Koos Jansen
BullionStar Blogs
Koos Jansen
Posted on 9 Sep 2013 by

Alex Stanczyk: There Is Way More Gold Going Into China Than Is Reported

Last week I had the privilege to talk to Alex Stanczyk, Chief Market Strategist for the Anglo Far- East group of companies. Below a few quotes - Alex also has a military background so that’s where we started.
Do you think there is going to be a war in Syria?

 

I hope not, but it’s possible. There is an old saying, when goods and commerce stops crossing international borders, than armies do. It’s a pattern throughout history, whenever economies slump one of the escapes is war. What we have to look at is energy as part of the equation. What a lot of people don’t realize is that energy is the lifeblood of the economy and that’s the entire reason for what’s going on in the Middle East. It’s essentially the entire world fighting over that area. There is pattern in the Middle-East wars; Libya wanted gold for their oil, Saddam said the same thing, just like Iran before they got sanctioned. The US’ objective is maintaining the petrodollar. Plus a large part of the US economy is the military industrial complex, if there is not weapons being sold to the US government from military hardware contractors it does affect the economy’s numbers. 

What’s going on in the Chinese gold market at the moment Alex?

I might have a small advantage over some other gold commentators. I have been invited to China on several occasions to speak. One of those occasions was to speak to the Chinese government – it was a think tank on monetary policy. I know China is ramping up its gold reserves massively during this period of time. I think their likely importing way more than the figures you and I see show. Our firm has got personal experience dealing with the guys that transport the gold, the security companies. One of our partners had lunch in the recent past with the head of the largest global operations company in security transport. He said there is a lot of gold that they’re moving into China that’s not going through exchanges. If the gold is for the government they don’t have to declare where it’s going. They don’t have to declare where it’s going in, or where it’s heading. If you look at the way the Chinese do things, why would they tell?  

…We talked to the head of the largest refinery in Switzerland and he told us directly that all that metal that’s coming out of London (904 tons YTD) is being refined into kilo bars and send to China, as well as metal that’s coming in from other areas in the world, that’s all going to China. It’s way more than is being reported or moved through the exchanges. All the kilo bars go to the Chinese people but the PBOC is likely only buying good delivery.

…The Chinese government is encouraging the people to buy gold for three reasons. Number one, it soaks up capital that would otherwise flow into bubble markets like real estate and equities. Number two, gold provides a strong base in case of inflation or other economic chaos. This provides stability and lowers the chances for civil unrest if there are economic problems. Number three, if the people would sell it back, it gives the PBOC a way to increase its reserves by stealth.Remember the PBOC is very secretive about their gold reserves. It buys a huge amount of gold off books using proxies, so it can keep it reserve numbers hidden. This is very Chinese if you understand the Chinese mindset. The next time they will report on their reserves it will be 3000 tons, probably higher. There is this game that the Chinese play, it’s called Weiqi (pronounced Way Chee), and it’s similar to chess. In Weiqi you have to surround your enemy slowly and lay a trap, and than close the trap all at once. That’s the way the Chinese think, they don’t really disclose what their plan is, they just move tiny pieces around the board in a seemingly incoherent way, but when all the pieces are lined up that’s when the trap is sprung. All of the government party leaders play this game, and the CEO’s and chairman of China’s largest businesses are all part of the party. 

…I have spoken to a highly placed member of CSRC and he told me directly that the government’s purpose over the next five year plan is to curb real estate and equities investment and get more people investing in gold. 

…If you see the massive demand that’s going over to Asia it’s really staggering. Year to date 1800 tons was imported into India and China, out of an annual mine supply of 2700 tons. It’s a massive imbalance, this never happened before.

Do you think gold is in a bear market at the moment?

 

I think we have passed the bottom. The fundamentals for the reasons it started going up in the first place never changed; the sovereign debt and the amount of money supply increase. Gold is only measuring the devaluation of paper currencies. This trend is been going on for many years and I don’t see it changing because the governments of the world don’t have solutions to the problems that they’ve got. 

Do you think the gold price is manipulated?

I think all markets are managed. The Fed is engaged in essentially open market operations on a daily basis. In the US you’ve got the FOMC and the president’s working group on markets etc. All of these organizations their purpose is to engage in open market operations, whether these be bonds, equities, currencies or gold. It would be naive to think they manipulate all markets but not gold. In fact, if you look at documents from the Fed they state very clearly that it is necessary to manage the price of gold in order to maintain control of the global currency system. I have copies from letters from the Federal Reserve that I have quoted from in various speeches in which this is described.

This is one of the letters from Federal Reserve that Alex has send me, it’s a must read.
 

 

Koos Jansen
E-mail Koos Jansen on:

  • Pingback: SGE Delivery YTD 1928 tons, 43 tons in Week 47 | In Gold We Trust

  • Peter Trzaska

    And here we have revealed in the clearest terms why a scam artist like Stanczyk has to persuade you, his dumb readers, that the price of paper gold will go up. The success of his masters’ business model depends on selling you that LIE. For Anglo Far East is just another of the storage scam companies.
    Stanczyk has a clear and well-founded reputation for misrepresenting the truth. Hie is just another salesman, employed by his company to peddle their lies and steal any Bullion you store with them. You store with anyone but yourself, you grant legal possession to the company. This is a well-documented scam, and many are its victims. Don’t join them!
    Stanczyk will blow hot and bothered and lie through his teeth in response, but ask yourself this small question… If Buba doesn’t trust another CB ally, co-member of the BIS, to store it’s Gold Bullion, how much of a fool must you be to store it with a company who has this intellectual lightweight and renowned liar, Stanczyk, as it’s salesman spokesman? Enough said.
    Now, watch with me the price of paper gold collapse as the paper gold game teaches it’s long-designated outcome?! That final comex trading halted price is what Stanczyj s criminal owners intend to pay you, in fiat, for your Gold Bullion. Dirty little scheme, well-worn, but with ever more besuited salesmen selling it.

Copyright Information: BullionStar permits you to copy and publicize blog posts or quotes and charts from blog posts provided that a link to the blog post's URL or to https://www.bullionstar.com is included in your introduction of the blog post together with the name BullionStar. The link must be target="_blank" without rel="nofollow". All other rights are reserved. BullionStar reserves the right to withdraw the permission to copy content for any or all websites at any time.