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Thast just what we know ...
Remember there are numerous other state bodies besides the central bank that own gold: the army, the State Administration of Foreign Exchange and China Investment Corporation, the sovereign wealth fund. Precious metals analyst Bron Suchecki, formerly of the Perth Mint, says 55%.
Even at 50%, the implication is that China owns more than 16,350 tonnes – double the US figure. I can’t see how its national holdings are anything like the 1,948 tonnes they say they are. To declare markedly larger holdings would cause an unwanted surge in both the yuan and the gold price.
The state’s US dollar reserves would be devalued. It would be a direct challenge to US supremacy. China is probably not yet ready for that. For now it follows Deng Xiaoping’s doctrine: “We must not shine too brightly.”
But if that Russia-China axis wants to weaponise money, as the US has done, all China has to do is declare its gold holdings, and perhaps even partially back the new currency it plans to launch, a central bank-backed digital yuan, with them.
Unbacked Western fiat money risks losing a great deal of its purchasing power in such an event. It could create chaos in the West. But that is the card China now has with its 20 years of relentless accumulation.
In short, any new money whose aim is to get SCO trading with each other outside of a US-controlled banking system is going to need to involve gold for it to work. It wouldn’t surprise me to see them attempt the Glazyev system described above and for it not to work because of the trust problem, and because most of those nations are going to want to retain the right to print.
They could then try a second time, giving gold a more prominent role, and this time it might work better.
It seems obvious to me, that China has the capacity, and the influence to force a better global currency, one that is more inclusive and less exclusive to the domain of one country. If they include Russia and Inida, and Asia, then the custmer bases starts to look very solid. If they start to wiedl positive influence in countries, like they are by buidling infrastructure, and meddling endlessly with governments, endless debt issuance (the worst being where debt is issued to a government, whose poilitical elite syphon off inot bank accounts in the Treasure Islands, leaving the liability to the people)
China may still not be shining too brightly yet, but its time cometh, ... and ... “Let China Sleep, for when she wakes, she will shake the world,” (Napoleon Bonaparte). ONE EYE IS OPEN NOW ...
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the gnome
We know that many countries in the SCO have plenty of gold and have been increasing their holdings. In the 14 years between 2006 and 2020, Russia’s central bank more than quintupled the country’s gold holdings, from around 400 tonnes to today’s 2,300 tonnes or so. It’s now world’s fifth-largest gold owner.
Then there is China. It has been quietly de-dollarising. Since 2021 China has lowered its holdings of both dollars and US Treasuries by 10%. Its holdings in US Treasuries have dropped by over $100bn since 2021, and it now has less than $1trn in US debt for the first time since 2010.
Its US dollar foreign-exchange reserves have come down from $3.25trn to $3trn over the same period. Having seen what happened to Russia, China will not want to be too vulnerable to a banking system that is run by the West.
Then there are China’s gold holdings. I consider this the most important story in world finance, yet it is largely ignored. China has far more gold than it says. China’s stated reserves are 1,948 tonnes of gold (barely 3% of its foreign exchange reserves). America’s are 8,100 tonnes (over 65% of national reserves).
Now we consider Chinese mining and its imports. China is the world’s largest producer of gold. This past decade it has produced about 15% of all the gold mined in the world. Since 2000, China has mined roughly 6,830 tonnes. China keeps the gold it mines. Over half of Chinese gold production is state-owned, and the export of domestic mine production is not allowed.
Given 6,830 tonnes of production, its official 1,948 figure already looks dubious. Chinese mining companies have also been buying assets across Africa, South America and Asia, and international production now exceeds domestic production (by approximately 15 tonnes in 2020).
China is also the world’s top importer of gold. Imports via Hong Kong alone, never mind Switzerland or Dubai (for which we don’t have numbers), have amounted to more than 6,700 tonnes since 2000.
Most of the gold that enters China goes through the Shanghai Gold Exchange (SGE), so the SGE is a proxy for demand. We know that since 2008, 22,000 tonnes of gold has been purchased by and delivered to physical gold buyers in China.
There is also gold that enters China that isn’t accounted for by SGE withdrawals. The central bank oversees the SGE, but its purchases do not go through it. It likes to buy 12.5 kilogram (kg) bars, which do not trade on the SGE, and it often uses dollars on exchanges in London, Dubai and Switzerland, while the SGE sells its gold in yuan. So there is plenty of tonnage we cannot account for.
