The Phaserl


Up To $80 BILLION in Gold-Backed Loans Are FALSIFIED, Chinese Auditor Warns

from ZeroHedge:

As the probe into alleged fraud at Qingdao continues to escalate (with liquidity needs growing more and more evident as Chinese money-market rates surge), Bloomberg reports that China’s chief auditor discovered 94.4 billion yuan ($15.2 billion) of loans backed by falsified gold transactions, in “the first official confirmation of what many people have suspected for a long time – that gold is widely used in Chinese commodity financing deals.” As much as 1,000 tons of gold may have been used in lending and leasing deals in China and Goldman reports that up to $80 billion false-loans may involve gold. As one analyst noted, this was unlikely to have a significant impact on the underlying demand for gold in China and as we have pointed out before, any unwind of the Gold CFDs would lead to buying back of ‘paper’ gold hedges and implicitly a rise in prices.

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2 comments to Up To $80 BILLION in Gold-Backed Loans Are FALSIFIED, Chinese Auditor Warns

  • c.i.

    I really do not know what to say……………..

    After all of this time?

  • rich

    Asked and Answered: Some Thoughts on Leverage in the Great Gold and Silver Frauds

    The price of gold as it is now determined largely in the West is divorced, almost shockingly at times, from the fundamentals of supply and demand in the real world. One only has to look at the leverage at the Comex and the LBMA to get a sense of it. In the case of gold this is also driven by the willingness of large holders of gold, including central banks and some funds, to lease their assets into the market and incur counterparty risk at market distorting prices.

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