GATA: Koos Jansen: China will have imported 2,000 tonnes of gold this year

I know that most people think gold is archaic and irrelevant these days.  After all, we have dollars and bitcoins, right?  But gold has always been relevant and it didn’t suddenly become irrelevant in the past 100 years simply because a few con men slunk off to Jeckyl Island back in 1910 to plan the federal reserve (or in the last 4 years that others conjured bitcoins out of thin air).  

Please re-read the title of this post.  It comes from a recent GATA email which is worth your time to go read online. In short, China will add 2000 metric tonnes to their holdings this year.   Per the Wiki chart above, the US has taken 200 years to put 8100 metric tonnes in our reserves and that is best case.  More likely, we have the physical gold on hand but have leased it out or lent it out in order to fractionally reserve the gold out there in order to keep prices down.  If we really had all of the gold, why would Germany have to wait 7 years just to get the 300 tonnes of gold that everyone agrees we have been holding for them?  The answer is simple: WE DON’T HAVE IT.

But forget that for now.   Even if we own every Troy ounce (ozt) in the vault at Ft Knox and in the vault of the federal reserve, in the time frame of just one (1) year China bought an amount of gold equal to 25% of our total holdings.   So while most foolish Americans don’t understand the value of gold (because our own sheeple wool has been pulled over our eyes by the con men), the Chinese certainly do see the value of it.  No sane person today easily writes a manufacturing powerhouse like China off as a “gold bug” or “conspiracy theorist” (these terms seem to be related in the minds of most liberals and sleeping conservatives).  More importantly, look at gold’s share of their national reserves.  When it was 1054 metric tonnes, it was only 1% of their foreign reserves (i.e. wealth held by a nation in someone else’s money – gold is treated as universal money so it is put on the books as a forex asset).

OK, so now that they bought 2000 more tonnes, maybe that number has changed to 3%.  Three piddling percent.  In other words, they have plenty of room to buy more without being over weighted in gold.  Where do you think the bulk of China’s forex is stored?  Yes, that’s right, Euros and Dollars.   By quietly making these gold purchases (see any headlines about it from China?  NO.  They are quietly accumulating as the price goes down), China is taking advantage of current deflationary conditions to become a world money power.  I’m telling you, he who has the gold makes the rules.  That is a real deal, not something from a mother goose story.  Since when did China think they can start suddenly creating air defense zones that threaten US allies S. Korea and Japan??  When did they start demanding terms and conditions for accessing these spaces?  When did they grow the cohones to block a US naval vessel (a missile destroyer no less) at sea with their own military vessel?  Why, as soon as they got some gold in their pockets of course.  

People don’t get it: to a scam artist running a fake money con, gold is like a nuclear weapon.  Gold has the power to call fiat currency a fraud.  Gold is unique in this power.  There are rumors right now that Obama is letting China buy our gold from us at these cheap prices if she only promises not to dump our debt too quickly.  Such a move would throw the entire global economy into a tailspin.   

This reminds me of the chess end game where it’s a rook and a king against a lonely king.   The king-rook just keeps backing the single king into a corner and the single king just keeps on giving up ground to avoid being checkmated.  But the checkmate comes anyway.  It can only be delayed, not avoided.  The more gold China has in its vaults, the stiffer its demands will become and the less likely it will be to blink.  The famed Chinese humility will simply evaporate when she attains the upper hand and the Chinese will become the bully that the USA has been for decades (despite the fact that many Americans like me despise the US government for this).  We did not do whatever it would have taken to make the con men stop being a$$holes so we are guilty by association.

The rapid accumulation of gold by China is effectively a massive and growing threat to our economic security.  Loss of economic security always translates into a loss of physical security.  As China begins to demand more and more, we will see the current administration talk tough but do nothing.  Red lines will be crossed left and right.  It will not be for lack of desire to go to war by our warmongering military.  It will be due to fear of the economic carnage that Chinese gold has the power to do to our corrupt global monetary system.  Nobody can win a nuclear conflict and now we cannot have an non-nuclear conflict without China crashing our economy.