Koos Jansen
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Koos Jansen
Posted on 26 May 2015 by

Don’t Believe Everything You Read On The Internet

Wholesale gold demand measured by withdrawals from Shanghai Gold Exchange (SGE) vaults remains very strong this year at 45 tonnes in week 19 (May 11 -15). Year to date 903 tonnes have been withdrawn.

Shanghai Gold Exchange SGE withdrawals delivery 2015 week 19 dips

Shanghai Gold Exchange SGE withdrawals delivery only 2014 - 2015 week 19

Year to date withdrawals are up 20 % from 2014 and 8 % from 2013. In the next chart we can see the strength of SGE withdrawals in 2015 compared to previous years.

SGE withdrawals YTD

We can see withdrawals are stronger than ever. We must consider though, the gold withdrawn can be supplied through domestic mining output, import and recycled gold (and stock-carry over). Bare in mind, it’s not proven how much of what component has supplied the SGE this year. Additionally, withdrawals could have been made through the Shanghai International Gold Exchange (SGEI).

Don’t Believe Everything You Read On The Internet

Recently a website called Want China Times published a story titled, “China Could Crash US Dollar With 30,000 Tons Of Gold: Commentary”. I would like to share my opinion on this story about the Chinese gold market that has directly or indirectly reached many readers.

First I would like to go back to last year. On May 17, 2014, I published an article on the Chinese silver market, “Chinese Real Estate Debt Settled In Silver?”. Based on an article from Want China Times, I wrote real estate debt in the Chinese city Ordos was settled in physical silver. Real estate debt of 1 million yuan was settled with 500,000 yuan in silver, according to Want China Times (WTC). Regrettably I copied this story. A commenter on my post raised serious concern about the validity of the WTC story. On May 19, I wrote WTC an email asking for the original source their article was based on. Until this day I have received no reply on this inquiry.

On June 2, 2014, WTC published an article that was also eagerly read in the gold space, “Wall Street Concerned Over China’s Gold Hoarding”. WTC disclosed the source of this article to be a Chinese website called BWChinese, that quoted an analyst from Hong Kong, Leung Hai-Ming. Again my doubts on the integrity of WTC was triggered. I called WTC, BWChinese and tried to find Leung Hai-Ming. On the BWChinese website I couldn’t find anything that remotely resembled the story at WTC. On the phone BWChinese couldn’t help me either.

On June 3, 2014, I received an email from WTC in response to my question about the source of the “Wall Street Concerned Over China’s Gold Hoarding” article:

Dear reader of WantChinaTimes,

As your request on email and a call from Charlie in In Gold We Trust, we have found the story you mentioned in our website comes from an article in BWCHINESE. It was written in Chinese. Here is its link:


Thanks for your mail and call. I hope this info will be useful to you.


At the time my blog was titled In Gold We Trust.

When reading the link to BWChinese it became apparent to me the WTC article could not have been based on this story. The story on BWChinese was about gold, but did not resemble the content of the WTC article. Perhaps WTC thought I couldn’t read Chinese and thus wouldn’t figure out that there was no source, who knows. In any case they sent me a false link, which severely damaged their credibility.

I decided to publish my findings and write I was wrong on the Chinese real estate market in my post from May 17, 2014 – as I came to believe WTC is no credible source and real estate debt was not settled in silver. I had learned to be more skeptical, especially towards “Chinese” websites – WTC is based in Taiwan, and thankfully I can always correct myself when I’m wrong.

Back to WTC’s recent piece, the 30,000 tonnes story from May 15, 2015. In this article they refer to the source Duowei, again a Chinese “unreadable” website. And again, WTC is quoting a gentleman with a Chinese name, this time it’s Jin Zihou. From Want China Times:

China has the ability to crash the unstable US dollar with 30,000 tons of gold reserves, says Chinese economic observer Jin Zihou. 

Who exactly is Jin Zihou and where did he say this? Well, Jin Zihou is an author (/blogger) with no particular expertise of the Chinese gold market, he wrote an article published on May 6, 2015, at … wait for it … BWChinese. The Duowei story is nearly an exact copy of Jin’s story at BWChinese. Shortly we’ll discuss where he got the 30,000 tonnes number. Let us continue at WTC:

In a commentary posted online, Jin noted that former US Federal Reserve chair Alan Greenspan once said that the renminbi could become unexpectedly powerful in today’s financial system if Beijing would convert its US$4 trillion in foreign reserves into gold.

Greenspan once said that China could convert its $4 trillion reserves into gold, according to Jin Zihou. First of all there is no evidence Greenspan has ever said this. Second, would it be a smart thing to do? If China would sell $4 trillion and buy gold in a short period of time the global monetary system would collapse and the value of the dollar would evaporate, which would immediately halt global trade. This is not particularly in China’s interest. Needless to say, China is slowly trying to get out of its grotesque USD position, but it can not convert $4 trillion into gold any time soon. So, I’m not so sure about this statement from Greenspan.

