China and IMF Gold Sales

China’s recent veiled threats towards the establishment have been taken to heart.  As China announced increased gold reserves from 600 to 1,054 tonnes it was an obvious warning.  Initially I thought it was a direct threat against the ocean of treasuries being issued, but I think I have a clearer answer now.  China wants the IMF’s gold!

For years the IMF has “threatened” to sell their gold.  The final approval had to come from the US since they have veto power.  It finally came this past week.  For the gold they will receive an insignificant amount of money in today’s terms of $13 billion in paper, sorry I mean bits, or computer digits or whatever you want to call them, which can literally be created in the blink of an eye.  The 400 tons of gold being traded for this instant gratification would take a full two months of production from every gold mine in the world to produce.  Producing gold is quite a lot more labor intensive and thus gold’s worth is, or should be, much greater.
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