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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: bull_dozer who wrote (189305)	6/27/2022 6:22:42 PM
From: TobagoJack	Respond to of 217561

Re <<Gold>> Intending to re-watch ... Rhodes Center Podcast: What if I told you that international money is...3,675 views Jun 24, 2022 What if I told you that international money is governed by no more than the beliefs of a handful of super-connected global elites…and yet there is no conspiracy. Would you be interested? There’s a standard story economists and historians use to explain the global economy over the last 100 years: there was the gold standard, which gave way to the Bretton Woods system, which gave way to “neoliberal globalization”. But on this episode of the Rhodes Center Podcast, Mark talks with someone whose work challenges this story by attacking its foundational myth with deep archival work. James Ashely Morrison is an associate professor of International Relations at the London School of Economics and Political Science, and author of the new book England’s Cross of Gold: Keynes, Churchill, and the Governance of Economic Beliefs. In it, he recounts the fight over Britain’s return to the Gold Standard after World War I, and comes to a bold conclusion: there never really was a “gold standard” – at least, not as we understand it. As James makes vividly clear, the “gold standard” was always more of an idea about a perfect state of the world, rather than an economic reality. As such, fights over it have always been less about actual monetary policy, and more about how people believe the economy is supposed to work. James’ work not only adds depth and nuance to this misunderstood turning point in 20th century economics. As he and Mark discuss, it also forces us to reconsider so many of the more contemporary stories we’ve been told about how our economy works, and why. Learn more about James’ book England’s Cross of Gold: Keynes, Churchill, and the Governance of Economic Beliefs. Watch the talk James’ gave at the Rhodes Center this Spring.https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqbXpFdDRXYUUtWjEyMXRtcUdhWFJ4R3MtVmItd3xBQ3Jtc0tsS1VvZGtja1Z4bDA1cHBCT3VVYXdjU0RPMXVOTGszVjZ6bXlqaXlZdXVFQ2EzMXk1U01JUTRKVmk0ZXNQOTlFamVIeU02WmpseUVoZE9ub1Nmbm1LUXJfb0JIMWNYYV92U2VwUTR2U3JaVjRwRXFjWQ&q=https%3A%2F%2Fwatson.brown.edu%2Frhodes%2Fevents%2F2022%2Fjames-ashley-morrison-englands-cross-gold-keynes-churchill-and-governance-economic&v=_Gqn4WWvvNM

To: bull_dozer who wrote (189305)	6/27/2022 6:22:51 PM
From: TobagoJack	Respond to of 217561

Gold, at this juncture, is 'just' stable, ignoring nuclear this, WWIII that, etc etc zerohedge.com Michael Burry Agrees: "Bullwhip Effect" Will Force Powell To Pivot On Rate Hikes And QT In the past month we showed readers on at least two occasions... Bullwhip Effect Ends With A Bang: Why Prices Are About To Fall Off A Cliff Deflationary Tsunami On Deck: A "Tidal Wave" Of Discounts And Crashing Prices ... what happens when the infamous "bullwhip" effect strikes and what was formerly a scarcity of inventory becomes a glut, with inventory to sales ratios exploding higher (and in some cases reaching two-decade highs)... [url=][/url] ... assuring inventory liquidations across the retail sector, resulting in a " deflationary tsunami" and " prices falling off a cliff", forcing the Fed to eventually pivot on its hiking plans and even restart easing. Of course, not everything is set for a deflationary crash: don't expect luxury items to see price cuts, and if anything, luxury prices for things like handbags and shoes are poised to keep climbing. But while inflation is likely to persist in the ultra high, the implication for broader inflation is clear: as we said two weeks ago, "most prices that make up the core CPI basket are about to fall off a cliff in weeks if not days, with upcoming core CPI prints set to plunge, which means that the only thing that will remain red hot is headline inflation, i.e., food and energy prices, the same prices which the Fed has traditionally ignored. It remains to be seen if it will do so this time around, or if - realizing that the US is entering a recession - it will resume easing even in the face of $5 gas prices..." Today, none other than the "Big Short" Michael Burry, founder of Scion Asset Management, picked up on this and tweeted that the “Bullwhip Effect” happening in the retail sector will lead to the Federal Reserve reversing rate increases and its Quantitative Tightening policy. [url=][/url] We only wish that instead of linking to some CNN story about retailers considering letting customers keep items they return rather than having to take the items back and add them to already bulging inventories, Burry had linked to us but we'll still take it. It's not the first time in recent months that Burry has raised concerns about the economy. In May, he tweeted that the current market conditions are "like watching a plane crash."