UPDATE May 27, 2015: I got a few emails from people stating Greenspan did say China would convert its US$4 trillion in foreign reserves into gold, referring to this quote by Greenspan. If you read it you’ll notice a slight nuance, Greenspan said China could convert a “relatively modest part of its $4 trillion foreign exchange reserves into gold”, which is not the same as converting all foreign exchange reserves into gold. See the difference? The story by WTC was copy-pasted from several bits and pieces on the internet, exaggerated, twisted, a few Chinese names were added – because it sounds interesting – and from there it took of. This post is meant to show how “stories” on the internet, whether true or false, can be copied so many times that eventually people start seeing it as the truth.

More form WTC:

With the US dollar growing more unstable and China being America’s largest creditor, Beijing could potentially crash the US dollar with 30,000 tons of gold, Jin said.

However, Alasdair Macleod, head of research for GoldMoney, states that China could have easily piled up 25,000 tons of gold between 1982 and 2003, meaning its gold reserves could have exceeded 30,000 tons by now.

Alasdair Macleod has written an article in 2014 stating “the Chinese state has probably accumulated between 20,000 and 30,000 tonnes since 1983”. In my humble opinion this estimate is based on no evidence, but you can read the article and make up your own mind. Now, was the 30,000 tonnes number conceived by MacLeod or Jin? The only source I could find on the 30,000 tonnes number is MacLeod’s estimate. In a new Chinese jacket (Duowei, Jin) the story was transformed and made additional rounds. (if someone else has an additional source I would love to read it, please comment below.)

Starting from BWChinese via Duowei and Want China Times the 30,000 tonnes story was re-ignited and has spread over the internet. Shortly after Russian website Pravda.ru published, “China Saves Up 30,000 Tons Of Gold To Topple US Dollar From Global Reign”. Pravda did not include any links, but they mention Duowei as the source (so again, this was MacLeod’s estimate). Sputnik published, “Dragon Rising: China’s Gold Will Break World’s Dependence on US Dollar”. From Sputnik:

China can ultimately overthrow the US dollar domination using its 30,000 tons of gold reserves, according to Chinese economist Jin Zihou.

Clearly Sputnik used the WTC article. They continue:

Remarkably, Alasdair Macleod, a researcher and former Executive Director at an offshore bank in Guernsey and Jersey, pointed out that between 1983 and 2003 China could have secretly accumulated almost 20,000 tons of gold.

This is not remarkable, as Jin and MacLeod are the same source.

There have been many blogs and websites that copied the same story, all multiplied from the WTC article. My point being, the truth is hard to come by and the internet did not make the process more easy, at best only faster. From my personal experience I like to use hard evidence as a foundation from where speculation can be used to progress. Recently I wrote an article trying to separate facts from speculation regarding PBOC gold purchases, which you can read here.

My grand father told me as early as 1965, “don’t believe everything you read on the internet.”

Koos Jansen
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  • mmeru wa miraa

    the chinese cyber army plant propaganda in the internet.

  • rowingboat

    Nice twist there at the end if you intended it!
    “My grand father told me as early as 1965, don’t believe everything you read on the internet”

    • JanNieuwenhuijs

      Getting a lot of emails saying I made a typo ;-)

      • Gold or GTFO

        How can we trust your analysis then? You post in the internet ;) So does the gold price in BullionStar, it is in the internet. :D

        • JanNieuwenhuijs

          Well, you have to decide (keep thinking)for yourself what’s true I guess.

          • James Hammett

            You don’t look to be in your fifties

  • http://roacheforque.blogspot.com Roacheforque

    It’s not hard to imagine 30K tons between Russia, China and India combined, but China alone? Doubtful. Either way, no single country will ever emerge as a dominant hedgemon in our lifetimes. That model has proven itself unsustainable. Today we look at the combined holdings of EU members, as compared to the newly forming Eurasian Union holdings to assess the impact upon currencies as we transition from a debt based to an equity based global monetary system.

  • Mort

    Apparently the Want China Times reporting is as accurate Chinese tools, and about as reliable…

  • http://jessescrossroadscafe.blogspot.com/ Jesse

    Thank you for this. It is an ongoing problem with speculation, sometimes outrageous, being posted and then repeated in both the bull and bear camps on gold.

    It is not always easy to resist this, because readers become accustomed to ever more sensational and fantastic headlines, that drown out reasoned analysis.

    What hurts the most is when ‘name’ commenters fall into this, and thereby exert peer pressure on the others to pick up these obviously phony stories.

    • Big_Shiny_Au_Nuggets

      There’s an easy solution to the dilemma you allude to…

      Keep stackin’.

