truth, social and otherwise
market vibes
11/11/2024
"Honor to the Soldier, and Sailor everywhere, who bravely bears his country's cause. Abraham Lincoln, 1863
In the news
China’s trade surplus is on track to hit a fresh record this year. As you can see (chart below) the metric was in steep decline during Trump’s first term but it has been in vertical ascent during the Biden years, according to BBG’s report this morning. Imbalances are also growing with many other nations. [China now exports] more goods to almost 170 countries and economies than it buys from them, the most since 2021.
As we know… when a gold standard was the method of settling trade imbalances, gold was transfered from the trade debtors to the trade creditors. In 2022 China imported 1343 tons of gold. China imported => 1400 tons in 2023 (AI search). And estimates for Chinese gold imports 2024 are =>1800 tons. In addition China has been the world’s largest gold producer since 2007, producing 370 tons in 2023 and estimated to exceed that in 2024. China does export approximately .03% of its imports so a modest haircut for that.
The sum total of all new gold added to the left side of the Chinese ledger tallies to > 5,500 tons. China’s official gold reserves in 2022 were ca 2000 tons bringing China’s estimated gold reserves to within 500 tons of America’s 8000 tons nestled safely in Fort Knox, Kentucky.
However by mid 2025 China will probably hold the largest reserves of gold in the world according to these numbers and trends. Although Trump’s pre election promises imply these trade imbalances will improve in our favor, it will take many years to reach parity… if ever.
Bear in mind total gold production this year is expected to be a record 4000 + tons of which China will import nearly half of it and still be the largest producer (retaining ca 320 of 370 tons).
It’s been a very newsy weekend. Let’s see see what the markets have to say about coming days.