Add to this gold held in China, whether as bullion or jewellery, prior to 2000 – the World Gold Council estimates 2,500 tonnes in privately-held jewellery – plus domestic mining and official reserves, you get a figure of around 4,000 tonnes. Cobble it all together – cumulative production, imports and existing stock – and you arrive at a figure around 32,700 tonnes. That’s ju
Times are looking predictably grim, not much end in sight, and especially in the UK it seems!
Former Treasury Secretary Lawrence Summers blasted the economic policies being adopted by newly installed UK Prime Minister Liz Truss, saying they’re creating the circumstances for the pound to sink past parity with the US dollar.
“It makes me very sorry to say, but I think the UK is behaving a bit like an emerging market turning itself into a submerging market,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin.
Summers: “”It would not surprise me if the pound eventually gets below a US dollar.” Bloomberg
“Between Brexit, how far the Bank of England got behind the curve and now these fiscal policies, I think Britain will be remembered for having pursuing the WORST macroeconomic policies of any major country in a long time.”
Truss’s government has set out the most radical package of tax cuts for the UK since 1972, reducing levies both on worker pay and companies in an effort to boost the long-term potential of the economy. Economists are concerned the package is unaffordable and will trigger a currency crisis over concerns about rising debt.
I would hang onto my CEY shares, even top up!
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the gnome
There are quite a few "traps" and "taps" around. Another below
"Researcher and writer Dr. Ben Abelow, a scholar who lobbied Congress on nuclear arms policy, joins Useful Idiots to explain, as his new book argues, how the west brought war to Ukraine. “The goal of the US,” Abelow says, “is not to save Ukrainians but to degrade Russia’s military until they won’t be able to fight in the future. And while some say stopping Russia is a humanitarian goal, the way one would degrade Russia’s military is to keep an extended war going and fight to the last Ukrainian.”
Abelow analyzes the history of this cold war, the aggression by each side, and the hypocrisy of the argument that Ukraine has a sacrosanct right to join NATO.
“The right to join NATO is the right to place a western military arsenal on Russia’s border. If Russia made a military alliance with Canada or Mexico, US leaders would not be talking about their right to do so.”
And on this week’s news of Putin announcing military escalation and giving a thinly-veiled threat of nuclear war, Dr. Abelow warns:
“I hope it’s taken seriously.”
https://medium.com/@benjamin.abelow/western-policies-caused-the-ukraine-crisis-and-now-risk-nuclear-war-1e402a67f44e
Do your own research and draw your own conclusions. I guess only a few really knows, but propaganda and BS rules the waves these days, and shapes and distrots the markets.
The ODD thing is the momentary defleciton down in gold does not imply that CEY is in fact worth a lot less, unless the sale is made on the day.
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the gnome
In a flurry of central-bank meetings from Norway to South Africa, many raised rates by larger-than-expected margins in a day that analysts at ING billed as “Super Thursday.”
One of many to come, and where this ends no one knows
Many central-bank officials struggling with a crisis of public confidence (never had much in the first place?) after initially arguing that inflationary rises would be temporary, are now racing to raise interest rates to catch up with soaring prices, but not so fast that they trigger unnecessary economic pain...Hmmm ...
Until this week, officials had projected what has been dubbed “immaculate disinflation”: Inflation, now running above 8%, would fall sharply to around 2%, with virtually no increase in unemployment. And on the 7th day the officials rested LOL
It is unprecedented for the Fed to predict so steep a rise in unemployment “before a recession has already begun,” Derek Tang of LH Meyer/Monetary Policy Analytics, a financial-research firm, wrote on Twitter. “They are trying to tell us there will be a hard landing; there is no other way.”
So how, then, does inflation fall to 3.1% (excluding food and energy) in a year, as Fed officials project? They implicitly assume much of it will happen painlessly as supply-chain disruptions ease and rising labor-force participation reduces wage demands.
Still waiting for the productivity word. Do they know what happens when wages go up, and productivity does not? Have they done a lot of international travel, like me. I am still trying to find out where my bags are, and I have been on the road for 10 days now. Getting a bit on the nose. Wonder how the poor people are going shipping around bucket loads of goods. Have any of the Fed and central banks ever run a business or worked in the real world. Think: margins go down, companies run kean, and run very exposed to uncertainties and shocks which we have in abundance!
The central bankers live in a rarefied world, quite divorced from the real world. a world of PhD economists with various theories and wonderfill financial models, that neglect human behaviour and other unpleasantries.
Going to be some tough times, and we do not have the leadership, nor the well engineered financial systems to cope is my cynical take.
good luck, and go gold ...
the gnome
World Bank Report: Alarming to say the least, and thats the positive side! If you have not read it, I suggest you do so. There are some unsual things happening in synch, and the Central Banks are reacting to advice from the World Bank, and that advice, tempered with positive language, is alarming.
