China’s Missing Gold & Canadian Inflation

You may be reading in the news today that “against predicted expectations” Canadian inflation in May rose to 2.9% from 2.7% in April.  What had been anticipated was a cooling of inflation down to 2.6% in May.  I mean, of course, it was – that was the entire reason the Bank of Canada said they felt justified in lowering interest rates earlier this month for the first time since March of 2020.  Yes, inflation did come down from March to April, but the overall trend of inflation in no way suggested it was going away.  Rather, it suggested it was in a consolidation pattern waiting to either break higher or break lower.  Since finally falling below 3% in January of 2024, inflation has been the following:

January: 2.86%

February: 2.78%

March: 2.90%

April: 2.69%

May: 2.87%

Remember too, the rise of inflation in May would not have taken into account interest rates being cut in June, so inflation is on an upswing as fuel is being added to the fire.  In no way do we find rising inflation humorous at all as it directly correlates with a rising cost of living, which is bad for all Canadians, however, what we do find to be rather comical is the media pretending this rise in inflation came out of nowhere.  We stated multiple weeks in a row and can even take this back to 2023 based on the signs world economies were giving off, well before rates were ever cut that if and when rates were eventually cut that it would spur the second wave of inflation based on historical financial evidence of past stagflation periods like the period we find ourselves in today.

Making the news even worse, if we add back core inflation meaning food and energy, which are the most essential items to human survival, inflation jumps up to 4.6%, up from 4.2% in April.  It was also noted by Statscan that grocery prices have risen a whopping 22.5% since May of 2020.  Turning to shelter, mortgages still sit a staggering 23.3% higher since the same time last year, while rents jumped up 8.9% in May of 2024 from 8.2% in April.

It is becoming more and more evident that everything essential to survive is going to continue to rise in price as now that we are in so much debt due to the past 4 years of astronomical spending, the only way forward is a new financial system based on money with real value.  Again, this is why BRICS+ applications sit at well over 20 countries and many of these countries and more continue to stockpile as many commodities as they can namely oil, rare earth minerals, gold, silver, and means of food production.

Speaking of gold, there was a report out of China this past week that there is an odd discrepancy in the reporting of official gold reserves coming out of the People’s Bank of China since 2022.  Economist Chen Long compared total gold holdings in China (retail buyers, regional banks, and the People’s Bank of China) with the country’s import and production numbers.  Official reports have China adding 431 metric tonnes of gold, however, based on comparisons, it would seem an additional 1775 metric tonnes of gold had been added to Chinese vaults.  Going back to 2022, an additional 1400 tonnes appear to be unrecorded adding to over 2700 tonnes of “missing” gold in a two-year span.  This would account for more than half of the world’s annual production and would put China’s official gold reserves near 5,000 metric tonnes.

More on China, it was also reported that Middle Eastern sovereign wealth funds increased their investment within China by a staggering 2200% in 2023, moving $2.3 billion worth of capital into the country, up from $100 million in 2022.  All the while, Saudi Arabia sold over $15 billion worth of U.S. stock through Jan-Mar of 2024.

A financial shift is underway as countries slowly, but with increasing pace shift away from United States Dollar denominated assets and towards hard assets with tangible value and real world uses.  With as little mainstream media attention as gold and silver are receiving, what is clear is that with these precious metals out of the spotlight countries are using this opportunity to purchase as many ounces as they can.  Reminder, there is not enough of either metal for everyone on earth to have even half an ounce of each.  Those turning over the system anew need time to accumulate the appropriate assets because if they were racing the entire world, they would never accumulate as much as they desire.  It is understood by the banks operating the system prior to the citizens that operate within it, which assets will be crucial to own, smart money appears to be purchasing the same assets the banks are prioritizing… silver and gold.