Shanghai Gold Exchange Has 46.2 Tonnes of Gold Withdrawn - What Will China Do

There were 46.2 tonnes of gold withdrawn from the Shanghai gold exchange in the week ending June 26th.

Since 2009 there have been a total of 9,076 tonnes of gold withdrawn from Shanghai.

I have also included two slides from a recent presentation by Zhang Bingnan, the Chairman of the China Gold Association.

In them he talks about China gold reserves reaching 9816.3 tonnes at the end of 2014, the second largest in the world.  That is interesting because it sounds as though he is talking about China's official reserves, which are not transparent yet, although there are some expectations of an official update later this year.   He *might* be misusing the term reserves here to mean all the gold in the nation, but that does not seem quite right. 

And if these are in fact the official reserves, to whom would the Chinese be second?  The US would have less than this number, and the only entity I can think of that would have more would be to lump the European community together.    If anyone knows if he clarified that point in his discussion at the LBMA I would like to know.

Below that are two charts from a talk titled The World Needs New Reserve Currency from the perspective of global liquidity by Yao Yudong of the People’s Bank of China.

In them he discusses the potential role of gold and the renminbi in international liquidity and as a new form of world reserve currency.

Playing this kind of sea change is not the usual Wall Street task of getting tips from privileged cronies, and asymmetrical information in the equity markets, and playing against the rubes with the artificially manufactured market inefficiencies in which insiders excel.

What will China do?  And what will others do in response?

From a practical standpoint it is not possible to forecast how and when any changes may come, and exactly what form they may take.   This is a generational change in the character of international relationships and values. 

What is happening now has been happening since at least 1999.   If by this time a pundit or an analyst do not understand this, then they understand nothing.  And this is how it is with some.

In this sort of change, almost everyone will be taken by surprise when the time comes.  It is just that some will be in a better position for it than others.

But it is in human nature perhaps, that most will cling to what is transitory and base, while trampling what is of lasting value in the dust.  There are few things that we can surely know:  change will come, and in the end, neither money nor gold nor any vestige of earthly power and position will remain.    Only faith, hope, and love will endure, and the greatest of these is love.

Related:  COMEX:  Trading From Physical to Paper

Freedom of the Press Under Government Pressure In Japan

History continues to rhyme.

"The Foreign Correspondents' Club of Japan views with deep concern the recent statements at a meeting of ruling Liberal Democratic Party lawmakers concerning freedom of the press. In particular, we are alarmed by comments that call for putting pressure on corporations to pull advertising from media and to 'crush' newspapers in Okinawa that don't hew to party and government policy views.

At the very heart of democracy is an open and fully functioning free press to serve as a check and balance on the government and to help inform debate about the issues of day. That is why freedom of the press is protected in Japan's Constitution. While the ruling party has taken action against those lawmakers involved and noted its commitment to freedom of the press, these types of comments and actions have become an extremely disturbing pattern.

Most notable recently are the calling in of broadcasters to a ruling party meeting to question their commentary and reporting and the letter to Tokyo-based networks calling for neutral coverage and reporting guidelines for the Lower House election campaign last December. In last week's instance, it is all the more alarming, considering that the lawmakers in question grew up under Japan's post-war democratic system, which includes a free press.

The Foreign Correspondents' Club of Japan, established in 1945 with a membership both from Japan and overseas, views freedom of the press and the free exchange of information as central to protecting the public from state overreach, maintaining the wheels of commerce and enhancing understanding between different cultures.

In that context, we urge the ruling party and the government to refrain from actions that can – or could appear to - affect the freedom of the press and to better educate its lawmakers and officials over the vital and Constitutionally guaranteed role that a free press provides in Japan."

James Simms
President
The Foreign Correspondents' Club of Japan
July 2, 2015

Greece and Goldman: Can the World Afford the American Elite's Addiction To Abusive Banking Practices

 

Und das große Feuer in Soho
sieben Kinder und ein Greis -
in der Menge Mackie Messer, den
man nicht fragt und der nichts weiss.