To: bull_dozer who wrote (189305)

6/27/2022 7:14:41 PM

From: TobagoJack

1 Recommendation

Recommended By
marcher

Respond to of 217561

Re <<Gold>>

the truth might become more important in a little more while

Considered these reads

OG get-go Message 31024112

Today
ING piece Message 33898384

Return to QE Message 33898365

International conflict and international money Message 33898366

Am pondering as Gold might become more important, especially if more explicitly linked to Global South Energies, Resources, Food, and Industrial Capabilities / Capacities, Populations, yearnings, and and and

Whether ten, 15 or 30,000 tonnes, there is no way China can declare such large holdings. Not yet anyway – it would cause an unwanted surge in both the yuan and the gold price. The government's $3.2trn of US dollar foreign exchange reserves would be devalued.

footnote: US$ reserve is ~1T, rest in other currencies just as good / bad depending on PoV

I remain agnostic on China gold holdings level and intent, but have been in watch & brief mode since long before I joined SI

I have always enjoyed en.wikipedia.org Dominic Frisby's creations

WWIII begins. GDX negative on the day.
— Dominic Frisby (@DominicFrisby) February 24, 2022

moneyweek.com

China almost certainly owns more gold than the US – here’s why that matters

China almost certainly owns a lot more gold than anyone else – including the USA. But how much? And why does it need so much gold? Dominic Frisby explains.

Dominic Frisby
3 Mar 2022
If you thought the West was unprepared for inflation – or indeed for Russia – wait and see just how unprepared it is for this bombshell.

This is the biggest story in world finance, and yet nobody, bar your intrepid blogger, is reporting on it.

For those without the attention spans to read all the way to the end, let’s cut to the chase and get the main point out upfront: China has more gold than the United States.

Why China might want to own a lot more gold than it’s admittingWe’ve seen many examples over the last few decades of how the United States weaponises the dollar, exploiting its status as global reserve currency.

The sanctions on Russia and its removal from the Swift messaging system this week are perhaps the most dramatic example of all. Russian civilians have had their wealth decimated (in fact, probably significantly more than decimated for most) almost overnight.

China will be surely watching all of this, learning from Russia’s mistakes and thinking it needs to de-dollarise as swiftly and discreetly as possible. Whether to protect its citizens’ wealth or its national interests, China cannot be beholden to a banking system that is run by the West – the US especially – and which is one of their weapons of war.

Both Russia and China have known they must de-dollarise for some considerable time, which is why both have been so steadily increasing their gold holdings.

Let’s start with Russia’s gold. The chart is courtesy of Nick Laird of goldchartsrus.com and it shows the Russian Central Bank’s accumulation to today’s figure of, give or take, 2,300 tonnes – roughly 74 million ounces (there are 32,150 troy ounces in a tonne).

That makes Russia, according to official figures at least, the fifth-largest gold owner in the world.

The table below, courtesy of the World Gold Council, shows the top 19 owners of gold, also their foreign exchange reserves and their percentage allocation to gold. The US has the most – 8,134 tonnes – followed by Germany, Italy, France and Russia.

The UK sits proudly in 17th position. Behind Kazakhstan, Turkey and Uzbekistan. Thank you Gordon Brown.

