Michel Chossudovsky: China and Russia are Acquiring Gold!

Yes, sport fans, there is now 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 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, 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 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 has raised its own Central Bank gold holdings by more than 450 tonnes over the previous six years. 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 approximately10 percent per year. China has risen to now be the largest gold producing nation in the world, at around 270 tonnes. The amount bought by the government initially looks like 90 tons per annum, or just under 2 tons a week. Before 2003, the announcement by the Chinese central bank that gold reserves had been doubled to 600 tons,accounted for similar purchases before that date. Why so small an amount you might well ask? We think local and national issues clouded the central banks view as it was the government that bought the gold since 2003, and have now placed it on the central banks Balance Sheet.