Thursday, January 16, 2014

Gold News January 16 , 2014 - China's relentles accumulation of gold and th curious case of Germany M.I.A gold ( MIA from France and US Central Banks ) getting more coverage as German concerns regarding gold manipulation become more active and visible .....Even Glenn Beck has caught on to gold manipulation and Germany missing gold !

( This seems a tad low , but take it for what it's worth. Could simply be what China is willing to acknowledge having at this point in time.... )

16 JANUARY 2014

China Claims To Already Have the Third Largest Gold Reserves in the World

It should be noted that this report is sourced from 'ScrapMonster.' I have found it on the webpage for the Shanghai Metals Market. The numbers in this article do not agree with the latest reports from the World Gold Council, which by the way is hopelessly out of date. 

More importantly, there is no IMF report that I have been independently been able to find that discloses this information.   If this is true, then it is quite the news piece. 

Let's see if the Chinese confirm or deny, or more likely, continue to say nothing and buy.

Here is a recent news item about this controversy from Bloomberg:
"After adjusting for net imports from Hong Kong and domestic output, the figure is closer to 5,086 metric tons [central bank holdings plus private gold holdings]. When taking away gold uses for jewelry, industrial and other categories and adding implied bar demand to central bank holdings, the figure is likely closer to 2,710 mt.

"China would need 10 years for its gold holdings to catch up to the U.S., based on adjusted Chinese consumption for jewelry, industrial and other uses and using implied bar demand as the primary driver of incremental central bank additions. Based on run rates during 2013, China may have added 622 metric tons of bars to its central bank holdings, after adding 380 mt in 2012."

This news item below is purportedly what China is willing to 'officially report,'` that they have expanded their official gold reserves by 76%, to 2,710 tonnes.   If this is accurate then China is now just behind the US and Germany, which say that they hold 8,133.5 and 3,391.3 tonness respectively.  China has already surpassed Italy and France. 

Given the 2,710 tonne figure I have to wonder if the author of the Scrapmonster piece picked it up from Bloomberg and then ran with it.  It would make some sense, although Bloomberg does not mention anything about the IMF.

There is some controversy regarding the disposition of Germany's gold, much of which is held outside that country, as you would know if you frequent this cafĂ©.  More on that later.

 Privately there is a great deal of speculation that the heavy flows of gold through Shanghai are not merely going to the public market in China, but are also helping to fill their central bank reserve vaults even further than they will admit. 

As you may recall, China is encouraging its people to place some portion of their personal wealth in precious metals.

It is easy to sneer at goldbugs, those who find a refuge from abusive monetary policy in the traditional safe haven of precious metals, but it quite another thing to tell the 800 pound gorillas in the global market, China and Russia among them, that they do not understand anything about risk and money. 

Agree with them or not, they are making their case for what they think will happen in the future of global money, and are putting some of their own sizable wealth down on the table to back it up.  And if the models of a few academic economists do not agree with them, they really do not care.  They have their own economists, and their own interpretations of history, and their own needs and agendas.

And there are other countries who are now desperately seeking to bring their gold home from the custodial storage in New York, which is an artifact of World War II and the Cold War.  And some of them, like Germany are finding that it is not so easy to persuade the New York Fed to return it.  We can only wonder why.

These are central banks, who seem to be managing their national affairs with quite an informed and determined outlook towards the future. To completely ignore the implications of this, which to me seem quite clear, is nothing short of willful blindness.  If we just shut our eyes and say no, then the change will not affect us.  Except that the smart money is already on the move behind the scenes.

There is an ongoing debate happening now among the nations' bankers about the suitable replacement for the de facto Bretton Woods IIarrangement which bases global trade settlements on the fiat dollar, no longer tied to gold since Nixon made a unilateral decision to shut the gold window.   They have made public statements about what they would prefer to see adopted, and Russia made this discussion a formal topic during its G20 chairmanship last year.

It has been a long time coming. But change is going to come. It always does.  And it may wash over those who stubbornly refuse to even admit that it is happening.

Shanghai Metals Market
China Expands Gold Reserves, Surged Past Italy & France in Ranking
By Paul Ploumis
Jan 15, 2014 08:36 GMT

BEIJING (Scrap Monster) : Claiming to have vaulted France and Italy in terms of gold reserves, China has announced that they have expanded their gold reserves by 76 %, thus becoming 3rd largest gold reserves in the world. According to the voluntary reporting system of IMF which monitors international gold reserves, China’s gold reserve have increased from the last reported holdings of 1,054 Tons in 2009, April to 2,710 metric tons currently.

China claims to have surged past Italy which has current holdings of 2,451.8 tons of gold reserves followed by France having 2,435.4 tons. The accurate reports released by the World Gold Council Data has placed US at the first position of world ranking for holding largest gold reserves which is 8,133.5 tons. The percentage of foreign reserve in gold in US is 75.1 %. Germany holds the second position with 3,391.3 tons of gold reserves.

In order to acquire the position, the Central Bank of China had added 622 tons of gold last year which was a massive boosting from the 380 tons of 2012 estimate. China had surged several nations to become the largest producer of gold. It has boosted its gold reserve without purchasing gold from global bullion market. While most of the major gold producing nations are reporting the decline of production, China remains to increase the production.

More from Jesse......

Top German Regulator Says Currency and Precious Metal Rigging 'Worse Than LIBOR'

The 'free markets' are permeated by frauds, many of them perpetrated by the Banks, which affect the price of transactions in liquid markets.  

What a surprise.

Did someone forget to offer Frau Koenig a post-government job in Private Equity?

In fairness, I can definitely see this managed as a 'limited hang out' public relations operation with some fines put forward for front running the London fix, but the great bulk of the abusive price rigging in the futures markets left untouched for confidence and the 'good of the system.'

