more complete answer on china gold reform
Message 15617885
april 5th 2001
GOLD is an opportunity when CHINA (and the moves are definitely starting) liberalizes its GOLD market (I got the first whiff of a GOLD mine privatization deal to work on) and allows its citizens to own GOLD in its pure MONETARY form (as opposed to expensive jewelry), the 200-year pent up fever will unleash a wild domestic GOLD party, supplemented by offshore smuggling. CHINA always goes to excess, whether in TV production, or orange growing.
Message 15619598
April 5th 2001
They do trust their economic prospects, and thus all the domestic investment and home purchasing, but do not trust any governments' promise to not debase the currency, RMB or US$.
Four thousand years of conditioning. They will not be able to help themselves when placed near deregulated MONETARY GOLD. That moment will be delicious, the panic will be inspiring, and world commodity markets will quake, marking the dawn of a new era. It will be the ultimate short squeeze.
Message 15839776
may 22nd 2001
The simpler and previously truer explanation is that the Peoples Bank of CHINA (PBOC, central bank) had always been the only buyer of MONETARY GOLD in CHINA, by law. As CHINA is planning on deregulating the GOLD industry, continuing banking reforms, and PBOC will be a seller of MONETARY GOLD to the general population from reserve in a few years time, it is not surprising that PBOC continues to stockpile more GOLD than required for official reserve when the getting is still good, and make a whopper of a gain later, partly to fund banking reform, partly to fund bonuses for a past monopoly job well done.
The complicated and newer reason may be well related to the US. I think Bush rhetoric, E3, and the earlier embassy bombing, has managed to energized the PRC hawkish camp at high enough levels to push through their agenda of military preparedness based on the argument “why take a chance? And besides, it is good for the economy”. This is a difficult argument to counter for the non-hawkish camp of leadership. And so, more missiles will get built at 1/3 to ¼ the generally accepted world cost, with 1980s rocketry and avionic technologies, supplemented by the occasional internet enabled nuggets of data.
What the CHINA hawkish camp in Beijing sees is that the US may make war necessary, however, the timing of the war is at China’s choice. Once both sides are prepared, strategy will allow a bloodless victory.
What the CHINA non-hawkish camp sees is that the development of China’s domestic continental sized economy will allow CHINA to achieve all that Japan has achieved, be a great power, without over-dependence on export and without mania derived from export earned liquidity, and able to ignore the US on most issues.
Message 16765678
december 8th 2001
Freedom of GOLD trading in CHINA, having had a satisfactory virtual trading (soft opening) period over the past month in Shanghai, will officially open in early 2002 (should be 1st of Jan, or at least within 1st Qtr). USD will get competition.
Message 17516752
may 25th 2002
Yes, but more importantly there are no MONETARY gold/silver available for sale; though I have seen folks in possession of old (pre-1949) MONETARY gold/silver tael (dumpling shaped ingot used to back Imperial and private paper money and bills of exchange).
Peoples Bank of CHINA (PBOC - central bank) sets the price of GOLD for all wholesale transactions between mines and jewelry manufacturers. Experimental GOLD exchange already opened and operational, but only for wholesale.
Retail MONETARY GOLD should open within 36 months, per WTO-driven impetus, and leading up to eventual Yuan convertibility.
Silver trading on Silver Exchange is free, and for wholesale only (I believe), Silver price in CHINA is 10-12% over international price. I have not seen MONETARY silver on market. I believe the issue is 'ease of storage'.
So, folks buy silver, GOLD and platinum jewelry. CHINA is now the leading importer of platinum, ahead of Japan, accounting for 1 mm of 3.5-4 mm of annual new extraction. Difference being a portion of Japan bound platinum is for trading purpose (bars, coins) and all of China's import gets turned into jewelry.
The future is bright:0)
Message 18371534
december 25th 2002
... I think the Yuan will embrace the USD until both go to the bottom, because China's needs are too great at the moment ... so many power stations, dams, roads, harbours, airports, factories, cities, homes, shops, McDonald's, etc remain to be built, and thus so much printing to be done.
I do not know whether both currencies will rise to the top again without resorting to GOLD backing, but suspect that we have not heard the last of MONETARY GOLD, because we are not that lucky to see the demise of a ancient MONETARY tradition.
I do believe the Yuan will eventually trade at a premium (relative to the current 8.25 Yuan:USD) and 10-15 years is possible, 20 years more than likely, 25 years for 99.98% probability.
More interestingly is the question whether, and if so, when the Chinese economy will overtake the US economy, first in PPP terms, and then in nominal terms.
Message 18371716
december 25th 2002
(b) I received bad news from CHINA via mobile that it is not possible to obtain the MONETARY GOLD bars w/ Year of the Sheep stamping in Beijing - all sold out, and so I have asked friends to try in Shanghai.
Message 18952021
may 17th 2003
Speaking of GOLD, we see nothing but good news that the world is vaguely aware of but not noticing as yet.
