China almost certainly owns more gold than the US – here’s why that matters by: Dominic Frisby for Money Week
China almost certainly owns a lot more gold than anyone else – including the USA. But how much? And why does it need so much gold? Dominic Frisby explains.
If you thought the West was unprepared for inflation – or indeed for Russia – wait and see just how unprepared it is for this bombshell.
This is the biggest story in world finance, and yet nobody, bar your intrepid blogger, is reporting on it.
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For those without the attention spans to read all the way to the end, let’s cut to the chase and get the main point out upfront: China has more gold than the United States.
Why China might want to own a lot more gold than it’s admitting
We’ve seen many examples over the last few decades of how the United States weaponises the dollar, exploiting its status as global reserve currency.
The sanctions on Russia and its removal from the Swift messaging system this week are perhaps the most dramatic example of all. Russian civilians have had their wealth decimated (in fact, probably significantly more than decimated for most) almost overnight.
China will be surely watching all of this, learning from Russia’s mistakes and thinking it needs to de-dollarise as swiftly and discreetly as possible. Whether to protect its citizens’ wealth or its national interests, China cannot be beholden to a banking system that is run by the West – the US especially – and which is one of their weapons of war.
Both Russia and China have known they must de-dollarise for some considerable time, which is why both have been so steadily increasing their gold holdings.
Let’s start with Russia’s gold. The chart is courtesy of Nick Laird of goldchartsrus.com and it shows the Russian Central Bank’s accumulation to today’s figure of, give or take, 2,300 tonnes – roughly 74 million ounces (there are 32,150 troy ounces in a tonne).
That makes Russia, according to official figures at least, the fifth-largest gold owner in the world.
The table below, courtesy of the World Gold Council, shows the top 19 owners of gold, also their foreign exchange reserves and their percentage allocation to gold. The US has the most – 8,134 tonnes – followed by Germany, Italy, France and Russia.
The UK sits proudly in 17th position. Behind Kazakhstan, Turkey and Uzbekistan. Thank you Gordon Brown.
