China is angry (at the West) that much is clear. China has now made a series of “shocking” announcements, and made dramatic moves with its economy, two acts which are totally atypical of the general approach from Beijing. China generally acts in a very discrete, understated manner, which does notattract attention to its policies, both political and economic.
The source of its anger is easy enough to identify, the economic terrorism perpetrated against its economy by Western bankers, and discussed previously. What is far less easy to discern is its precise intent in making these overt and (for China) bold moves. In other words; China is “sending a message”.
The task for the Alternative media is to decipher that message.
A review of recent events is necessary, as this chain grows longer and longer:
1) China makes a voluntary disclosure of an additional 600 tonnes of gold as part of its official reserves. The announcement was generally considered “surprising”, and some commentators have suggested this was a provocative gesture directed at the West (or more properly, retaliation for the terrorism referred to above).
2) China “suspends” the trading accounts of dozens of U.S. traders, in relation to the (extremely suspicious) bubble-and-crash in China’s stock market. It publicly announces it is investigating these traders for “manipulating” China’s stock market (illegally) using the banksters’ infamous computerized trading algorithms – the same abomination/crime which has been regularly discussed in previous commentaries.
3) China makes a “shocking” announcement of an official devaluation of the renminbi of nearly 2%.
4) China announces an even more-shocking, second devaluation of the renminbi – a day later.
5) China makes a second announcement of a (much smaller) increase in its official gold reserves.
Unprecedented, for China. While the West’s puppet governments engage in extreme and reckless acts on a regular basis (reflecting the psychopathic nature of their Master); China acts in a measured, sober, and non-confrontational manner. Not any more.
Again, this begs the question: what is China’s “message” here? The first topic/event has already been thoroughly discussed (and analyzed). The second event was the specific topic of a recent commentary, so nothing further will be said here on that subject. It is when we get to events (3) and (4), the back-to-back devaluations of the renminbi where divergence of opinion on China’s intent begins to widen.
The mainstream media calls this a “currency war”, so we can reject that explanation, as the Corporate media oligopoly rarely provides us with honest/legitimate analysis of events. The same commentary (above) has also explained how currency devaluation is highly self-destructive, and nothing more than a short-term bandaid. It is inconceivable that China would consider such a “war”.
This leaves two possibilities. Either this was a short-term bandaid intended as a response to the bubble-and-crash of its stock market perpetrated by the One Bank, or it was a preemptive move, in anticipation of even greater (global?) economic havoc, in the near future. These are possibilities which, unfortunately, can only be answered and separated in hindsight.
This brings us to the final event in the chain: China’s second announcement of an official increase in gold reserves. Here it is first necessary to provide readers with the “rules” regarding the disclosure of a nation’s gold reserves, as was done in a recent interview.
To be brief; gold purchased internationally (i.e. on the open market) must be disclosed in a timely “manner”, meaning within the monthly reporting period for international financial transactions. This is why we regularly see Russia making disclosures of increases in its own reserves. These are Russia’s monthly purchases of gold on the open market, as are most of the (mandatory) disclosures from other central banks regarding increases in those nations’ gold reserves.
Gold which governments acquire domestically/internally (generally via their own gold-mining sector) does not have to be disclosed – ever – as per the rules on financial transactions (since gold is always considered to be “money”). It is with these rules properly explained that we can now address China’s two, totally separate announcements of increases to its gold reserves.
Its first announcement was a voluntary disclosure, meaning it was merely disclosing some of the gold it had already added over the past decade (or longer) from its own domestic gold mining. We know this because of the size of the increase: 600 tonnes. It is impossible for that much gold to have been bought, internationally, within the one-month reporting period for such disclosures. Such gold-buying would have had disastrous (fatal?) consequences for the West’s fraudulent (paper) “gold” market.
Conversely, this second, much smaller announcement of an increase of less than 19 tonnes was amandatory disclosure of gold-buying by China on the open market. This is new gold. This is the first such announcement by China in (at least) six years, leaving two possibilities. Either this is the first time that China has bought gold in the open market in many years, or any/all previous purchases of that nature were done illegitimately, through third party proxy-buyers.
Either way; this is an extremely dramatic move by China. Now look at China’s two gold announcements, together. At the same time that China made its voluntary disclosure of additional gold reserves (600 tonnes) it began aggressively buying gold on the international market (openly) – at the rate of more than ½ tonne per day. Those are the purchases which China is now reporting today.
At the same time; Russia has also been buying gold “aggressively”, on the open market, over recent months, in additional to all the 1,000’s of tonnes of gold which it has been secretly adding to its own reserves, via its own extremely large, domestic gold-mining industry. Combining official gold purchases with the (unofficial) tonnes added via domestic mining; China and Russia could easily have total gold reserves of 4,000+ tonnes and 3,000+ tonnes (respectively), without any illegitimate “hidden” buying.
With the claims of “official gold reserves” of Western governments nothing but the most-laughable fiction; almost certainly China and Russia are #1 and #2 globally in national gold reserves, solidifying their status as the heirs-apparent for the future center of global economic power. Let us never forget the Golden Rule: he who has the gold makes the rules.
Clearly the psychopathic bankers of the West are now endeavouring to put that Golden Rule to the test, and attempt to cling to financial supremacy through their paper empire of fraud-and-corruption. Clearly, Russia and China now have “different ideas”. But this still does not provide any precise answer to China’s pair of “shocking” announcements of additional gold reserves.
One theory advanced by the respectable voices of Alasdair MacLeod and Hugo Salinas Price is that this (now) dual announcement by China regarding its gold reserves is motivated primarily by an intent by China to “revalue” gold (higher) – in the immediate future. This is certainly a plausible hypothesis.
The advantage of this theory is that it also “explains” China’s twin-devaluations of the renminbi: first it revalues its own currency lower, then (so the theory goes) it acts to revalue gold higher. But that is not the theory of this writer.
The hypothesis to be advanced here is that China’s pair of recent announcements are a response to something much bigger, a full-fledged gold war between East and West (naturally started by the West). To explain this theory requires that we now move to India, and look at what is purported to be the world’s largest, national (private) stockpile of gold: the more than 18,000 tonnes held by the 1.2 billion people of India.
This is a subject which has already been recently examined in several commentaries. Further elaboration here will require that readers turn to the sequel to this piece – Gold War: The One Bank’s Indian Gold-Grab.
**The opinions expressed in this article are not necessarily the opinions expressed by Sprott Money Limited, but entirely that of Bullion Bulls Canada. Any concerns with this article can be addressed directly with Bullion Bulls Canada.