It was recently reported in the Suzhou evening news that a local investor in the Nanjing area bought one ton of silver bullion over the counter from a local coin and bullion dealer. The total purchase value amounted to well over $1 million USD. The investor and a team of helpers had to haul twenty small trunks out of the store and into a moving van to complete the transaction. The investors silver bullion was denominated in small 1,000 gram bars. Despite the local dealer being an affiliate of a large state owned bank in China it took the dealer several months to acquire the full amount of silver.
The Guangzhou Daily also reported that another man went into a local bullion dealer in Guangzhou and bought 10 million RMB worth of physical silver. This amount converts to roughly $1.5 million USD. This Chinese investor and his assistants brought in eight suitcases full of cash to complete the transaction.
Welcome to precious metals investing…..Chinese style.
Demand for precious metals in China is skyrocketing. High inflation and a lack of investment options are the main culprits. With new housing regulations bringing housing investment to a standstill, investors are looking for new ways to invest cash. The housing market looks to go down or stay flat and the stock market is widely viewed as corrupt and risky. Physical Gold and Silver are becoming increasingly popular.
Everyone is aware that gold imports into China have been surging. In 2010, gold imports into China grew by 500%. Gold bars in several sizes are now sold through the retail banking chains all across the country. You can keep your cash bank account denominated in paper gold and instead of keeping your cash in a bank account earning a few points a year you can convert it online into paper gold and reconvert back to cash at anytime.
What is less well known is that China’s net imports of silver hit a record high in 2010 with the volume quadrupling to a total import amount of 3,500 tons. This is a major shift as China was previously a net exporter of Silver.
In 2005, China exported silver in the amount of 3,000 tons. China is the world’s 3rd largest Silver producer and yet they have now moved from the sell-side to the buy-side. Before last year the buy side was not that significant of a quantity but a four fold jump of imported silver in 2010 has changed the equation.
In China, Silver has served historically as the main medium of exchange in China. It was an official currency in China as far back as the Han Dynasty (206BC-220AD). Silver Ingots were used to horde wealth and Silver Taels were produced by the government to function as currency or to back a paper currency. The Chinese word for “Bank” is literally translated as “Silver House”
Believe it or not, the Dynastic governments would often over-print the currencies against the national silver holdings which would result in a collapse of the paper currency and a rush back to silver. Sound familar anyone?
Today, local silver and gold dealers are semi-government affiliated companies that often have a relationship with a major state-owned bank. They sell Silver physical bullion in bars of 500grams, 1,000 grams, 2,000 and 5,000 grams.
Not to be left out I myself rushed to the dealers last week to lock in some physical Silver. It was not as easy to order the Silver as I had expected. In the negotiation process they showed me a book full of receipts written for other investors who had already paid for their Silver but had not yet been delivered the metal. They have a huge back log of Silver purchases and are unable to fill demand. And the end of the day, I got to make my purchase and lock in the price. Not yet sure when I can collect. They said they will call me….next month.
By Dan Collins
Source: Financial Sense
Only physical gold and silver are real, everything else is an illusion.
– Exposed: The iShares Silver Trust (SLV) Scam
More on gold and silver:
– The Constraints on Silver Supply: Bob Quartermain
– No Silver? No Problem: US Mint Would Like To Know If You Will Accept Brass, Steel, Iron Or Tungsten Coins Instead
– Physical Silver (PSLV) Premium To NAV Surges To Record High
– JP Morgan And HSBC Silver Manipulation Explained In The New York Times!
– Louise Yamada: $80 Silver, $2,000 Gold and $140 Oil
– Silver Shorts Bloodbath!
– John Hathaway: $50 to $60 Silver, US Dollar in Danger
– Why Silver Is Headed To $500 Per Oz – Backwardation Explained
– Silver Touches Fresh 31 Year High of $34.90, US Mint Runs Out Of Bullion Blanks, Halts American Eagle Silver Coin Production
– CNBC: Total Silver Demand At 127% ! – The Case For $130 Silver
– Dollar Ready to Collapse, Silver Squeeze to Continue
– Even The Royal Canadian Mint Now Says It’s Difficult To Secure Silver
– Unprecedented: Silver Backwardation Surges To Over $1.00
– Eric Sprott on Silver: ‘THERE IS NOTHING LEFT’
– Fractal Analysis Suggests Silver to Reach $52 – $56 by May – June 2011
– Short Squeeze in Silver, Manipulators Getting Overrun
– Silver Takes Out Hunt Brothers High … When Priced In Euros
– Silver Backwardation Now ‘Unprecedented 73 Cents’
– Short Squeeze Takes Silver To Fresh 31 Year High
– Silver: Short Squeeze Could Be the Big One – Reaches New Multi-Decade High – Still In Backwardation
– Massive Short Squeeze in Silver, Gold to Hit New Highs
– London Source: Asians Buying SLV to Take Delivery of Silver
– COMEX Silver Inventories Drop To 4 Year Low. COMEX Default Or Hunt Brothers Redux?
