Zero Hedge: “As is well known, the last time China did provide an update of its official gold inventory was in early 2009 when it disclosed to the IMF some 1,054.1 tons of gold held at the PBOC headquarters (or elsewhere). The problem is that this number is now very outdated, and substantially undercuts China’s true gold holdings.
To be sure, there has been extensive speculation on the topic, suggesting China’s current gold may be anywhere between 3,000 and 8,000 tons (or more) but the reality is that until Beijing itself decides to officially reveal the number, speculation will remain just that.
And, as we and many others, Bloomberg included, have noted such a revelation will not come in a vacuum, but will be largely a political statement about the preparedness of the Renminbi to replace the US Dollar as the world’s reserve currency.”
Opinion: In our book Antichrist: The Search For Amalek we advanced the theory that China has been taking advantage of the drop in the price of gold.
Excerpt: “Brennan told the cabinet that China had been buying large amounts of gold for the past five years in an effort to build global confidence in the Chinese currency. Their aim was to make the renminbi the de facto reserve currency and to increase global influence.”
I was not alone when I wrote that in 2012-13. Wikileaks, a year earlier, said this: “China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB (renminbi).”
But something else grabbed my attention. The Wall Street Journal has reported for years that China’s holdings of US Treasury Bonds has not increased since 2010. In fact, the reported 1.2 trillion in treasury bond holdings is down from 1.5 trillion five years ago.
China has warned the US more than once that they were losing faith in the dollar, so when the price of gold dropped in 2013-14 it made sense for China’s central bank to load up in order to strengthening the renminbi.
Despite China’s moves, this past year has seen a rise in the US dollar due to a reported up-turn in the US economy. What is disturbing is that despite this supposed recovery, there has been stagnant wage growth and the Federal Reserve has been unable to raise interest rates even 1/4 point.
China is not buying the hype.