	Country	FX reserves $m	Total reserves $m	Gold holdings %	Gold reserves Oz (m)	Gold reserves (tonnes)
1	USA	239,485	695,225	65.55	455,741	8,133.5
2	Germany	99,513	287,732	65.41	188,219	3,359.1
3	Italy	83,583	220,966	62.17	137,383	2,451.8
4	France	102,439	238,954	57.13	136,515	2,436.4
5	Russian	485,462	614,255	20.97	128,793	2,298.5
6	China	3,264,064	3,373,233	3.24	109,169	1,948.3
7	Switzerland	1,019,165	1,077,439	5.41	58,274	1,040.0
8	Japan	1,358,141	1,405,543	3.37	47,402	845.9
9	India	598,057	639,736	6.52	41,679	743.8
10	Netherlands	28,229	62,547	54.87	34,318	612.4
11	Taiwan	544,899	568,636	4.17	23,7367	423.6
12	Kazakhstan	13,407	35,664	62.41	22,257	397.2
13	Turkey	81,176	103,186	21.33	22,010	392.8
14	Uzbekistan	13,070	34,558	62.18	21,489	383.5
15	Portugal	11,606	33,042	64.88	21,436	382.6
16	Saudi Arabia	465,059	483,161	3.75	18,102	323.07
17	UK	175,879	193,265	9	17,386	310.3
18	Lebanon	19,430	35,501	45.27	16,072	286.8
19	Spain	75,479	91,256	17.29	15,778	281.6

The country we are focusing on today is the one in sixth place on that table, China.

Here’s why China’s gold reserves must be far bigger than official data suggestsFirst, consider China’s US dollar holdings – over three trillion of them. That’s more than the UK’s annual GDP. Its US dollar holdings eclipse those of every other nation; China is not going to want those to go to zero – not yet, anyway.

Then consider its gold holdings. It has 1,948 tonnes, barely 3% of its foreign exchange reserves. The US’s gold holdings equate to over 65% of its reserves.

What if China were to approach that level?

Well, my argument is that China has much more gold than it says it does.

There are two parts to this argument. First, China’s gold mining. In 2007, China overtook South Africa as the world’s largest gold producer. It has remained so ever since. This past decade it has produced about 15% of all the gold mined in the world.

Since 2000, China has mined roughly 6,830 tonnes. Over half of Chinese gold production is state-owned – the China National Gold Group Corporation alone accounts for 20%. And China keeps the gold it mines – the export of domestic mine production is not allowed.

I say that number again: 6,830 tonnes. Already that official 1,948 figure looks very dubious.

With reserves in decline at home, Chinese mining companies have also been buying assets abroad, across Africa, South America and Asia. International production exceeds domestic production – by about 15 tonnes in 2020.

Second, there is the fact that, as well as being the biggest producer, China is the world’s biggest importer. Gold imports via Switzerland and Dubai are not always declared, but we do know that via Hong Kong alone, over 6,700 tonnes have entered the country since 2000.

Add that to cumulative gold production since 2000, and you get a figure over 13,500 tonnes.

Whether imported, mined or recycled, most of the gold that enters China goes through the Shanghai Gold Exchange (SGE), including the gold imported from Hong Kong. So SGE withdrawals – for which we do have numbers – can act as something of an approximation for demand. And it is possible to get numbers for SGE withdrawals: since 2008, almost 22,000 tonnes have been withdrawn from the SGE.

Then we have to add gold held in China, whether as bullion or jewellery, before 2000. The World Gold Council estimates a figure of 2,500 tonnes in privately-held jewellery. Added to domestic mining and official reserves, you get a figure of around 4,000 tonnes.

Cobble it all together – cumulative production, imports and existing stock – and you arrive at a figure not far off 31,000 tonnes.

I’ve spoken to some of the world’s top analysts – Ross Norman, Bron Suchecki and Koos Jansen – and they all arrive at similar estimates. Alasdair McLeod of Goldmoney thinks it is higher still.

So why would China keep its gold reserves quiet?But there is more, as Ross Norman points out.

Not all gold entering China is accounted for by SGE withdrawals. The People's Bank of China (PBOC), the central bank, likes to buy 12.5kg bars, which do not trade on the SGE. The PBOC often uses dollars on exchanges in London, Dubai and Switzerland, while the SGE sells its gold in yuan.

The Chinese army, too, owns gold and does not have to declare its purchases. And there are other state agencies, as well: the State Administration of Foreign Exchange and China Investment Corporation – the sovereign wealth fund, for example.