"Central banks around the world have been raising interest rates this year with a degree of synchronicity not seen over the past five decades—a trend that is likely to continue well into next year, according to the report. Yet the currently expected trajectory of interest-rate increases and other policy actions may not be sufficient to bring global inflation back down to levels seen before the pandemic. Investors expect central banks to raise global monetary-policy rates to almost 4 percent through 2023—an increase of more than 2 percentage points over their 2021 average.
Unless supply disruptions and labor-market pressures subside, those interest-rate increases could leave the global core inflation rate (excluding energy) at about 5 percent in 2023—nearly double the five-year average before the pandemic, the study finds. "
It goes on to suggest developing countries are going to do it very tough, and so on....
https://www.worldbank.org/en/news/press-release/2022/09/15/risk-of-global-recession-in-2023-rises-amid-simultaneous-rate-hikes
https://openknowledge.worldbank.org/bitstream/handle/10986/38019/Global-Recession.pdf
June 07, 2022—Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, according to the World Bank’s latest Global Economic Prospects report. This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike.
https://www.worldbank.org/en/news/press-release/2022/06/07/stagflation-risk-rises-amid-sharp-slowdown-in-growth-energy-markets
Bunker down all....trouble is coming, ...fast
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the gnome
The Federal Reserve on Wednesday downgraded its economic outlook for the US and warned of consistently high inflation and a worsening job market as raised interest rates by 0.75 percentage point for a third straight time.Fed chairman Jerome Powell said policymakers were “strongly committed” to curbing inflation as they pushed the benchmark interest rate to a target range of 3 per cent to 3.25 per cent, their highest point since 2008 and up from near zero at the start of this year.FULL SPEED AHEAD, THEN SLAM THE BRAKES ON. IF YOU DROVE YOUR CAR LIKE THIS YOU WOULD BE ARRESTED?Despite all of the endless waffle about jobs, we now see worsening job markets. I cant pick up the discussion about productivity. Like wise, the discussion about the marveloous industries that lead no where and waste peoples times.The Fed slashed its growth forecast to 0.2 per cent this year from a June projection of 1.7 per cent. The central bank next year expects a weak rebound to 1.2 per cent, again lower than its June forecast of 1.7 per cent. For 2024, it forecasts growth of 1.7 per cent, down from an earlier estimate of 1.9 per cent.Inflation peaked at 9.1 per cent in June, as measured by the 12-month change in the US consumer price index. But it has failed to come down as quickly as Fed officials had hoped (dont like to use the word predicted, as this is something that has been abused before??) . In August, it was still 8.3 per cent.The Fed action is taking place against the backdrop of tightening by other central banks to confront price pressures which have spiked around the globe. Collectively, about 90 (surprised as they all follow the leader?!) have raised interest rates this year, and half of them have hiked by at least 75 basis points in one shot.We have Putin not threatening to employ nuclear, and mobilises 300k reservists, and a bleak winter in Europe with many businesses either shutting or running sub-optimally due to energy costs.Throw in "we will start a war if anything happens to Taiwan" and we have some of the most ridiculous positions being taken...Hard not to see some dire times ahead.Bunker down allbest the gnome
America has a national security problem, and ... a few others. Its health industry is a mess, 17% of GDP spent on health to deliver a health system that is ranked below Mexico and alike. Singapore spends 4% of GDP and delivers superior health outcmes that even attract such persons as Robert Magabe,,,and so on....LOL
The biggest threat to the USA is right at home: the Pentagon’s stranglehold on our national budget, (been going on for a few decades now!) alongside the woefully inadequate investments in addressing urgent, nonmilitary problems like climate change, pandemics, and racial and economic injustice...and we wont mention a health care system which does not work well....
Nowhere are these misplaced priorities more evident than in Congress, where the House and Senate routinely add tens of billions of dollars to the Pentagon budget beyond what the department even asks for (!!!???), in order to shovel funds to weapons contractors based in their states and districts. This year Congress is poised to push the budget to at least $850 billion. This is far higher than spending at the peak of the Korean or Vietnam Wars or the height of the Cold War, and there is no doubt more to come, as the Ukraine needs more weapons, more security systems, more training and so on and so forth. Gimme a break. Who starts what war and why and how benefits...and unfrotunately...who loses.
This all contributes to the strength of the US$...and who benefits? How? LOL
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the Gnome
The blockchain technology I am most taken by stems from Etherium and Binance.
