China Curbs Gold Imports

[CoinCube]

Gold Slips As China Curbs Imports To Slow Capital Flight
http://www.zerohedge.com/news/2016-11-30/gold-slips-china-curbs-imports-slow-capital-flight

While all eyes were on India (as rumors swirled of an imminent gold import ban), The FT reports that China curbed gold imports in the wake of government attempts to clamp down on capital leaving the country, according to traders and bankers.

Some banks with licences have recently had difficulty obtaining approval to import gold, they said — a move tied to China’s attempts to stop a weakening renminbi by tightening outflows of dollars, the banks added.
 
The hit to gold imports comes as China tightens restrictions on overseas deals by state-owned companies in an effort to limit capital outflows that has seen the renminbi fall to its lowest against the dollar in eight years.
...


The limits on imports bite as the weakening renminbi raises Chinese investors’ interest in gold. Lower gold prices have also triggered more buying.
 
The combination of tighter quotas and an uptick in demand caused the premium for gold in China over the international gold price to jump as high as $46 in the past few weeks, according to data from Wind Information. Normal levels are about $2 to $4.
 
In an effort to ease that premium, Chinese banks have been allowed to import gold under their quotas using the offshore renminbi, one banker said. Although still high, the premium for gold on the Shanghai Gold Exchange has since fallen to $26

[pitham1]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

[Fortify]

I wonder how much gold is actually mined within China itself? I can bet that the people who hoard large amounts of gold will have no problem getting it in and out of China. Comparatively little is used for actual manufacturing or practical uses, so it's a quick way to block investment. The elite are protected while making it harder for anyone else to cross them.

[IIOII]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

Don't bet on it. First of all, it will boost smuggling and black market activity. Bitcoin is a niche product, only few people are aware of it as an investment alternative. The direct impact of China news on Bitcoin prices is greatly exaggerated.

So I don't expect a rise in BTC price because of it. Even if the scenario you are pointing out becomes reality, restrictions for Bitcoin purchases would not succeed on a large scale, because you can't ban p2p trade.

[beerlover]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

There were rumors that India will regulate its citizen's gold savings. India is one of the biggest importer of gold. So, it will be true people may start switch over to digital gold for many reasons.
China's policies are usually for long term, we can not expect immediate impacts.

[European Central Bank]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

not that gold fans would switch to btc en masse, but if they did then that's exactly what would happen.

enough people seem to think bitcoin exists in a vacuum where no outside pressure applies to it, but it's interlinked with normal banking and businesses so it's equally easy to deter the vast majority who would otherwise consider it.

[alyssa85]

Bitcoin is a niche product, only few people are aware of it as an investment alternative. The direct impact of China news on Bitcoin prices is greatly exaggerated.

So I don't expect a rise in BTC price because of it. Even if the scenario you are pointing out becomes reality, restrictions for Bitcoin purchases would not succeed on a large scale, because you can't ban p2p trade.

This. A very few people know about bitcoin and it is unregulated in places like China precisely because so few people are using it to move money. If it suddenly became genuinely popular, they'd ban it in a heartbeat.

[deisik]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

Don't bet on it. First of all, it will boost smuggling and black market activity. Bitcoin is a niche product, only few people are aware of it as an investment alternative. The direct impact of China news on Bitcoin prices is greatly exaggerated

But gold is a niche product too

How much physical gold is being freely traded on commodity markets? I don't think that much, relative to the amount of gold held in vaults or used for jewelry. Indeed, this amount will still be far greater than the volume of bitcoins traded. But let's not forget two things. First, not many people can actually buy gold, since you can't buy, say, 0.1 gram of gold (even 1 gram gold plates pass more like jewelry) but you can easily buy bitcoins worth of that much gold. Second, most of bitcoin trading today is done on Chinese exchanges, thus the Chinese buyers constitute the majority of Bitcoin buyers across the world. In this way, we can well expect that the likely shortage of gold could be partially compensated by bitcoins in the future. Bitcoin is a gold substitute as a store of purchasing power, at least, to a degree (just like the US dollar)

[European Central Bank]

But gold is a niche product too

i've never met anyone in my whole life who owns any gold but i guess it's the type of thing you might not admit to.

but attitudes to gold are very different around the world. in the west it's often regarded as the type of thing oldies and cranks are into. in places like india it's a very different deal. i'm not sure what the chinese attitude is.

[r0ach]

*The other Occam's Razor solution would be ditching digital altogether and using a physical object as a currency (silver) that you can hold in your hand and defend with an AR15.  Usury normally revolves around the act of skimming the money supply from the general populace and it's pretty damn hard for some guy to shave some clippings off your silver when it's being defended with an assault rifle.  Going full digital just makes things batshit easy for them no matter what type of currency you create.

[deisik]

But gold is a niche product too

i've never met anyone in my whole life who owns any gold but i guess it's the type of thing you might not admit to.

but attitudes to gold are very different around the world. in the west it's often regarded as the type of thing oldies and cranks are into. in places like india it's a very different deal. i'm not sure what the chinese attitude is.

I'm not talking about jewelry

In India, most of the demand for gold seems to be coming from the jewelry sector, since jewelries made of gold are immensely popular among Indian women without exception. Gold is considered as a status symbol there, and in Indian weddings the gold that the bride wears shows the status and wealth of her family. In short, the more the better...