How much of this gold is state owned? Norman guesses 50%; Suchecki, formerly of the Perth Mint, says 55%.

At 50%, the implication is that China owns over 15,000 tonnes – closing in on double the US.

“Chinese Central Bank gold holdings have apparently been entirely unchanged since mid-2019 at 1,948 tonnes,” Ross Norman tells me. “But few of us believe that. Put an additional zero on the end (19,480 tonnes) and I should not be surprised if that is not much closer to their official holdings”.

Alasdair McLeod goes one stage further. “The PRC probably has as much as 30,000 tonnes hidden in various accounts, but not declared as official reserves”.

Whether ten, 15 or 30,000 tonnes, there is no way China can declare such large holdings. Not yet anyway – it would cause an unwanted surge in both the yuan and the gold price. The government's $3.2trn of US dollar foreign exchange reserves would be devalued.

“I don’t think China needs to brag about its largesse,” says Norman. “After all, a stronger currency as a result of that reserve backing would be counter-productive, as it would confer competitive disadvantage”.

What’s more, to declare so much gold would be a direct challenge to American supremacy, which China is probably not yet ready for. Parity first, then supremacy.

For now they follow Deng Xiaoping's doctrine of “we must not shine too brightly.” Its declared 1,948 tonnes is, perhaps, the bare minimum it could declare and look credible. But a mere 3% of China’s forex reserves in gold? Pull the other one.

If China decides to weaponise money, as the US has done, all it has to do is declare its gold holdings, perhaps even partially back the yuan with them. Talk was, at one stage, its central bank digital currency (CBDC) would be partially gold backed.

Unbacked Western money risks losing a great deal of its purchasing power in such an event. To back Western fiat even partially with gold would mean a dramatic upwards revaluation of gold – into the tens of thousands.

But that is the card China now has with its 20 years of relentless accumulation. He who owns the gold, makes the rules.

Dominic’s film, Adam Smith: Father of the Fringe, about the unlikely influence of the father of economics on the greatest arts festival in the world is now available to watch on YouTube.

To: bull_dozer who wrote (189305)	6/30/2022 4:15:46 PM
From: TobagoJack	Read Replies (1) \| Respond to of 217561

