After writing “The Big Reset” in 2013, Willem Middelkoop became intimately familiar with China and its quest to dominate the global gold market. In an interview, he explained how much gold China really controls and what it intends to do with it. This is the resumé.
China sees gold as a hedge against the financial system and the reserve holdings they have right now. They know we’re in the endgame with the dollar as a reserve currency. China still has $3.2 trillion dollar reserves. They have to accumulate gold to protect themselves.
China had a huge amount of gold before World War II, but most of it was stolen by the Japanese after an invasion. After the war when Mao Zedong declared the New Republic of China, the Kuomintang fled to Taiwan with the rest of the gold and China’s vaults were empty. So there’s a strong desire to rebuild their gold reserves.
Officials statements say the Chinese government only has 1.800 tons of gold, 2% of all foreign exchanges reserves. Russia already has 10% gold against its foreign exchange reserves, Europe and the United States have 50% or more reserves in gold. So China wants more gold, lots of gold.
Gold confiscation
But the Chinese know the financial history very well. There is an official Chinese program called “storing gold with the people”. Physical gold holding tops 10.000 tons, stored with commercial banks, with companies and the Chinese people. At least half of it is owned by Chinese citizens.
In a real crisis, they know they can confiscate gold and hand out paper money in return, just like the Koreans did during the Asian crisis and the United States did in 1933 when President Roosevelt forced American people to hand over their gold.
The Chinese government only buys small amounts of gold to keep the price of gold low. They want to buy gold as cheap as possible. They are very clever the way they play it. If they want to send gold to $3.000 per ounce, they could do so any week by bringing out a release they will convert 25 percent of their financial reserves to gold.