      If you don’t hold it; you don’t own it.

    • JanNieuwenhuijs

      It’s up to “us” to behave and criticize each other.

  • http://Caseresearch.com silverthumb

    If China has been amassing gold since the 80s, and they had more than the 1054 tons they admitted to in 2009, it is possible they have more than 10000 tons, surpassing the US. 30,000 sounds very high though.

    • JanNieuwenhuijs

      We should be careful saying “it’s possible hey have more than 10,000 tonnes”. Based on what? Why not 13,000 tonnes?

      Do you see this has nothing to do with facts, just pretending like we know anything about it which we don’t. Have you ever spoken to an insider at the PBOC that could roughly tell you how much gold was shipped in during the eighties? Or did you ever inspect freight letters of gold send to the PBOC?

      I often get tempted to speak as if “I know”. For one coz no one corrects me. That’s dangerous.

      • http://Caseresearch.com silverthumb

        You are right of course. I read MacLeod’s earlier post where he talked about the twentyfive thousand tons, and was surprised, as I didn’t know China was accumulating gold in the eighties. It is possible, given the time horizons the Chinese use and their secrecy. I will make a somewhat educated guess that China has almost, if not more gold than the US. If they don’t yet, they will if they continue at their present pace.

        • JanNieuwenhuijs

          Does the next chart look like China imported much gold before 2010?

          • Matt

            I agree with you, but weren’t you saying Official Gold might not be counted?

          • JanNieuwenhuijs

            Yes, I did. I think the PBOC can import gold invisibly. Question is, when did they start importing. Data suggests China wasn’t much of an importer at all before 2010. But who knows.

            Also, If the PBOC imported large quantities of gold, for example, in the nineties, this doesn’t mean this was for their vaults. Pre-2002 the PBOC had the monopoly on gold tarde in China (all trade flowed through the PBOC). PBOC imports could have been sold to jewelry shops (/the people).

          • http://www.tuks.nl/ Arend Lammertink

            The problem with this invisible imports is that there is no (hard) data to be found on which one can base an estimation.

            Yet, I believe they do indeed have between 20 and 30 thousand tonnes, based on statements by Jim Willie, who also says Russia has about 20 thousand tonnes of gold.

            The question then becomes: who are Jim’s sources and how reliable would these be?

            Jim bases these numbers on a source he refers to as “the Voice”, who he says is an international gold trader who a/o has been consulted in setting up national sovereign funds in Saudi Arabia. If this voice guy is indeed someone who is consulted with these kinds of deals, then he would be in a position to speak to insiders in the gold markets who could roughly tell him how much gold has been shipped from London heading East during the past several years.

            Jim says “the Voice” told him that about 1000 tons of gold have been shipped monthly to China, starting in 2011, IIRC. That would add up to about 50.000 tonnes, IF that trend would have continued until today. Jim also says that China and Russia together have over 50.000 tonnes.

            Of course, we have no way to check whether or not Jim’s source is who Jim says he is nor whether or not this data is correct. However, at least it is a source separate from McLeod coming up with the same numbers.

            What makes this story interesting to note is that both a Chinese ‘newspaper’ and the Pravda reported this and that the numbers do match with what Jim’s sources say. Personally, I do believe Jim’s numbers, so I believe we may be looking looking at news stories which were intentionally based on vague sources, yet contain a total number which appears to be not far from the truth. In other words: these stories may be ‘hints’ China (and Russia) are up to something.

            So, I would personally not be surprised if China were to announce they have over 20.000 tonnes in the not too distance future.

          • JanNieuwenhuijs

            Technically MacLeod is no source because it’s just his words, there is no evidence, same with Jim Willie.

            What makes this story interesting to note is that both a Chinese ‘newspaper’ and the Pravda reported this and that the numbers do match with what Jim’s sources say.

            WTC is not a Chinese newspaper! They write total nonsense and are based in Taiwan. Pravda is apparently BS as well (copied from WTC).

            Jim says “the Voice” told him that about 1000 tons of gold have been shipped monthly to China, starting in 2011, IIRC. That would add up to about 50.000 tonnes, IF that trend would have continued until today. Jim also says that China and Russia together have over 50.000 tonnes.

            Do you mind I don’t agree? Sureee, now it’s 50.000 since 2011, and 30.000 before it?? So 80.000 tonnes are in, China based on nothing.

            I wrote in https://www.bullionstar.com/blogs/koos-jansen/pboc-gold-purchases-separating-facts-from-speculation/

            11) For what it’s worth, I have two sources in the mainland, including a teacher in ‘economics and the gold market’ at the Henan University of Economics and Law in Zhengzhou City, that both tell me the PBOC would not buy gold through the SGE.

            Btw, a trader at a Chinese bank told me the same last week. My sources are good, but I don’t know for a fact if the PBOC buys gold through the SGE. I think they don’t.

