Saturday, May 23, 2015

Bill Holter: Does China Have 30,000 Tons of Gold Reserves?

Bill Holter has written a new article appearing on Jim Sinclair's blog site that quotes a new article in the Russian publication Pravda as claiming China now owns 30,000 tons of gold reserves. If true, this will be a huge piece of news of course in relation to potential monetary system change. 

Mr. Holter reviews the Pravda article and acknowledges that some will question this media source, but asks what a Russian media outlet would have to gain by making a public statement like this if they know it's not true? Below are quotes from the Pravda article (which also points out that China needs a lot of gold to gain respect for the Yuan and get it included into the SDR currency basket at the IMF). After the quotes are a few added comments.

"China is waiting for the right moment to remove the US dollar from economic reign. Once the US dollar loses its leadership, China plans to make the yuan world's first currency.

According to Duowei News, to ensure its domination, China is saving up gold. According to unconfirmed reports, China already has about 30,000 tons of the precious metal. If this is true, it means that China will be capable of brining the US dollar down in an instant.

Economic analyst Jing Zhou believes that in order to challenge such a powerful economy as that of the United States, one will need a very large amount of gold.

In addition, the Chinese authorities expect that the Chinese national currency will be added on the list of IMF reserve currencies that already includes the dollar, the euro, the pound sterling and the Japanese yen.

Thus, Beijing is getting ready to topple the US dollar by increasing its gold reserves. Noteworthy, Russia also sticks to a similar tactic: since 2005, the country has doubled its gold reserves. As of late 2014, Russia was ranked fifth in the world in terms of gold reserves

"If China does have 30,000 tons of gold, then the yuan will have a very strong shield to protect itself. Even if it is not true, it is clear that China collects gold very actively. In addition, China's position in global financial markets has increased considerably," Duowei News said."  

. . . . 

"Vice-president of the Golden Mint House, Alexey Vyazovsky, said in an interview with Pravda.Ru that China increases gold reserves without far-reaching plans just because gold is "eternally valuable." However, the expert did not exclude the appearance of the so-called golden yuan."
My added comments:

First, a thank you to Bill Holter for finding this interesting article. Mr. Holter handles this article in a responsible way by noting that the report comes from a source many will not trust and that the claim of 30,000 tons of gold reserves is not verifiable. He does a good job, however, of asking why Russia would run this article unless they are laying the groundwork for a big announcement on gold reserves by China (perhaps later this year). Here are his thoughts on it:

"I believe there are several questions needing to be asked. Is this a "30,000 ton bluff" by Russia? I don’t think so but if it is, what is the upside? Would Russia really throw this figure out publicly without clearing it with Beijing? Would China really bluff about how much gold they have? My opinion is no, they would not. I have said all along I believed China would announce their holdings probably this year. If this is the "pre pre announcement", it is a very big number and one I believe only as an opening salvo. Should China themselves make this announcement, please understand the "golden nuclear bomb" this would actually be."

This is part of what we will continue to follow here on the blog. So far, we know that China is buying up large amounts gold worldwide. We know that the IMF will decide on whether or not to add the Yuan into the SDR basket later this year. We know China wants more voting power at the IMF and has led the initiatives to start up both the new BRICS bank and the AIIB (Asian Infrastructure Investment Bank). All of these facts tie together in some way, but exactly what China plans to do in the future is not clear yet. Here are the main theories I see out there while researching this topic:

1- China wants to gain influence within the IMF and wants the Yuan added into the SDR currency basket. It is buying gold because it has less gold than the western nations and must have the gold to improve its position when a monetary reset (change in the rules of the game) takes place. This is the Jim Rickards view.

2- China plans to abandon the IMF and do away with the US dollar as global reserve currency. They are buying gold to back the Yuan with gold and then replace the US dollar as the leading global reserve currency. They will use the new BRICS bank and AIIB to basically overthrow the western led global financial institutions (IMF and World Bank). Some gold advocates hold to this theory.

3- Here is a new one I have seen lately. China is buying gold in order to get the Yuan into the SDR basket, but perhaps has plans with Russia to takeover the IMF and replace the US and the EU nations as head of the IMF. I have not seen any tangible evidence that supports this theory, but it has shown up lately on some alternative media sites.

One thing is pretty clear. China is buying a lot of gold for some reason. They own a lot more gold than they have acknowledged in public documents. So far the evidence I see doing research for the blog is more supportive of theory #1 listed above. We'll continue to follow it here. We should know quite a bit more by the end of this year.

Added note: Want China Times ran this article recently also talking about 30,000 tons of gold.

Important additional update 5-26-15: Koos Jansen writes this article about this story making the rounds on the internet saying China may have 30,000 tons of gold. Koos says there is no credible source for this estimate and gives a detailed explanation of his reasons for saying that. Koos is considered an expert on the Chinese gold market so you should read this article in conjunction with the reports above on how much gold China may have. Again, I suspect no one except China knows for sure how much they own officially and how they plan to use the gold.

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