FRAUD! China Exposed for Using Fake Gold as Collateral (VIDEO)

China has been embroiled in a scandal where in it used 83 tons of gold as collateral. The 83 tons of allegedly pure gold was stored in the creditor’s coffers of Kingold in June of 2020. It was supposed to be backing a $16 billion yuan loan. This was reportedly 22% of China’s gold production or 4.2% of its stated gold reserves as of the year 2019. The takeaway here is that at least 4% of China’s official gold reserves may be completely fake because that 83 tons of gold was actually copper.

Of course, this assumes that there is no additional fraud. In total, Kingold pledged tons of gold that it didn’t have. The problem of fraud in China is so pervasive and so multi-headed that it’s hard to keep track of. China doesn’t work on typical capitalistic principles. China works on cronyism and personal connections. As proof of this the founder of Kingold was allowed to do anything that he wanted for the most part, including counterfeiting 83 tons of gold bars to get billions so he could participate in China’s housing sector.

It was only by happenstance that the fraud that is the 83 billion tons of copper, not gold, was discovered. The gold bars never actually existed. Even though they did not exist, this collateral was used repeatedly for cash flow in the 10s of billions. This didn’t just benefit Kingold, but China’s economy at large.

This is very reminiscent of China’s ghost cities. During the housing boom in China multiple builders would create high rise apartments for which there were no tenants. There were no buyers and half the time the apartments weren’t finished. One has to wonder how much in China is actually real and how much is a facade. Now with this fake gold a lot of China’s economy is based upon collateral that may or may not exist in the real world.

Kingold is not the only company that is fraudulently operating in China. It remains to be seen how much of China’s economy is legitimate and how much of it is fraud. If creditors or insurance companies decided to start testing the waters to figure out what’s collateral and what’s fake, they may discover that instead of gold they now own a bunch of copper. China can investigate and reveal the fraud. This risks tremendous adverse consequences at a time when their economy is slowing down due to Covid-19 lockdowns. They could quietly fill the void where fake gold is with real gold and other such fake assets also.

Kingold isn’t a minor player either, it is the largest privately owned gold processor in China’s Hubei province. It is listed on the NASDAQ Stock Exchange in New York. The company is led by chairman Jia Zhihong, an ex-military person.

This is just another reminder the capitalism in China is not the same kind of capitalism as we have in America. In fact, one can argue it’s not even capitalism in the traditional sense. The capitalism that’s in China is much more like nepotism with capitalism mixed or crony capitalism. You could even go so far as to say it’s a type of fascism if you go by the old definition of fascism which is when the government owns the companies. Why American companies are doing business in China with companies that are at least partially or secretly controlled by the CCP when it is obviously not in their best interest long term due to the fraud is a question, we all should be asking.

This story syndicated with permission from My Patriot Post

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