Posted by Francis Koh on 27 Oct 2014

CHINA 10,000 TONS OF GOLD RESERVE? Could Have Been Done With Ease

This means China will have (by year-end 2014) taken in $951 Billion in shiny, new, digital dollars and simultaneously sold or rolled off $9 Billion in US Treasury holdings…so China will have had to find a home for $960 Billion new dollars.

China Gold #1B  China Gold #3  China Gold MoneyMap Press

From ’00 to ’11, China had (on average) recycled 50% of its trade surplus dollar reserves into Treasury’s. However, as noted above, China has been a net seller since August ’11…why is this date important? It was the month after the debt ceiling fiasco…and the date when China’s purported gold purchase binge began. I don’t think these happenings are a coincidence.

Since we know China didn’t buy Treasury’s over this period, perhaps we should speculate what those new dollars would do if focused on gold purchases?!? If China rotated the 50% of surplus dollars it had been utilizing to buy Treasury’s and instead bought Gold…at an average of say $1500 an ounce since Aug ’11…that would buy China exactly 10,000*** tons of gold by year-end 2014. Hmmm…Implications abound.

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