This has got some semblance of having very sound foundations, both technical and social. I think it is potentially a far better construct than the US$ and their poorly engineered financial system, and has some sense of stakeholder communities, and other social concepts (I am not a socialist) that the US$ lacks totally. The US$ is really driven by elites for the elites, etc I guess their own defintion of "democracy" (democracy is certainly something they do not have in the USA despite the rhetoric.)
The Crypto space is the wild west, at best, but the base technology is what is really the valauble contribution.
So I am a big believer in Blockchain, technology. There will be very reputable organisations that do have and exhibit social repsonsibility, and there are a few now. Don't waste time with the wild west profiteers, see through this greed and stupidity. They feed into other speculators who follow greed and stupiditiy, and they end up covered in greed and mired in stupidity.
Nothing to see here, been going on for Millenia I suspect.
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the Gnome
Thats a great idea Cowichan! However with a project that is obviously marginal, a 3% royalty would kill it. I think there is a govt royalty already. I would go for a 1-1.5% NSR, and if the project did get going, then this could be on sold, for $10-30m, depending on a few factors.
Good thinking though! Hope they have done some thinking like this ...
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the Gnome
NOT ON TOPIC, BUT PERHAPS OF INTEREST
One of the great myths about our current industries of innovation is the use and abuse of gamification. Hardly what one would associate with productivity increase, but rather something opposite. Of course lots of debate,
How games are being harnessed as instruments of exploitation—and what we can do about it
"Warehouse workers pack boxes while a virtual dragon races across their screen. If they beat their colleagues, they get an award. If not, they can be fired. Uber presents exhausted drivers with challenges to keep them driving. China scores its citizens so they behave well, and games with in-app purchases use achievements to empty your wallet.
Points, badges, and leaderboards are creeping into every aspect of modern life. In You’ve Been Played, game designer Adrian Hon delivers a blistering takedown of how corporations, schools, and governments use games and gamification as tools for profit and coercion. These are games that we often have no choice but to play, where losing has heavy penalties. You’ve Been Played is a scathing indictment of a tech-driven world that wants to convince us that misery is fun, and a call to arms for anyone who hopes to preserve their dignity and autonomy."
https://www.amazon.com.au/Youve-Been-Played-Corporations-Governments-ebook/
Cowichan
I think CEY have been actively trying to seek partners (it is deifntiely in their best interests to do so, and to do this quickly), as they have had a very large data room open for a long time, and I know several groups have had a good look at it, none offering much for the Project. The killer has been the metallurgy (requires an ultrafine grind, less than 10 micron?) and the strip ratio (very high), in short.
regards
the Gnome
Thanks Torna
Its the exhorbitant privilege of the US and the US$ that is causing a lot of issues, elst call these distortions. Right now, the US$ being the most secure "asset" (I certainly do not think this) in many investors mind, there is a run towards it, which is now over pricing the US$. This causes other asset classes to be devalued. In Australia our currency has fallen to a low of 0.67, and trending down, despite a mining boom, and despite a $50 improvement in our budget.
So the short answer on gold is it is undervalued. The USD is hugely overvalued, which is not int he US best interest, so I cannot see this as lasting.
The FED continues to amaze me with their irrational solutions to problems they largely create. When they do not create the problems, then the sloppy US Bank system and Wall Street greed obliges. The trouble is that these insto's create mayhem in the global market, which is not what should happen in a well engineered financial system.
I think well run gold mining companies (not too many of these mind you), and or well run royalty companies are of great interest.
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the gnome
Economist Nouriel Roubini, who correctly predicted the 2008 financial crisis, sees a “long and ugly” recession in the US and globally occurring at the end of 2022 that could last all of 2023 and a sharp correction in the S&P 500.
“Even in a plain vanilla recession, the S&P 500 can fall by 30 per cent,” said Roubini, chairman and chief executive officer of Roubini Macro Associates, in an interview this week. In “a real hard landing”, which he expects, it could fall 40 per cent.
So its not a bad bet to expect there will be some downside adjustment coing inthe near futire to shares which will mean Gold will ....
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the gnome
Thanks Cowichan
My read, is that the deposit is problematical in terms of commerciality, IF ONE ASSUMES YOU NEED TO PRODUCE X00,000 OUNCES PER ANNUM. For various reasons this is what most companies do.
So I can imagine that for Centamin and "most companies" this is the outcome, and hence they could not sell the Batie Project. It simply did not provide a ROI.
So rather than spend money on trying to flog a dead horse to no one who is interested (!?) they just gave up on further losses, and ceded to government
It one way of getting the project off of managment time, and of giving to the rightful priject owners.
So I m not dismayed that it has not turn out l am happy that the Doropo 5 m ounces has come out of the Ampellla investment
It could have been done better, but this is the mining industry, and it is not the smartest industry in the room.