Chinese retail investors will be able to trade GOLD bars, wafers, and bullion, along side that other most noble of metals, platinum. This, together with the soon to be New York and Sydney IPO-ed exchange traded physical GOLD that is jointly sponsored by the World GOLD Council and The Hong Kong and Shanghai Banking Corporation (“HSBC”), means the paper GOLD hoard I have accumulated will now gain much liquidity, a lot of visibility, many imitations, and almost 24 hours a day and six days per week trading, just like my precious Softbank once was. I think GOLD will do considerably better than Softbank, while on the way up, and that is the only side of the graph we should care about.
Oh, yes, and the best of all, under establishment charter, the paper GOLD accumulated under the exchange-traded programs are backed physical ounce for paper ounce and are not to be leased to the other evil short-speculators.
Can you imagine the squeeze that may be coming our way, augmented by some of the biggest momentum traders in the world, the Chinese, who are terrified of their government’s fiat printing, and are no more happy with Greensputin’s dictate publishing.
Greensputin will be proven right, that GOLD will keep Central Bankers more honest than they are otherwise capable of or likely to.
A popular newsletter published by CLSA, written by Christopher Wood, titled “Greed & Fear”, has a target of USD 3,400 per ounce for GOLD in this new bull market cycle. I do not know where these guys pull the numbers from, but I will start to lighten up starting at USD 2,xxx:0)
The other popular newsletter, by Marc Faber, named “Gloom, Boom, Doom”, is also counting on GOLD as a savior, but does not give a target price, presumably because as GOLD becomes more precious and expensively priced, it becomes still more desired.
Message 19591980
december 13 2003
Today, I tried to buy some GOLD in Beijing after finishing lunch in a mall (I had Mogolian Hotpot for lunch).
I asked the shop clerk at jewelry store in the same mall where I could buy some GOLD coins or bars, and she unhesitatingly referred me to a shop two blocks down in a pedestrian street in WangFuJin (one of many shopping districts), to a place in Dong An Market.
I bought a 20, 30 and 50 gram bar of 99.99 GOLD, and the per gram cost is RMB 115, with (I am told) 31.15 grams to an ounce. I paid with my credit card which is strange, because in Hong Kong, MONETARY GOLD can only be paid for with cash or personal check or bank draft.
The little but hefty bars were quite adorable, tightly wrapped in a thin layer of shrink wrap plastic film that still allows the coolness of the metal to seep through during fondling :0)
I talked with the shop clerk and they tell me the MONETARY GOLD bars are quite popular, and they believe they will sell much more when a repurchase system is in place.
There were bars as massive as 250 grams. There were 1/2 to 1/10 ounce Panda GOLD coins, but there were no 1 ounce coins ... all sold out (I think the mintage for 1 ounce coins is only around 30,000 per year, so far since 1983.
Message 20802350
november 26th 2004
On any MONETARY GOLD bars in CHINA, the premium is 20% over the USD price of GOLD outside of CHINA, and so ...
Message 22506224
june 2nd 2006
MONETARY GOLD in CHINA retail shops are still going for 20% above equivalent GOLD selling in HK retail in banks (spot + 1.5%)
Message 22784243
september 5th 2006
CHINA retail market for MONETARY GOLD (bullion and bars) developing nicely ... soon selling back to shops & banks by individuals will be do-able, thus making more folks willing to buy and hoard
i am hoping that the japanese economic recovery gains traction, so that they will eat more GOLD specks and flakes with sushi as in the good old days of USD 75,000 per square inch of land :0)
a flake a day keeps the GOLD bears away :0)
Message 22953168
october 28th 2006
... yes, but perhaps not in the sense you mean. The CHINA banking officialdom actually has been working to deregulate the GOLD market over the past 5 years and aiming to popularize the private ownership of GOLD for all the good reasons.
The road markers of GOLD reform had been:
- legalized ownership of MONETARY GOLD (done)
- expand private and public processing of MONETARY GOLD (bars, wafers, coins) (done)
- legalize institutional trading of MONETARY GOLD (done)
- open GOLD exchange (done)
- institute sale of GOLD at retail level (done)
- institute buy-back of GOLD at retail level (done)
- IPO GOLD mining companies (done, and more on way)
- Openly discuss upping the allocation of forex reserve towards GOLD (happening now)
There is no excuse for not reading the writing on the wall!
