China's PAGE: Where's the gold?

The flow of gold is a a sure indicator of the flow of political and economic power in the world.  It has been so for the last 5000 years.  It is so now, regardless of whether Warren Buffet thinks it should be so.

The flow is steady right now - from West to East.  When China's Pan Asian Gold Exchange goes live in june everyone will realize this: 

06:24 17Feb12 -China central bank may be behind surge in gold imports

* China stockpiling at commercial or government levels boost imports

* China cbank avoids direct purchases from overseas market

By Rujun Shen

SINGAPORE, Feb 17 (Reuters) - China's central bank, flush with foreign reserves, may be behind the surge in the country's gold imports late last year, but industry sources said the bank usually favours sourcing gold domestically over direct buying from overseas.

China's gold production, combined with imports from Hong Kong, exceeded consumer demand by 140 tonnes in the last quarter of 2011, according to Reuters calculations based on data from the World Gold Council (WGC) and Hong Kong trade numbers.

Purchases made by, or on behalf of, the People's Bank of China (PBOC) could account for the shortfall, analysts said.

"There is a possibility that China has bought gold on international markets. Gold prices were generally up last year and I reckon there must be a China factor there," said an economist at a top government think-tank in Beijing, who declined to be identified.

"China always hopes to boost the quantity and proportion of gold reserves to hedge risks."

The PBOC rarely comments on its gold holdings, and has not reported any official change in its gold reserves in nearly three years. It says it holds just over 1,000 tonnes.

The value of China's foreign reserves fell marginally in the fourth quarter of 2011, which some analysts say is evidence against speculation that the PBOC bought large amounts of gold.

But if the PBOC has changed tack and decided to become a buyer on the global gold market, it would hardly come out and say so, because its purchases would spark a rally in prices that would increase its own bill, analysts said. 

AND:

Hiding the Elephant: Fort Knox’s Vanishing Act

Kal Kotecha
Posted Feb 18, 2012

 Executive Order 6102 on April 5, 1933 made it a criminal act to possess gold coins, gold bullion and gold certificates within the continental United States and ordered that the hoarded gold be delivered to the Government on or before May 1, 1933. The official price of gold was raised from $20.67 to $35/ounce.

Although it is unknown just how much gold was confiscated by means of Executive Order 6102, numbers suggest that by January 1934, there were 195.1 million ounces and 227.9 million ounces by August 1934.

The Government had to have some place to hoard the confiscated gold. So, Executive Order 6102 paved the way to Fort Knox.

The U.S. Mint states that 147.3 million ounces of gold are now tucked into Fort Knox. 
While Treasury officials insist that the “gold is all there”, why the resistance to a public audit? Congress begs off, saying it will cost US$60 million to test the gold. Other figures bandied about suggest US$15 million. Other so-called experts contest both figures, stating that an independent audit and assay could be conducted for as little as US$15,000.

More nefarious are that the numbers don’t add up…and never have. In his article The Great American Disaster: How Much Gold Remains In Fort Knox?, dated August 27, 2010, Chris Weber states that, at their peak in 1949, the Fort Knox reserves reputedly numbered 701 million ounces – 69.9% of all the gold on the planet. The latest figures reported by the U.S. Mint state that 147.3 million ounces of gold are now tucked into Fort Knox. Treasury subsequently downgraded this figure from 264 million ounces of gold, a decline of 79%!


For over 50 years, while domestically it was a crime to hold gold, there is little doubt that well-heeled Americans - and America’s enemies, operating offshore, were able to procure gold at the bargain basement price of $35/ounce.
Not surprising that Fort Knox’s 22-ton door is locked to an audit. For almost 40 years, no visitors have been allowed in the grounds of the Gold Depository. 


In his article “The Great American Disaster: How Much Gold Remains In Fort Knox?”, Chris Weber outlines details about the one “audit” of Fort Knox, as follows:

“The only audit that has ever been done of the gold inside Ft Knox was done days after Dwight Eisenhower became President in January of 1953. After 20 years of Democratic presidents, the American public wanted to be sure that the gold confiscated from them was still there. Thus, the new President ordered an audit within hours after taking office.
The central problem was that it wasn't much of an audit. To sum it up:

1. Representatives of the audited group were allowed to make the rules governing the audit. No outside private experts were allowed.
   
2. Those government bureaucrats involved were inexperienced in their tasks, by their own admission.
   
3. The entire audit of the largest gold hoard ever concentrated in history lasted only seven days.
   
4. Only a fraction of the gold was actually tested. Later, the officials put this fraction at just 5%.
   
5. Based on that fraction, the official committee reported that, in their opinion, all the holdings would have matched their records if they'd all been tested.
   
6. If the audit was accurate, the fact remains that almost 80% of it went overseas in the coming years. If the audit was not accurate, the amount of gold lost could have been even more. “
   

On September 23, 1974, Mary Brooks, the Director of the United States Mint, led a tour of members of Congress and the news media through the USBD. There was no audit or inventory of the gold and no other public “inspection” has been allowed since then.

Why won’t the Mint comment about how much gold is there? Perhaps the acid test is not so much as what has happened to the gold in Fort Knox; but rather is there gold in Fort Knox? And if so, how much…..or how little?