Und die minderjährige Witwe
deren Namen jeder weiss
wachte auf und war geschändet -
Mackie, welches war dein Preis?


Kurt Weill, Bertholdt Brecht, Die Moritat von Mackier Messer, 1928

Here is an example of the consequences of the failure to reform the outsized and kleptocratic financial system after bailing it out, even years after the latest financial crises.

The former Greek government was certainly more compliant to Western banks and political suggestions.  It was the introduction of a 'reform government' in Syriza that rustled the feathers of the international kleptocrats and their organizations.  

But we have heard all this before, many times, from investigative reporters and whistle-blowers such as John Perkins, on the 'economic hitmen.'

I would like to see Europe and Asia begin to take stronger measures to prohibit these banking cartels with long records of banking violations and market rigging from doing business in their regions and with any of their official financial instruments.

The US apparently does not have the political will to reform its banking system.

How much damage will they stand by and permit these sorts to visit on their people, who always seem to be picking up the pieces, through austerity and privatizations of their national assets.   Will these new trade agreements even allow them to exercise their national sovereignty to protect their people from fraudulent financial practices and price gouging in the future? 

The apologists for white collar criminality like to say, 'don't hate the player hate the game.'  But the only way to make the game honest again is to have these bent players take responsibility for their actions, and for the judges to start handing out red cards to any repeat offenders.

That would be more statesmanlike than visiting harsh punishments, and austerity, and slanders on their victims.  

Wall Street On Parade
Goldman Sachs Doesn’t Have Clean Hands in Greece Crisis
By Pam Martens and Russ Martens
June 30, 2015

Are Goldman Sachs executives Lloyd Blankfein, Gary Cohn and Addy Loudiadis losing any sleep over elderly pensioners waiting outside shuttered banks in Greece, desperately trying to obtain their pension checks to pay their rent and buy food? Are these Goldman honchos feeling a small pang of conscience over the humiliation by creditors of this once proud country?

Perhaps Blankfein, who famously espoused that he’s “doing God’s work” might shed a tear or two for the small child clinging to her elderly Grandmother’s hand as she searches in Athens for an ATM that will give her $66 from her bank account – the maximum allowed per day under the newly imposed capital controls.

According to investigative reports that appeared in Der Spiegel, the New York Times, BBC, and Bloomberg News from 2010 through 2012, Blankfein, now Goldman Sachs CEO, Cohn, now President and COO, and Loudiadis, a Managing Director, all played a role in structuring complex derivative deals with Greece which accomplished two things: they allowed Greece to hide the true extent of its debt and they ended up almost doubling the amount of debt Greece owed under the dubious derivative deals.

A February 2012 BBC documentary on the Goldman Sachs deal provides a layman’s view of the dirty underbelly of the deal, calling it “a toxic import” from America that is “hastening” the downfall of Greece...

For the unschooled to the ways of Wall Street, one might jump to the conclusion that Greece and its finance officials were knowing participants in the deal. That would be a reasonable assumption were it not for counties and cities and school districts across America that were similarly fleeced and hoodwinked by investment banks on Wall Street.

In March 2010, the Service Employees International Union (SEIU) released a study showing that from 2006 through early 2008, Wall Street banks are estimated to have collected as much as $28 billion in termination fees from state and local governments who were desperate to exit abusive derivative deals. That amount does not include the ongoing outsized interest payments that were, and still are being paid in some cases. Experts believe that billions of these abusive derivative deals may still remain unacknowledged by embarrassed municipalities.

Back in 2010 when German Chancellor Angela Merkel first heard of these derivative deals to hide sovereign debt among European Union partners, she had this to say: “It’s a scandal if it turned out that the same banks that brought us to the brink of the abyss helped to fake the statistics.”

Well, that’s exactly what happened...

Read the entire article here.