Message 23159812
january 6th 2007
The observable facts are:
CHINA have been de-regulating the GOLD market, progressively, setting up exchanges, and successively allowing various classes of traders to participate -- so it must mean the officialdom see some sense to it
CHINA does retail MONETARY GOLD (bars, bricks, wafers, coins) at the street level shops -- there must be end-hoarder demand (especially in view that up until recently (Jan 2006) the shops did not buy back gold
CHINA does save a lot -- 40% of active income
Chinese banks are fragile, though folks do have some faith in the system, counting on officialdom to make good on any losses via money printing
Chinese do know the value of hard money and the fate of paper money
Recommendation: accumulate GOLD, for it just got cheaper, and get ahead of the majority of future hoarders -- it is the natural trade of the century
Message 23376653
march 16th 2007
and since CHINA does not export GOLD, the spirit of the decree will be to encourage the import of gold
they are just getting ready for the eventual de-coupling to the USD, since there will be no point being linked to failure, and
and they are preparing for the rise of the inevitable new world MONETARY regime, given that the existing one will fall apart
think of it, argentina on a global scale - we will be fortunate to be able to have ring side seats to witness the teachings
but first, zimbabwe on a global scale - we are luck to be blessed with the learnings
Message 23418885
march 31st 2007
total mined GOLD since beginning of time, a long time ago, by my notes, source unkowable ("Power of Gold" by Peter Bernstein, I believe), is ...
a cube with 20-metre (65ft) sides = 153,000 tonnes = 153,000 x 35,273 oz = 5.4 billion oz @ USD 650/oz = USD 3.5 trillion
... averages to be less than 1 oz of excess mineralized savings per soul which = a tiny fraction of the surplus funds that will be looking for salvation from the event singularity that ought to take place after the dark interregnum which we shall code name "MONETARY RESET".
My comment to the foolish radio show guy is just this, "there are two and half trillion of ever worth-less fiat paper derived and massless electronic blibs on the computer screen of Greater CHINA and Japan CBs alone, and offsetting that is ONLY USD 54 trillion of unfunded US FEDERAL OBLIGATION, alone"
So, plugging the trusty HP12C with 54 Trillion enter, 5.4 billion Oz divide, to monetize only the whole of US FED obligations today, right now, I get USD 10k per oz for the floor value of GOLD, the true and only money, in God We Trust.
Footnotes:
- an ounce of GOLD into a wire 50 metres in length
- a tonne of GOLD could be stretched to the moon and back
Message 23720905
july 21st 2007
Now, as energy is a bull market play, GOLD is a bear market act.
Imagine the planet’s private and sovereign paper wealth that must find a secure hideout from what is more than likely to be a cataclysmic and biblical financial storm, and you would actually consider shorting black GOLD against true GOLD.
GOLD is the very supply-limited financial parachute in a world where the MONETARY system is about to blow up.
GOLD is so very inexpensive, still.
I just held a phone conversation with my 34 months young toddler daughter, Erita the Coconut, who is now in London, checking out the museums and shops. She has just arrived from Italy, after two weeks play, for one more week of play. The holiday is so far reasonable, if only because I was light USD for so long.
“Erita, dada miss you”
“Dada, come to London”
“Erita, dada is working”
“No, dada; come play with Erita”
“Coconut, you play with Aroonie and Lassamie, then come to dada”
“Ok”
I do not want to have to answer my daughter’s question one fateful day, “daddy, why did you not buy gold?”.
I believe we are entering a period when cash is king, and GOLD is emperor.
GOLD has no equal. That is a belief of mine, and the belief will be tested, and be validated, says I.
Message 25615261
may 2nd 2009
additional point, one can simply state china inc's simple message by its announcement which under normal circumstances would not have been necessary, the message must be taken in context of the 15 years GOLD ownership/trading reform (starting from from illegalized private GOLD ownership to now, one can visit retail monetary GOLD shops beijing) and the message may well be,
we are preparing for the inevitable end of global reserve currencies operated by the usa republic, japanese empire, and european mishmesh, and, as we invented (i) paper, (ii) ink, (iii) printing press, and (iv) use of paper money, and have seen to more dead money regimes then there are trees in a forest, we are taking precautions.
when the bell tolls, we aim to have our middle class holding something, anything, other than usd.
we have been systemically reforming the GOLD arena, and adding to GOLD hoard. we have been doing so in secret, and when necessary, doing so by way of the now largest national exploitation of GOLD on this planet, so there is no use for you out there to front run us.
we are announcing our program now, and especially to the wastrels and agents of wastrels out there who needs paper money, such as greece, ireland, england, australia, and jpm and gs, because we want you to know that we are a buyer who can close enormous deals on short time;
so stop mucking around with dribs of GOLD sales and drabs of GOLD loans. come to us, we will make a price, let us do business.
about that 403 or 2500 tons of imf GOLD, and regarding the tens of thousands within eu, and even, folks, whatever there are available in fort knox, all not a problem, because just 6 months of our surplus and a bit of our existing reserve would take care of all.
hand us our rightful GOLD with your trembling hands, and redemption shall be yours.
we are doing copper, as all know. now we are telling you we want GOLD. silver smuggling into our domain is already big biz. platinum as well. we like minerals. we have paper. what you are doing is great, enabling our paper to buy your minerals.
biblical times are coming, probably of the older edition, old testament, and so, before it is too late, let's talk biz.
cheers, j |
