More Denials on the IMF Gold Purchase by China

No official denial, but lots of doubts.

The whole thing seems odd, from the story to the doubts to the blatant bear raids and price manipulation being conducted almost every day with the New York open around these option expirations on the futures contracts.

Just yesterday we saw rumours floated in the SP futures pits that triggered a striking turnaround in the US stock indices, shortly after Goldman bought a large number of SP futures contracts. When the rumours were proved false, the forced buying continued.

Gold and financial assets in general are becoming even more political than usual. Expect this to intensify as the recomposition of the SDR and the international reserve currency are negotiated this year. The Anglo-Americans are the status quo on this one, and the integrity of their motivations and reports and transactions are definitely on the table.

We may be seeing the next stage of the currency wars that are so many things to different people. But in the end, it involves the artificial control of wealth and transactional flows, as they conflict with public policy and national and private interests.

Reuters
"China buying IMF gold" story unfounded: author
By Tom Miles and Zhou Xin
Thu Feb 25, 2010 11:24pm

BEIJING (Reuters) - The author of an article that said China had confirmed it would buy 191.3 tons of gold from the International Monetary Fund said on Friday she didn't have official sources for her story.

Nobody was available to comment on Friday at China's State Administration of Foreign Exchange, the arm of the central bank overseeing gold reserves.

The unverified report helped push up gold prices by 1 percent on Thursday, though other commodities fell, under pressure from a stronger dollar. Traders cited the talk about China as a significant factor why gold prices clawed higher.

China has not said anything officially about plans to buy the IMF gold, but there has been strong speculation because of China's $2 trillion reserves and its announcement last year that it had increased its gold holdings by 454 tons since 2003

Rough & Polished, a Moscow-based industry website, reported China had "confirmed its decision to acquire 191.3 tons of gold auctioned by the International Monetary Fund," which helped push prices up on Friday.

Contacted by Reuters, the author of the Rough and Polished story, Nadezhda Shagrova, who works as a tour guide and journalist in Shanghai, said she did not have any official information to back up her story.

"The source for the story? Well, that's been written about in lots of places. I mean, Xinhua news agency wrote about that and other official Chinese sources, lots of them. Why are you asking?"

Told that gold prices were moving on her story, she said: "No, no, there's just no way that could be because of my article."

Wednesday's China Daily newspaper cited an unnamed official from the China Gold Association as saying China was unlikely to buy the gold being offered for sale by the IMF.

(Editing by Clarence Fernandez)

Goldman To Advise Greece On the Sale of Strategic Assets to Avert Debt Crisis

And then come the jackals...



Note: obviously this is a cartoon, and Greece is not selling the Parthenon, yet.

But it does carry a more serious sentiment that was known in English literature as 'tragic transcience,' at least when I studied it in university. It may best be embodied in the renaissance poem "A Litany in Time of Plague" by Thomas Nashe which goes "Beauty is but a flower, Which wrinkles will devour; Brightness falls from the air; Queens have died young and fair; Dust hath closed Helen's eye, I am sick, I must die, Lord have mercy on us.”

Here is a later expression of this same thought that I most recently came across again in a short poem by Rudyard Kipling titled "Recessional."

"Lo, all our pomp of yesterday
Is one with Nineveh and Tyre!
Judge of the Nations, spare us yet,
Lest we forget, lest we forget!"

Rudyard Kipling

How are the mighty fallen...

And then of course there is Shelley's classic--

"I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mock'd them and the heart that fed.
And on the pedestal these words appear:

"My name is Ozymandias, king of kings:
Look on my works, ye mighty, and despair!"

Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away."

Ozymandias, Percy Bysshe Shelley

China Said to Purchase Remainder of IMF Gold Sale

This is being reported by Finmarket, a Russian news agency.

I would like this to be confirmed by an official Chinese news agency.

There are recent stories to the contrary from the region: IMF Purchases Not Feasible for China Says China Gold Association The CGA thinks it is more appropriate for China to buy actual foreign mining properties rather than refined bullion, except of course from local sources I'm sure.

I think it is highly unlikely that China would pre-announce any deal or their intentions until the price was firmly set. They are not like the Bank of England which announces its intentions first, and then works against itself in the market.

Having said that, this is credible story, because the Chinese Central Bank is a known buyer of gold, from a variety of sources both foreign and domestic. Further, they were said to very disappointed that India was able to purchase the entire 200 tons initially offered by the IMF at a private pricing of $1050 per ounce.

China would like to increase gold as a percentage of their official reserves closer to the international average which is about 10 percent. Right now their holdings are only 1.2% as I recall.

The bullion banks can use paper gold to manipulate pricing around key events like this week's options expiration in the short term. They are powerful, and have many friends, their demimonde, who will help them to spin the facts, place opinion pieces, and resurrect old studies, to convince a gullible public once again that their promises are good, that their paper riches are wealth. This is the essence of the shaping of public opinion, the hidden persuaders, the not always subtle propaganda campaigns that so often pass for news these days.

But the international currency regime is changing, and the developing countries are choosing to protect their reserves in traditional ways. For the first time in over twenty years the central banks have become net buyers of gold.

The wealthy are buying physical silver and gold in anticipation of a dislocation in the structure of the existing international currency regime, no matter what they might say publicly to reassure the markets. This we know. Whether this is the most prudent thing to have done only time will tell, since there are a range of possible outcomes, and probabilities. But change is in the wind; the time of reckoning approaches and the accounts will be tallied and settled.

Eventually the price manipulators may not be able deliver what they have already sold, and will face a default. As they have done so many times in the past, they will obtain some relief from the exchanges, which they virtually control, in the form of a paper settlement. If necessary, they will ask for a bailout from their friends in the government, at your expense if you are holding their paper.

Then we will see who believes in freedom and fair markets, and who stands for tyranny, for whatever reasons, whenever it suits their needs.

Pravda
China To Purchase Half of IMF's Gold
25.02.2010

China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.

World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.

The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.

China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.

“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports...