Paper Money Burning. Gold/Silver/Bitcoin DGAF.
[ZEROHEDGE] When 3 Trillion Just Isn't Enough: Analysts Fret Over "Worrying" China Reserve Burn“China Finds $3 Trillion Just Doesn't Pack the Punch It Used To,” a Bloomberg headline from Friday morning reads.
“China’s $3 trillion-plus in foreign currency reserves, the biggest such stockpile in the world, would seem to be a gold-plate insurance policy against the country’s current market chaos, a depreciating currency and torrent of capital leaving the country,” Bloomberg writes, before citing a number of sources who say that in reality, $3 trillion aint what it used to be.
“Some Chinese reserves may have already been committed to fund pet government projects like the Silk Road fund to build roads, ports and railroad across Asia or tens of billions in government-backed loans to countries such as Venezuela, much of which is repaid through oil shipments,” the piece continues. “Then there are other liabilities that China needs to cover, such as the nation’s foreign currency debt to finance and manage imports denominated in overseas currencies.”
As we discussed at length on Thursday, Beijing burned through its UST stash at the fastest pace on record in December, liquidating some $108 billion in reserves in a desperate attempt to manage capital outflows and the yuan devaluation.
[ZEROHEDGE] China's Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In LondonMost curiously, the bank's London gold vault only became operational in June of 2014, more than two years after launching the project. It can store some 1,500 tonnes of gold and was built and managed by British security services company G4S.
As Reuters further noted, with other banks withdrawing from the commodities business to cut costs and reduce their regulatory burden, it might be difficult for Deutsche Bank to find buyers amongst its nearest peers. However, one possible buyer is general LBMA-member, Chinese bank ICBC, which we said at the end of 2014, was trying to build a presence in London.
In any case, the list of potential buyers for DB's brand new vault lease remained a mystery, and perhaps our revelation of the exact location of this vault, something potential buyers tend not to appreciate especially when said vault will house up to 1,500 tons of gold, or over $50 billion worth of "inventory", may have dissuaded some. As a reminder, the "secret" location of the Deutsche Bank vault, which as revealed in the G4S building application, is located in the Park Royal complex, and specifically at the 291 Abbey Road, London NW10 7SA location.
As it turns out, one persistent buyer failed to be dissuaded.
According to Reuters, as was rumored one year ago, China's largest bank - and in fact the world's largest bank - by assets, ICBC Standard Bank, is buying the lease on Deutsche Bank's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies told Reuters.
China's ICBC, which took a controlling stake in Standard Bank's London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.
China is burning its paper and stacking gold faster than ever. The time of reckoning draws near....
