Over the years, we have periodically reported of the occasional gold bar discovered as counterfeit in Manhattan's Diamond District which instead of containing the yellow precious metal would be filled with gold-plated tungsten or in some cases copper. The news would spark a brief wave of outrage, prompting physical gold holders to run ultrasound spot checks of their inventory, at which point interest would wane and why not: buyer, after all, beware in gold as in every other market, and if someone is spending thousands to buy fake gold, well that's Darwinism in action.
Yet one market which seemed stubbornly immune to any counterfeiting was that of physical gold in China, which was odd considering that over the past decade China had emerged as the world's biggest counterfeiter of various, mostly industrial metals used to secure bank loans, better known as "ghost collateral", and which adding insult to injury, would frequently be rehypothecated meaning often several banks would have claims to the same (fake) asset.
All that is about to change with the discovery of what may be one of the biggest gold counterfeiting scandal in recent history. And yes, not only does it involve China, but it emerges from a city that has become synonymous for all that is scandalous about China: Wuhan itself.
With that preamble in mind, we introduce readers to Wuhan Kingold Jewelry Inc., a company which as the name implies was founded and operates out of Wuhan, and which describes itself on its website as "A Company with a Golden future."
In retrospect, it probably meant "copper" future, because as a remarkable expose by Caixin has found, more than a dozen Chinese financial institutions, mainly trust companies (i.e., shadow banks) loaned 20 billion yuan ($2.8 billion) over the past five years to Wuhan Kingold Jewelry with pure gold as collateral and insurance policies to cover any losses. There was just one problem: the "gold" turned out to be gold-plated copper.
Some more background: Kingold - whose name was probably stolen from Kinross Gold, one of the world's largest...
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LEAB CHINA ALONE,, DATS RACIST !1!!!!1!1!!!
ReplyDeleteEM CABBAGE SOUP FOADDY-FI !!11!11!!!1!
The first tip off was “Wuhan”
ReplyDeleteDo the Chinese do ANYTHING honestly?
ReplyDeleteThe Chinese are in a race with musloids to see which group can deceive the rest of the world the most.
ReplyDeleteRight now, it's a dead heat, with China looking like a real contender.
83 tons? Per company. I'll bet China itself, as a nation, has just as much real gold as Fort Knox. So much for Nixon's betrayal. Or was that a poison pill, of greed, he offered them? A real devil's advocate among weak base men? *grins*
ReplyDeleteIt does make me wonder who does have gold though. It ain't any central bank (government) or fortune 500 (or worldwide 5000). Those are choking on debt. I do know, whoever has the gold? Is hiding most of it and leading world thinking and policy with the slim gold hooks and chains it does expose.