Am unsure if Team Zimbabwe accepts bitcoin as legal tender. The Team was discussing the issue. Team Zimbabwe decided on Gold in the meantime. Likely because Gold is not bitcoin. aljazeera.com Investors excited by Zimbabwe plan to mint gold to curb inflation President Mnangagwa is reportedly desperate to shed some of the legacy economic problems his administration inherited. Chris Muronzi Harare, Zimbabwe – Zimbabwe is set to introduce gold coins that will enable investors to store value within the country as inflation spirals out of control and the local currency continues to rapidly devalue against major currencies. The move comes after inflation for June jumped to 191.6% from 132% in May. In a statement on Monday, the southern African country’s central bank chief John Mangudya announced the new gold coins would be available through normal banking institutions. “The Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) resolved to introduce gold coins into the market as an instrument that will enable investors to store value,” Mangudya said. “The gold coins will be minted by Fidelity Gold Refineries (Private) Limited and will be sold to the public through normal banking channels.” Fidelity Gold Refineries (Private) Limited is the sole gold buying entity and refining entity in the country and is owned by the central bank. The central bank’s monetary policy committee expressed “great concern on the recent rise in inflation”, which increased by 30.7% on a month-on-month basis for June 2022. Authorities are struggling to pull Zimbabwe from the grips of an economic crisis characterised by high inflation, a rapidly devaluing local currency, 90 percent unemployment and declining manufacturing output. The country’s inflation has been on an upward trend in the past three months as inflation pressures rise, driven by the continued weakening of the Zimbabwean dollar which is trading at $1:650 on the black market. The printing of new money by the central bank has also worsened the situation, reversing gains made in the past two years that saw inflation decrease from a peak of 800 percent in 2020 to 60 percent in January this year. As part of measures to stabilise the economy, the central bank will more than triple the lending rate from 80 percent to 200 percent per annum and raise the interest rate from 50 percent to 100 percent per annum. Harare-based independent economist Victor Bhoroma commended the apex bank’s interventions, saying positive interest rates would reduce both “speculative borrowing in the economy and money supply growth”. “Gold coins are a good idea in terms of storing value. It can be a way to reduce pressure on the US dollar if sold in Zim dollar thus stabilising inflation,” Bhoroma told Al Jazeera. “But they will likely be indexed in US dollar which means it’s a fundraising scheme to get USD from the market by the central bank. The success will thus depend on confidence in the central bank as the seller of the coins and guarantees that back them.” If confidence continues to dip, the market will maintain a preference for hard currency, he said. A welcome development Investment analysts seem to be cosying up to the idea of gold coins. Batanai Matsika, the head of research for stockbroking firm, Morgan & Co, said the gold coin was a welcome development in a market starved of investment options and will help investors hedge against inflation. “For a long time, the market did not have many investment options and this is a new asset class,” Matsika told Al Jazeera via telephone. “The thinking was inspired by the need to come up with an instrument that addresses the inflation problems in the economy where purchasing power has been eroded. From what we are gathering, this is going to be a store value.” Gold has certain fundamentals that help it hedge against inflation and geopolitical risk, he said, adding that the concept was not entirely new. “The idea is being emulated from the Kruger rands,” Matsika said. “It’s also a way of opening the gold market to ordinary investors. From an investment advisory point of view, it’s an area that is potentially exciting. It could prove to be worthwhile.” Harare-based Akribos Capital economist Tatenda Mabhande expressed optimism about the gold coin’s ability to act as a store of value. “Regarding the coin acting as a store value, it’s a good step given that the Zimbabwean dollar’s value was being eroded. People were going after US dollar as a store of value,” Mabhande told Al Jazeera. “It is going to ease pressures on the US dollar but demand for the USD will still be there. We don’t see the gold coin addressing exchange rate volatility though.” He said the gold coin was an attempt by government to reduce demand for the US dollar. “For as long as Zimbabwe remains a net importer, there will still be demand for dollars,” he said. “Along the way, bad money will drive good money out of the market. We are likely to see the coins disappearing as well.” In order for the gold coins to be effective, Mabhande said those seeking to acquire them should be able to pay with Zimbabwe dollars and not US dollars, to mop up excess local currency in circulation. Mabhande added that the central bank needs to ensure that the face value of the gold coin “is always greater than its intrinsic value” for them to be treated as money and for investors to use it as an alternative to the US unit. Central bank spokesperson Isaac Muzambi did not respond to queries from Al Jazeera on the expected timeline of introduction of the gold coins. New measures The new measures by the central bank come as President Emmerson Mnangagwa, who has been in charge since November 2017, is reportedly desperate to shed some of the legacy economic problems his administration inherited. On Saturday, Mnangagwa had promised to announce additional economic measures to stabilise the economy. On Monday, finance minister Mthuli Ncube announced a number of measures that will, among other things, see civil servants’ salaries being increased, and health sector and teachers’ allowances being reviewed upwards. Ncube also blamed businesses and Zimbabweans for spurring inflation and causing the collapse of the Zimbabwe dollar. Speaking to journalists in the capital, he said his claims were evidenced by recent “econometric studies done by the University of Zimbabwe” and that inflation “is not being caused by the normal real economic variables but by behavioural variables such as confidence, adverse inflation expectations”. Ncube also banned discounting of prices for payments made in US dollars, warning culprits would be prosecuted and operating licences revoked for offenders. Bhoroma said the minister’s measures were nothing to write home about. “There was nothing big from the Treasury statement considering the fact that the USD is already legal tender based on the Finance Act of 2009 & 2012,” he said. “The law to ensure US Dollar credit is protected is a welcome move to bring stability and certainty to banks that get lines of credit for onward lending to the business sector.” He said the removal of levy on diesel and cuts on fuel levy would have a minimal effect on the fuel price in the country because prices in Zimbabwe remained the “highest in the SADC region, thus making local products uncompetitive”. Sent from my iPad