Amazing!Last few paragraphs..."As for the gold, yes - several...

Amazing!
Last few paragraphs...

"As for the gold, yes - several billion in gold bars never existed and yet resulted in a cascade of subsequent cash flow events allowing tens of billions in funds to be released, "benefiting" not only founder Jia, but China's broader economy. Which is, needless to say, terrifying: because whereas just after the financial crisis China was engaged in building ghost cities, everyone knew these were a symbol of demand that would never materialize, even if the cities themselves did exist. However, it now appears that a major part of China's subsequent economic boom has been predicated on tens of billions in hard assets - such as gold - which simply do not exist.

As for what this means for the price of gold... well, Kingold is certainly not the only Chinese company engaging in such blatant fraud, and the consequences are clear: once Chinese creditors or insurance companies start testing the "collateral" they have received in exchange for tens of billions in loans and discover, to their "amazement", that instead of gold they are proud owners of tungsten or copper, they have two choices: reveal the fraud, risking tremendous adverse consequences and/or prison time, or quietly buy up all the gold needed to literally fill the void from years of gold counterfeiting.

Something tells us option two will be far more palatable to China's kleptoculture where one domino cold trigger a collapse of the entire financial system. What happens next: a panicked scramble to procure physical gold, one which even our friends at the BIS will be powerless to stop from sending the price of the precious metal to all time highs."