satisfy this undisclosed supply. As a result of Frank Veneroso’s brilliant supply/demand work in years past, we mentioned that one of the demand areas, that the likes of a GFMS was not accounting for, was China, and that someday their stealth buying would be reported. Voila…
China gold reserves apparently doubled
HONG KONG (MarketWatch) -- China has added to its gold reserves and now holds 1,054 metric tons of the yellow metal, according to a Friday report by the Xinhua News Agency, which cited comment by Hu Xiaolian, head of the State Administration of Foreign Exchange.
Hu said that China's gold reserves had risen by 454 metric tons since 2003 and that the total was being reported to the International Monetary Fund as per the organization's rules.
A Dow Jones Newswire report said the figure cited was nearly double China's reported gold reserves as of the end of last month, but noted that it wasn't clear which gold reserves Hu was referring to.
She said China's gold reserves now rank fifth in the world among nations which publicly disclose their holdings.
Analysts said China bullion buying reflects efforts to diversify their nearly $2 trillion stockpile of foreign exchange reserves.
"Chinese officials have been increasingly vocal about their concern on the U.S. dollar and the U.S. bailout policies of late, and have actively been seeking to diversify into other assets, especially commodities," said Martin Hennecke, an associate director with Tyche Group in Hong Kong…
-END-
To say that this revelation is a big deal is an understatement … for a number of reasons…
*It is more evidence that various central banks are increasing their gold holdings, in contrast to a number of western banks which have been selling for more than a decade.
*China’s move debunks Planet Wall Street and other western central bankers that gold is a barren asset and not worth owning.
*And it enhances the notion that gold is a valuable reserve which will encourage other central banks to follow China’s lead.
*It surely will spook some of the sheeple central bankers who have foolishly dumped their country’s gold reserves at bargain basement prices … especially at a time when the West is looking at one financial crisis after another and the world’s major currency reserve, the dollar, is looking very suspect. A number of them are unlikely to press for further bullion sales from their countries’ reduced reserves.
*The likelihood of China continuing to build its reserves is extremely high. They were secretly building their gold reserves BEFORE the latest financial crises. If this was the Chinese mindset then, what must it be now? As is, their percentage of gold reserves is still on the very low side.
*Because of what the US is doing with our bailouts and fiscal deficits, the US dollar is surely on a precipice, thus China must be looking to accumulate more gold. Therefore, this is not a sell the news market announcement. It is just the opposite. It is a clarion call to buy physical gold.
*That clarion call will not go unheeded by the sophisticated big money in the world.
*This is a major new headache for The Gold Cartel.
Derrick sends us some retro on China/gold which was brought to your attention years ago…
China's forex watchdog faces dilemma on expanding gold reserves
From Xinhua News Agency
Monday, December 26, 2005
http://news.xinhuanet.com/english/200512/26/content_3971982.htm
SHENZHEN, China -- To buy or not buy? That's a question for Chinese foreign exchange authorities. They have been urged to expand gold reserve since the Renminbi appreciation, but the decision is hard to make since the gold prices are rocketing.
Some economists have been appealing to the State Administration of Foreign Exchange to expand China's gold reserve after the Renminbi appreciation in a bid to reduce the country's reliance on the greenback....
***
GATA has been all over the Chinese gold buying case and we can account for it in our understanding of the true supply/demand picture. GFMS and the World Gold Council CANNOT!
And then to shed light on the MIDAS analysis and what lies ahead…
Bill,
I reproduce the following from a Financial Times article this morning declaring that China's gold reserves have officially been revised to 1,054 tons from 600. You have long held the view that China was buying gold through intermediaries and would eventually disclose part or all of these activities. It is the end quote I append that caught my eye:
"Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tonnes.
"It’s not a matter of a few hundred, or 1,000 tonnes. China should hold more because of its new international status, and because of the financial crisis," he said. "The financial crisis means the US dollar’s value is changing fast, and it may retreat from being the international reserve currency. If that happens, whoever holds gold will be at an advantage." (emphasis added)
Thought you might be interested.
All my best to you and your health, Brad
And here’s a big tip o’ the hat to our STALKER source who nailed this one, beginning back in 2003, which just happens to be the year the Chinese now admit they started buying.
Doing a Café search, I have yet to find the initial presentation to The Café ... but the bottom line is our source went to Phoenix for a meeting with six others in 2003. Our source was there to act as a gold buyer in the future. The person who held the meeting spoke FROM BEHIND A SCREEN, as he did not want to disclose his identity. While speaking perfect English, our source thought at the time he might be Chinese and did not wish that to be known.
Our STALKER source called today and I could almost see the smile on his face through the phone. He reminded me of another tip, i.e. it was Chinese doing the buying, and he reported it was going through Australian banks, which have a longstanding relationship with the Chinese.
It is with great pleasure to bring MIDAS commentary to you re the Chinese/STALKER from more than half a decade ago…
September 10, 2003 - Gold $379.70 down $1.80 - Silver $5.22 unchanged
The Stalker
…Could any market trade more predictably than gold has the past month? Every time gold rallies sharply and early in a given day, it is capped by The Gold Cartel, sold off later in the trading session, brought down early that evening in overseas trading, and then is pressured all the next day by the same cabal. Over and over we see the same trading pattern.
You see it, I see it, and SO MUST the $4.6 billion buyer, which MIDAS characterized in general as being around some $40 ago. It seems to me this "gold buying group" is playing with The Gold Cartel. They know the cabal’s drill as well as we do and probably devised a trading plan to take them on, not fight them too hard on given days, and then overpower them.
This "gold buying group" must know what GATA knows, in that the cabal has a serious vulnerability, or Achilles Heel, when it comes to the physical gold market:…
http://www.lemetropolecafe.com/james_joyce_table.cfm?pid=9463
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