– This Past Week in Gold and Silver
– ‘US Silver Term Structure Inverts As Supply Tightens’ – Reuters Article On Silver Backwardation
– JP Morgan Silver Manipulation Explained (Part 1-4)
– Silver Bullion Backwardation Suggests Supply Stress
– Silver Lease Rates Rise Sharply – Bond Yields in Portugal Rise to Record
– Silver Is Already In Extreme Backwardation! If The Same Happens With Gold, Then The End Game For The US Dollar With Hyperinflation Is Near
– Perth Mint Has Run Out of 100 Ounce SILVER Bars for at least 6 Weeks!!!
– Silver Breaks Its Golden Shackles And More Signs of Silver Shortages
– $6,000 Silver and the ONE BANK
– Canada’s Biggest Bullion Bank Scotia Mocatta: ALL SILVER BARS SOLD OUT
– US Mint Sells Absolute Record 6.4 Million Ounces Of Silver In January, 50% More Than Previous Highest Month
– Eric Sprott: Expect $50 Silver, Gold Possibly $2,150 by Spring
– US Mint Reports Unprecedented Buying Spree Of Physical Silver
– BullionVault.com Runs Out Of Silver In Germany
– Silver: Shortage This Decade, Will Be Worth More Than Gold (!!!)
– Silver Derivatives – China and JP Morgan
– Max Keiser: Want JP Morgan to Crash? Buy Silver!
– Max Keiser: Crash JP Morgan – Buy Silver!
– JPMorgan Silver Manipulation Explained (Must-See!)
– The Driver For Gold (Almost) Nobody Is Watching
– Forget $8,000, Gold Headed Much Higher, Dow To Lose 90% Vs Gold
– Pay Taxes In Gold? Obama Golf, We Buy Gold!
– Chief Investment Strategist John Embry: Gold to $1,650, Shorts to Get Crushed
– Gold Buying in China Jumps as Inflation Flares, Boosting Demand: UBS
– Gold Coiled – By June, the US Will Have Monetized 100% of All of The Debt Issuance – Hyperinflation May Be in the Cards
– Probable Black Swan Event Equals Gold Explosion
– Richard Russell: Possibility of Gold Breaking to New Highs
– Brazilian Billionaire Eike Batista Reaffirms $1 Billion Bid for Ventana Gold
– Americans Will Flock Into $5,000 Gold and $500 Silver
– Chinese Have A New Method To Buy Massive Amounts Of Physical Gold, Bypassing Comex And Any Form Of Delivery Limits And Problems
– Gold This Decade!!!
– ‘GoldNomics’: Cash or Gold Bullion?
– George Soros’ and John Paulson’s Biggest Holding Is GOLD
– China, Russia, Iran are Dumping the Dollar, Buy Gold And Silver
– Gold and Gold Mining Shares As a Percentage of Global Assets or ‘The Once In a Lifetime Ride’
And don’t forget to do this (!!!)…
– James G. Rickards of Omnis Inc.: Get Your Gold Out Of The Banking System
… or …
– US DEPARTMENT OF HOMELAND SECURITY HAS TOLD BANKS – IN WRITING – IT MAY INSPECT SAFE DEPOSIT BOXES WITHOUT WARRANT AND SIEZE ANY GOLD, SILVER, GUNS OR OTHER VALUABLES IT FINDS INSIDE THOSE BOXES!
– Egon von Greyerz of Matterhorn Asset Management: ‘A Hyperinflationary Deluge Is Imminent’, And Why, Therefore, Bernanke’s Motto Is ‘Après Nous Le Déluge’
– The Dollar Collapse Will Shock the World
– Marc Faber: ‘I Think We Are All Doomed’
– The Market Is Telling Us That The US Dollar Is Finished
– Global Economy? 23 Facts Which Prove That Globalism Is Pushing The Standard Of Living Of The Middle Class Down To Third World Levels
– IS THERE GOLD IN FORT KNOX?
– Tungsten Outperforms Gold, Returns 70 Percent In Last Year (And we all know exactly why!)
– Alert: Get Out of Your Dollar Assets Now!!!
– The Ultimate Cost of 0% Money
– These Central Banks Are Printing Money – Prepare Yourself
– Quantitative Easing Explained