06/22/10 Baltimore, Maryland – Today, we add a new phrase to our gold bubble lexicon: “Peacocking.”
How else would you explain this: Saudi Arabia “restated” its gold reserves yesterday, right as the spot price found an all-time high of $1,265. Last week, SAMA, the shady Saudi sovereign wealth fund, held 143 tons of gold. Today – 322 tons!
The Saudis gave little explanation other than a humble “adjustment of the SAMA’s gold accounts.” Heh, 100+%? That’s some adjustment.
China did the same thing roughly a year ago. Having not reported its gold holdings in years, the Chinese quietly announced they were holding over 1,000 tons of the metal, double what the world expected.
In a world dripping with debts and sovereign risk, it should come as no surprise to see governments strutting and letting unfurl their share of the world’s most sought-after “commodity.” It’s a game. Who’s got the biggest… umm… vault, so to speak.
The US still claims to have the fullest rack, with 8,133 tons of gold buried somewhere in the national backyard, a pole position the US has held since the end of the Second World War.
Around the world, central bank purchases of gold reached 425 tons last year – the first stockpile expansion since 1988 and the largest since 1964.
The Russians led the way, increasing their gold holdings by 142 tons – a 29% boost – last year alone.
You can expect that trend to continue. At a conference last week, Yin Zhongqing, vice chairman of the finance committee for the People’s Congress, suggested the Chinese government increase its holdings in oil and gold.
“The government should also cut overseas debt holdings and increase equity investments,” Yin advised. “China should adjust the asset structure of its foreign reserves and achieve the goals of making the investment safe, liquid, and preserving and adding value.”
Hmmn…
Addison Wiggin
for The Daily Reckoning
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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