I think the real issue will be the unfolding inventory scandals if they lose control of the great shell game.

Metals, Currency Rigging Worse Than Libor, Bafin Chief Says

By Karin Matussek and Oliver Suess
Jan 16, 2014 2:04 PM ET

Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.

The allegations about the currency and precious metals markets are “particularly serious, because such reference values are based -- unlike Libor and Euribor -- typically on transactions in liquid markets and not on estimates of the banks,” Elke Koenig, the president of Bafin, said in a speech in Frankfurt today.

Koenig is the first global finance regulator to comment publicly on the investigations as probes into the London interbank offered rate, or Libor, expand into other benchmarks. Joaquin Almunia, the European Union’s antitrust chief, said yesterday that its preliminary probe into possible foreign-exchange manipulation covers similar practices as in the regulator’s probe into Libor-rigging...

Bafin interviewed employees of Deutsche Bank AG as part of a probe of potential manipulation of gold and silver prices, a person with knowledge of the matter has said in December. The U.K. finance regulator, the Financial Conduct Authority, is also reviewing gold benchmarks as part of its wider investigation into how rates are set...

Read the original article here.


Comex Warehouse Potential Claims Per Deliverable Ounce Rises to Historical High 112 to 1

"The false man is more false to himself than to any one else.  He may despoil others, but himself is the chief loser. The world's scorn he might sometimes forget, but the knowledge of his own perfidy is undying."

Horace Mann

An almost shocking decline in deliverable (registered) gold has taken the ratio of open interest to deliverable gold to 112 to 1.

This is not a default scenario since the supply of eligible gold in the warehouses remains adequate and at historically manageable levels as shown in the last chart below.

Rather, it suggests that higher prices will be required to persuade more bullion owners to place their inventory up for delivery.

That higher price, of course depends on who those owners are, and how motivated they might be by profits from their metals trades.  For some interested parties it is enough to be the very close friends of the Central Banks, with benefits that make them incredibly rich, self-satisfied, and occasionally audacious to the point of over-reaching.

But of course, it is well to remember that the Comex has become the tail wagging the dog, as the gold bullion markets have shifted to the East.

February may be an interesting month, in an interesting year.

Weighed, and found wanting.

Stand and deliver.


Why is Germany harassing the U.S. government about gold?

4:47p PT Thursday, January 16, 2014
Dear Friend of GATA and Gold:
Goldbugs long have been inclined toward the paranoia evoked by the apocryphal story about the two psychiatrists who passed each other in the hallway of a mental hospital: One said "hello" and the other thought, "I wonder what he meant by that."
Of course the first psychiatrist may have meant only "hello," even if he was glad not to have to talk about the patient of the second psychiatrist who had been admitted for claiming to be Princess Anastasia and who, after extensive treatment, had learned Russian. But plenty really has been going on with gold behind the scenes for many years, and it is no longer paranoid to figure that Germany is playing a big part in it.
Indeed, that Germany is likely getting aggressive in the great gold game was signified by the dispatch from Bloomberg News on the speech given today by the president of Germany's Federal Financial Supervisory Authority, Elke Koenig, about the potential seriousness of gold and currency market manipulation:
This comes on top of the German Bundesbank's awkward and spectacularly unsuccessful but wonderfully publicized efforts to repatriate the gold it thought it long had deposited with the Federal Reserve Bank of New York.
Die-hard supporters of gold market manipulation -- that is, gold price suppression -- don't try removing their gold from the control of the perpetrators of price suppression. And surely the Federal Financial Supervisory Authority, an agency of the German government, knows that the investment banks it has acknowledged investigating are only intermediaries for the main instigators of gold price suppression, the Western central banks and particularly the U.S. government, whose rigging of the gold market is both a matter of accepted history into the 1970s and extensive documentation since then:
So Germany seems to be harassing the U.S. government about gold and making gold price suppression a little harder without quite pulling the plug on it, as almost any major government in the world could do by selling dollars and buying gold or by issuing a mere press release acknowledging the surreptitious policy.
Like the psychiatrist greeted by his colleague in the hallway of the mental hospital, we may wonder what Germany means by this. Of course Washington probably knows already, even if neither Bloomberg News nor any other mainstream financial news organization has yet quite worked up the courage to ask.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Talk show host Glenn Beck examines Fed's concoction of imaginary gold

8:16a PT Thursday, January 16, 2014
Dear Friend of GATA and Gold:
U.S. talk show host Glenn Beck last week commented extensively on what seems the inability of the German Bundesbank to repatriate much of its gold supposedly vaulted at the Federal Reserve Bank of New York. Beck notes that the situation implies the "rehypothecation" of gold -- the concoction of a vast imaginary supply. While Beck's program probably won't tell followers of GATA anything they don't know, it shows that suspicion of gold price suppression is spreading quickly now, as Beck quotes the German financial journalist Lars Schall's dogged questioning of the Bundesbank, publicized first by GATA, over the Bundesbank's assertion that Germany's gold bars at the Fed were melted and recast before being returned:
The segment of Beck's program about the German gold is 20 minutes long and can be viewed at his program's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

China acts as if gold is way undervalued, Leeb tells King World News

12:07p PT Thursday, January 16, 2014
Dear Friend of GATA and Gold:
Interviewed today by King World News, fund manager Stephen Leeb says China is acting as if gold is grossly undervalued and won't be for long:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Dramatic spike in gold will resolve disconnect between paper and metal, Hathaway says

11:30a PT Thursday, January 16, 2014
Dear Friend of GATA and Gold:
With commentary and charts posted at King World News, Tocqueville Gold Fund manager John Hathaway explains why he believes that "the resolution of the disconnect between paper and physical gold will be a dramatic upside repricing of the real thing":
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.