China and Russia are Acquiring Gold, Dumping US Dollars

Global Research
Michel Chossudovsky

There is evidence that central banks in several regions of the World are building up their gold reserves. What is published are the official purchases.

A large part of these Central Bank purchases of gold bullion are not disclosed. They are undertaken through third party contracting companies, with utmost discretion. 

US dollar holdings and US dollar denominated debt instruments are in effect being traded in for gold, which in turn puts pressure on the US dollar.  

In turn, both China and Russia have boosted domestic production of gold, a large share of  which is being purchased by their central banks:

It has long been assumed that China is surreptitiously building up its gold reserves through buying local production. Russia is another major gold miner where the Central bank has been purchasing gold from another state entity, Gokhran, which is the marketing arm and central repository for the country’s mined gold production. Now it has been reported by Bloomberg that the Venezuelan Central Bank director, Jose Khan, has said that country will boost its gold reserves through purchasing more than half the gold produced from its rapidly growing domestic gold mining industry.

In Russia, for example, Gokhran sold some 30 tonnes of gold to the Central Bank in an internal accounting exercise late last year. In part, so it was said at the time, the direct sale was made rather than placing the metal on the open market and perhaps adversely affecting the gold price.

China is currently the world’s largest gold producer and last year it confirmed it had raised its own Central Bank gold holdings by more than 450 tones over the previous six years. Mineweb.com – The world’s premier mining and mining investment website Venezuela taking own gold production into Central Bank reserves – GOLD NEWS | Mineweb

The 450 tons figure corresponds to an increase in the gold reserves of the central bank from 600 tons in 2003 to 1054 tons in 2009. If we go by official statements, China’s gold reserves are increasing by approximately 10 percent per annum.

China has risen to now be the largest gold producing nation in the world at around 270 tonnes. The amount bought in by the government initially looks like 90 tonnes per annum or just under, 2 tonnes a week. Before 2003 the announcement by the Chinese central bank that gold reserves had been doubled to 600 tonnes, accounted for similar purchases before that date. Why so small an amount you may well ask? We think local and national issues clouded the central bank’s view as it was the government that bought the gold since 2003 and have now placed it on the central bank’s Balance Sheet. So we would conclude that the government has ensured central bank gold purchasing must continue. “How will Chinese Central Bank Gold Buying affect the Gold Price short & Long-Term?” by Julian Phillips. FSO Editorial 05/07/2009

Russia

Russia’s Central bank holdings are in excess of 20 million troy ounces (January 2010)

click to enlarge

Russia’s Central Bank reserves have increased markedly in recent years. The RCB reported in May 2010 purchasing 34.2 tons of gold in a single month. Russian Central Bank Gold Purchases Soar In May – China Too? | The Daily Gold

The diagram below shows a significant increase in monthly purchases by the the RCB since June 2009.

(click on chart to enlarge)

Central Banks in the Middle East are also building up their gold reserves, while reducing their dollar forex holding.

Gold reserves of GCC states is less than 5 percent:

Dubai International Financial Centre Authority economists released a report yesterday calling for local countries to build gold reserves, according to The National.

Despite a high interest in gold, GCC states maintain less than 5 percent of their total reserves in gold. Compared to the ECB, which holds 25 percent of reserves in gold, that leaves a lot of room for growth. http://www.businessinsider.com/gcc-boost-gold-holdings-2010-12#ixzz18FEqpTy3

GCC states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority (DIFCA).

Diversifying more of their reserves from US dollars to the yellow metal would help to offer central banks in the region higher investment returns, said Dr Nasser Saidi, the chief economist of DIFCA, and Dr Fabio Scacciavillani, the director of macroeconomics and statistics at the authority.

“When you have a great deal of economic uncertainty, going into paper assets, whatever they may be – stocks, bonds, other types of equity – is not attractive,” said Dr Saidi. “That makes gold more attractive.”

Declines in the dollar during recent months have dented the value of GCC oil revenues, which are predominantly weighted in the greenback. GCC urged to boost gold reserves

According to a report in People`s Daily;

The latest rankings of gold reserves show that, as of mid-December, the United States remains the top country and the Chinese mainland is ranked sixth with 1,054 tons of reserves, the World Gold Council announced recently.

Russia climbed to eighth place because its gold reserves increased by 167.5 tons since December 2009. The top ten in 2010 remains the same compared to the rankings of the same period of last year. And Saudi Arabia squeezed to the top 20.

Developing countries and regions, including Saudi Arabia and South Africa, have become the main force driving the gold reserve increase. … .

The International Monetary Fund (IMF) and the European central bank are the major gold sellers, and the IMF’s gold reserves decreased by 158.6 tons. (China’s gold reserves rank 6th worldwide – People’s Daily Online

It should be understood that actual purchases of physical gold are not the only factor in explaining the movement of gold prices. The gold market is marked by organized speculation by large scale financial institutions.

The gold market is characterised by numerous paper instruments, gold index funds, gold certificates, OTC gold derivatives (including options, swaps and forwards), which play a strong role, particularly in short-term movement of gold prices. The recent increase and subsequent decline of gold prices are the result of manipulation by powerful financial actors.

The Dilemma of False Terrorism

The Daily Bell
Anthony Wile

A New York Times article has attracted attention in alternative media circles for its portrait of Bernard von NotHaus, the "Rosa Parks of the constitutional currency movement."

