Friday, November 23, 2007


Reading of the prospect that India may increase their gold % of reserves somewhere around 10% and having only 3.6% now prompted me to read and find the latest numbers which are in the link below.
The WGC numbers are highly suspect, but I think that's all we got to go on.
There have been no physical independent audits to confirm their accounts.
It's no different from you telling your own banker that you have a $500K home, a 106' yacht valued at 250K, and 300K in K-Rands. But, the deal is the banker must take your word for it, and not be permitted to see any evidence of your possession. This works for you every time as you own the bank, too.

Anyway, whether India adds gold or not doesn't bring much excitement. What is unnerving, however, is that both Mexico and Canada HAVE virtually NO GOLD!
They both have mining production that could be grabbed at any time in the "national interest". China's chugging along way below its peers. Understanding that central bankers are the most secretive cabal on earth. They will readily lie, misdirect, omit, deceive, embezzle, and otherwise use any means to conceal from their citizens what the real balance sheet is. It is done to protect themselves, and really has little consideration for the people's welfare of the host country.

The complication at this juncture as I see it, Paulson is having a tough time to convince Red China to join the club and jump on the debt wagon by hocking their citizen's future wealth now.
The obstacle the international bankers are bumping into is that China is not a land of free people. Do not be mislead that Mao's "Great Democracy" meant freedom for the peasants any more than the People's Liberation Army (PLA) liberated those same souls! It's enslaving them, and there are widespread street demonstrations in China every day. Should the spotty unrest intensify and pick up steam you'll see Tiananmen Squares pop up everywhere. That's how the Chinese handle their criminal governments. Here's what "democracy" means to the Chinese.

So, how China handles that paltry .9% gold reserves will be something to behold! This compares with the US Treasury which claims that over 75% of its foreign reserves are in physical gold! Remember Ron Paul's experience on the Reagan Gold Commission? He and his Presidential commission was not even permitted to see the physical gold! And, the caveat here is that the Chinese have a heritage with a strong affection for silver, too!

No, at one time we thought maybe the Chinese would simply buy up America's economic infrastructure using Wall Street., and achieve a re-balancing of their reserves in that fashion. But, logic is ringing in my head asking why would they do that and bid against themselves on the stock market bourses? Doesn't make sense to drive up the price of something you want to buy!

It makes much more sense to buy up America, yes, but at much lower prices. China has more to think about than Chuckie Schumer braying about the yuan's value. China needs to remain competitive with India, and the other blossoming Asian economies. Schumer's finding his own demagoguery frustrating as the US economy is not the same economic powerhouse when he and his ilk first came into the Senate.

If China decides to go the gold reserves route and be 'respectable' with 10% of their $1.2Trillion reserves in gold then they'll have to go to $12B or thereabouts. The US$ price used for this report was $716 thereabouts for September 14th. Keeping with the $1.2T total reserves, the existing 600 tonnes, and the $716 gold price China's goal for additional tonnes would be 4,637. Annual worldwide production has been 2,500 tonnes and declining. China's estimated gold production for 2007 should exceed 200 tonnes. So, if that's the direction they want to go, the remaining unknown is over what time period?

What are the drivers to influence China's urgency for implementation - probably the degree of devaluation of the US dollar as that's what about 70-75% of their existing forex reserves are parked in. Although with all paper monies now losing against gold, they may be moving their paper chips closer to the edge of the table.

If any resist they can always fall back on another American creation - Gunboat Diplomacy. / value

1 comment:

Anonymous said...

The Jews and the neo-con puppets fear China for a variety of reasons.

China is a racially aware society.

It's a dictatorship, so can employ it's enormous resources without let or hinderance.

It's oriental - which means that they are on the Jews wavelength and therefore are very difficult to gull (compare with the infinately gullible Western goyim).

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