          • http://www.tuks.nl/ Arend Lammertink

            “Do you mind I don’t agree? Sure, now it’s 50.000 since 2011, and 30.000
            before it?? So 80.000 tonnes are in, China based on nothing.”

            No, I don’t mind at all. In order to say something on the invisible part of gold story, one has to rely on the word of a number of analysts, one of which is you. Two others are MacLeod and Willie.

            When you say your sources said something to you, I take your word for it, as I do with Jim Willie. While that does not necessarily mean that what your/Jim sources say is correct, I do trust you/Jim to report accurately what your sources said. Further, based on what you/Jim reveal about the source your report comes from, I can get an idea about the reliability of the information itself.

            I personally believe Jim’s “the Voice” is an insider who leaks genuine information to Jim every once and a while, even though I have no idea about the identity of this source, just like I don’t know who your “a trader” or “a teacher” is, nor do I desire to know.

            All I know is that “an insider” gave Jim information based on which he says China has between 20 and 30 thousand tonnes of gold. There is indeed no evidence. All we have is Jim’s word that some insider told him so. Only time can tell whether or not this information is correct.

            However, if China indeed has that much gold, it should have left some traces in their book-keeping. I mean, at the current gold price, one would be talking about an investment in the order of $1 trillion. How could they have payed for that? If they would have diversified (some of) their reserves out of other fiat currencies (dollars and treasury bills) into gold and/or spent income they used to spend on dollar denominated investments on gold investments instead, there should be some item on their balance sheet which accounts for these hidden investments, probably with a cryptic description or something like “other investments”, which should show a significant grow since 2011 if Jim’s sources are correct.

            So, what I’m suggesting is that your sources might be able to find an item in the Chines balance sheets which has grown in the order of 1$ trillion over the past couple of years which could perhaps be associated with hidden gold investments, for example trough some vague “private corporations”, “banks” or “funds”.

            If you can find such an item and relate it to (graphs of) other items, you might be able to (partially) reconstruct a picture of what happened and thus come to an estimate based on hard data.

            In other words: if you start with the assumption there might be a hole in the order of $1 trillion somewhere in the Chinese balance-sheets, then you can look for it and might just find it.

            If you start with the assumption Jim is talking B.S., you won’t bother to look and thus never find it, even IF it’s there….


          • http://www.tuks.nl/ Arend Lammertink

            So, my suggestion to you is not to bother too much about the messenger, but to try and answer the question:

            “Can I confirm or reject the message by following the money?”

            The first step into answering that question would be the question:

            “How/where can/could I follow the money?”

            I don’t know the answers, but it might be worth the effort of trying to find out.

          • JanNieuwenhuijs

            My argument was meant to show you how I treat my sources. I mention them in a wider analyses accompanied by evidence, clues and speculation. This helps strengthen the sources – which in itself are worthless – and vice versa. https://www.bullionstar.com/blogs/koos-jansen/pboc-gold-purchases-separating-facts-from-speculation/ If only “anonymous sources” are used it doesn’t make a lot of sense. That’s how these outrages numbers have come to the golds pace.

            By common sense you can question numbers like “1,000 tonnes a month”, if compared to the alleged total above ground gold reserves or total value of PBOC FX reserves. Not possible.

  • jwr_47

    Most probably 99% of the lies in web-information are being published by authorities. 0.99% may have been caused by individual human errors. The remaining rest must be considered by “thermal noise” in the word processors….

  • Alter Schwede

    “First of all there is no evidence Greenspan has ever said this.”
    Yes, he did say it:

    • JanNieuwenhuijs

      “If China were to convert a relatively modest part of its $4 trillion foreign exchange reserves into gold”.

      Do you notice Alan does not say ALL of the $4 trillion? From WTC:

      “Jin noted that former US Federal Reserve chair Alan Greenspan once said that the renminbi could become unexpectedly powerful in today’s financial system if Beijing would convert its US$4 trillion in foreign reserves into gold.”

      WTC gathered a few bits and pieces, mixed it up, added 200 % and there was the story that has nothing to do with accurate reporting.

  • Folletto
  • Gold or GTFO

    I have a question Mr Koos. I read somewhere that gold is used by PRC government only as a support for yuan to enter the SDR and not for monetary system reset with gold standard, etc. Recent news from IMF appear to show that the PRC will get their wish regarding SDR. It is also said that PRC government being an authoritarian government will NEVER want gold standard since it removes government control from financial system through money printing. I think the “authoritarian PRC” argument does make some sense. What do you think?

  • Ryan

    They may not be “right”….. but I would not be surprised to learn that China DOES have 30,000 tonnes………….. They have been very busy over there

  • SRVES339

    Great last line Koos…

    Care to save me the search time and post your “fact based” figure here?

  • Folletto
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