Bernard von NotHaus

Entitled, "Prison May Be the Next Stop on a Gold Currency Journey," the article describes von NotHaus and his current predicament.

Mr. von NotHaus was convicted of using precious metals to back a currency he called the Liberty Dollar, which he says was "a private voluntary currency" for those conducting business outside the government's purview
.
His name is Bernard von NotHaus, and he is a professed "monetary architect" and a maker of custom coins found guilty last spring of counterfeiting charges for minting and distributing a form of private money called the Liberty Dollar.

... Mr. von NotHaus managed over the last decade to get more than 60 million real dollars' worth of his precious metal-backed currency into circulation across the country — so much, and with such deep penetration, that the prosecutor overseeing his case accused him of "domestic terrorism" for using them to undermine the government.

This is, of course, the crux of the matter. Is von NotHaus a "terrorist"? Here's his answer, according to the article: "This is the United States government ... It's got all the guns, all the surveillance, all the tanks, it has nuclear weapons, and it's worried about some ex-surfer guy making his own money? Give me a break!"

Of course, in a sense this is disingenuous. Simply by circulating honest money, von NotHaus WAS undermining thepower elite that apparently runs the US and much of the rest of the world.

It is this elite that has undermined money in the US, starting with experiments in monopoly fiat that increased after the Civil War. Before the Civil War, people in the US were relatively free to do what they wanted with money. Formally minted gold and silver were put into circulation via the US mint but plenty of privately circulated gold and silver made its way into the economy in non-coin form.

Gold and silver WERE money and banks that warehoused that money offered receipts that were circulated in lieu of the actual money metals. There were various problems with this system, but it was relatively free compared with what came later and granted a good deal of independence to the people using the system.
The end for any kind of sound money came with the Civil War and the rise of the US fedgov. As time passed, the power of the fedgov when it came to money expanded. Eventually, in 1913, the US Federal Reserve was formed.

The Fed was created by various supporters of money power. It was a private/quasi-public system of monopoly money that acquired its power by virtue of its close association with the government. But it was evidently and obviously controlled privately.

This private control has funded the expansion of the globalist agenda ever since. Essentially, the power elite has built a seamless construct of military, corporate and educational control that controls the world. Every part of this larger construct constantly evolves towards bigness and complexity.

The mantra, endlessly chanted, is one interconnected, "small" world and the enforcers of this meme are the West's Intel agencies and the larger judicial system.

Think of the power elite as a kind of metaphorical cuckoo bird. The cuckoo lays eggs in the nests of other birds and tricks the parents into raising the cuckoo chicks instead of their own. The entire Western demos has been hollowed out from the inside. The cuckoos are everywhere. Nothing is as it seems. Society's resources have been taken over and their purposes perverted.

The main modern lever of this ongoing takeover is the "terrorist." One who has come of age in the 2000s may well be aware of how this meme has been cultivated. In fact, the theme (as with many dominant social themes) goes back decades.

This meme would be expanded after 9/11 – a tragic attack that is commonly held to have been caused by an apparent CIA asset, Osama bin Laden. The "terrorism" theme has been expanded aggressively ever since.
The beauty of the expanding terrorism meme is its vagueness. "Birthers" and "truthers" and now "preppers" are all accused in various contexts of being "terrorists." The term terrorist is constantly evolving because it is meant to be a catch-all term.

Ultimately, anyone who challenges the authority of the state (and thus the money power that stands behind it and controls it) is at risk for being labeled a terrorist. This explains why US prosecutors can label von NotHaus a terrorist. The term is merely a convenient nomenclature. It has been purposefully "evolved" so that an extracurricular judicial system can be brought into effect.

Simply by redefining definitions over time − and manufacturing events to buttress the terminology − the elites have been able to bring into being a new class of felon (the terrorist) and a new and oppressive judicial system, as well.

Here at the Daily Bell, we call this evolution "directed history." The elites, having cleverly created a new kind of criminal and an extra-curricular judicial process, are eager to generate the next phase of directed history − the show trial to illustrate how things have changed.

The purpose is intimidation. Elites – panicked by the Internet and what we call the Internet Reformation – are attempting to realize their apparent plans for world government at breakneck speed. Nothing must stand in their way, certainly not alternative currencies that threaten their monetary chokehold.

My perspective would be that this wholesale creation will not be any more successful than other elite memes now foundering. The Internet has exposed the power elite and made their manipulations ever more questionable.
That doesn't mean they won't continue to try, however. The terrorist meme is an especially useful one. Over time it could be applied – via certain show trials – to almost anyone who challenges elite plans. Perhaps this is how the elites REALLY intend to deal with the threat of the Internet Reformation.

I will end with the observation that while I think this is a very clever plan (if I have analyzed it correctly), I am not sure it will work. Many people already understand the nature of elite manipulations. Directed history tends to work well when it is created in secret.

Like a magic trick, once its mechanism is exposed, it tends to be a great deal less convincing. Sure, the terrorist meme is a ubiquitous one but the more it is applied, the more people will likely see through it.
The more money power tries to oppress and manipulate citizens, the more it drives people to the Internet where they begin to discover the truth.
It is said the bigger the lie, the more people believe it. But perhaps the Internet is bigger than the biggest lie.

I certainly hope so.