CEY needs to focus, and I believe it is , and this is part of the focussing process, and yes, I have misgivings, but they must move on. Death by a 1,000 cuts is not exciting
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the gnome
Thanks Spoonington
It does look like another act of stupidity, by both sides. One would have hoped that they could have learnt from some of the stupid conflcits of the last 80 years, but the only thing we ever learn is they never learn.
Whoever thought they would benefit is an interesting question?
Oddly the US seems well positioned to gain the most, and lose the least. Their citizens dont get exposed to a shuddering cold winter, no exposure to low flying shrappnel, minimal exposure to any collateral risks like nuclear powerstataion malfunction and so on.
Not sure what Germany was thinkiing, nor any of the other Europoean countries for that matter.
Its great to be at the bus stop near the end of the world, watching from afar, wondering. Well not a lot of wondering, just happy to be geeting a ringside seat at the AFL grandfinal comining up fast !!! Go the Swans !!!
and of course, go GOLD !!!
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the Gnome
CowichN
I have it from good sources, that Batie has been given back to the govt of Burkina Faso, who would be the rightful owners, given Centamins failure to comply legal constratints and for the project to meet Centamin hurdles. Can't sit on the pot without peeing too long, as they say
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the Gnome
WANT A BIT OF FUN...LETS LOOK AT A RECENT BIT OF PRESS FROM A US FIN JOURNAL
Investors expected sticky inflation to lift gold prices this year. Instead, the opposite happened?????
The most actively traded gold contract is on pace to decline for six consecutive months, with a loss of 14% through that period so far. That is a significant drop for an asset that is supposed to be a haven and marks the longest losing streak since September 2018, when prices fell 9.9% over six months. (IT WOULD BE IF THE GOLD MARKET WAS A FAIR, FULLY TRANSPARENT AND FRICTIONLESS MARKET WHICH IT CLEARLY IS NOT. THIS HAS BEEN POINTED OUT FOR DECADES, BUT STILL STUPID COMMENTS REMAIN. SIMPLY IF YOUR ASERTION IS THAT THE GOLD MARKET IS FAIR, RATIONAL ETC, THEN WHAT IS THE IRREFUTABLE EVIDENCE OF THIS?)
NEWSLETTER SIGN-UP...LOL!!!
Gold is prized by investors for its usual stability during times of turmoil (GREAT, IF IT IS A FAIR, TRANSPARENT AND WELL REGULATED MARKET). Prices jumped near all-time highs earlier this year, shortly after Russia’s invasion of Ukraine upended markets for stocks and commodities (WHY?). In early March, gold settled at a 2022 high of $2,069.40 a troy ounce. Now, it is down 7.9% so far this year, on pace for its worst annual performance since 2015.
Stocks are trading lower than they were in early March. The war has dragged on and concerns about inflation have only intensified. But the haven metal has been stuck in a trading range of about $1,650 to $1,800 since June (WHY?). Gold recovered some on Friday, rising 0.4% to $1,683.50.
BLAH BLAH BLAH.
IF YOU HAVE A BRAIN, AND BASE YOUR LIFE AND DECISIONS ON RATIONAL ARGUMENT, ITS A HARD TASK TO UNDERSTAND THIS SORT OF RUBBISH. RUBBISH IT IS FORM MY HUMBLE VIEW
THE VALUE OF GOLD WILL LONG LAST THE PATHETIC VIEW OF SUCH ARTICLES, WRITTEN ON THE BASIS OF $X/WORD, JOURNALISM, REGARDLESS OF WHETHER THE WORD HAS ANY TRUTH, BUT RATHER THAT THE WORD SELLS PAPERS OR PEOPLES SUBSCRIPTION FEES (OR WASTES PEOPLES LIVES!)
MY APOLOGIES FOR MY DIGRESSIONS
OFF TO SCOTLAND SOON
THE GNOME
The US sanctions are most famous for negatvely impacting on the innocent people of the country being sanctioned.
It would suggest this is fair game from those in power, and who feed on Other Peoples Money
https://www.brookings.edu/research/economic-sanctions-too-much-of-a-bad-thing/
A bit like the debt (interest of which is) hoisted onto innocent billions in developing countries, by their "democratically elected governements", a debt that winds up in Minsterial bank accounts in Switzerland and he Treasure Islands.
As for the MIR affair, it is a bit like the Ukraine V Russia confrontation being a proxy for the ever green US v Russia confrontation, with the Ukraine being the (very) sad meat inthe sandwich.
All quite a stupid affair (s)
Dont worry, my medication will kick in soon, and all will be well!?
the gnome