I refer to physical gold which is used for long-term investment purposes by individuals (not banks or governments)

[Pattberry]

The decision to curb the import of gold by china is simply because Yuan their currency slide to its weakest in eight years .The worlds two largest population are the worlds largest consumers in gold which is china and India and with the recent move by their governments the prices are going down and it is believed that the gold price will come down drastically as the sales are sluggish in India after their government made restrictions in their big note currencies and rumors that the government will be monitoring the amount of gold possessed by each individual in near future

[BellaBitBit]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

How could they restrict purchases of Bitcoin?

[lerredit]

INDIA JUST BANNED GOLD...

Looks like India currently requires Digital Gold for many in order to avoid permanent seizure in the amount of 85% of their assets as "TAX"... Bitcoin demand is going to rocket. Expecting record demand. Killer app activated.

Many analysts predicted such a move would likely occur and thus dampen gold demand in India. However this demand will likely shift to other products like bitcoin.

India is the second most populous country (with over 1.2 billion people), and the most populous democracy in the world.

The country with the highest demand in the world for gold, just outlawed gold. Shit just got real.

"Your gold is safe. 500 grams per married woman will not be seized..."

http://indiatoday.intoday.in/story/gold-jewellery-married-lady-income-tax-raids-demonetisation/1/824321.html

"During search operations, conducted by I-T Department, there would be no seizure of gold jewellery and ornaments to the extent of 500 grams per married women, 250 grams per unmarried women as also 100 grams per male member of the family, it said.

The Bill, which is currently under consideration of the Rajya Sabha, will amend Section 115BBE of the Income Tax Act to provide for a steep 60 per cent tax and a 25 per cent surcharge on it (total 75 per cent) for black money holders.

Another section inserted provides for an additional 10 per cent penalty on being established that the undeclared wealth is unaccounted or black money, taking the total incidence of levies to 85 per cent."

[JariKriting]

because china want not USD in capital devisa
china want econimic confrotation with USA, because donal trump policy want reduce or stop import from china
only economic confrotation China VS USA

[pinkflower]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 

Actually yes. How then would China restrict purchases and access to BTC? They can make it harder for their citizens but the cannot do it totally. The Chinese government would have to shut down the internet to do that.

I find it odd that China is restricting gold. Would that mean that they are desperate and they are trying to prevent a financial crisis from happening? If that were the case then wouldnt it be better for them to buy gold as long as it is all stored inside the country?

[Shiroslullaby]

I don't know if I would call this a "ban" if the average person is allowed to own 500 grams.
At the current price of gold, that is over half a million dollars in gold per person.
This isn't going to effect the average person, only the VERY wealthy.
While some of these very wealthy might buy some amount of Bitcoin, I doubt it would be their first choice for investment.
Probably they will have some offshore accounts, invest in foreign currency and bonds, etc.
Something like this isn't going to create half a billion new Bitcoin users, not even half a million.

[alani123]

Zero Hedge tends to over-sensationalize such news. IMO you should try and factcheck their releases through more prominent news outlets, provided that zerohedge also doesn't do any original reporting other than re-writing news articles.

Here's Reuters covering the issue. What's seems to be happening is that some traders claim China's gold imports are restricted. There are always rumors about China in western media so it's hard to verify this.

[lerredit]

I don't know if I would call this a "ban" if the average person is allowed to own 500 grams.
At the current price of gold, that is over half a million dollars in gold per person.
This isn't going to effect the average person, only the VERY wealthy.
While some of these very wealthy might buy some amount of Bitcoin, I doubt it would be their first choice for investment.
Probably they will have some offshore accounts, invest in foreign currency and bonds, etc.
Something like this isn't going to create half a billion new Bitcoin users, not even half a million.

No, 500 grams is only $20,000

[deisik]

India is the second most populous country (with over 1.2 billion people), and the most populous democracy in the world.

The country with the highest demand in the world for gold, just outlawed gold. Shit just got real.

"Your gold is safe. 500 grams per married woman will not be seized..."

"During search operations, conducted by I-T Department, there would be no seizure of gold jewellery and ornaments to the extent of 500 grams per married women, 250 grams per unmarried women as also 100 grams per male member of the family, it said

That's an interesting development

Since a married woman can hold twice as much gold as an unmarried one, we should expect the amount of weddings to surge soon in India as well as some man turning into women all of a sudden, lol. In fact, I don't see how banning gold could help the Indian government in the long term if their purpose is to support the national currency. People will use something else to store their wealth in, apart from gold (not necessarily Bitcoin). Such actions can only trigger panic and distrust

[iamnotback]

This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump.  

Don't bet on it. First of all, it will boost smuggling and black market activity. Bitcoin is a niche product, only few people are aware of it as an investment alternative. The direct impact of China news on Bitcoin prices is greatly exaggerated.

So I don't expect a rise in BTC price because of it. Even if the scenario you are pointing out becomes reality, restrictions for Bitcoin purchases would not succeed on a large scale, because you can't ban p2p trade.

China doesn't need to import BTC since most of the minted BTC is now mined inside of China. Unless China can track ongoing every BTC mined in China by requiring them to be sold and held on regulated exchanges that never allow users to have access to private keys (which would not be Bitcoin any more), then they have no hope of regulating it.

If China does basterdize BTC that way, then Bitcoin is dead. And we will just move on to another altcoin. In which case the mining farms in China will be useless door stops. Also China would be shooting its own technology sector in the foot. I just don't think China's think tanks are this stupid.

China is powerless to stop crypto-currency.

Besides the capital flight via BTC is so damn small so as to be insignificant. The entire market cap of Bitcoin is only a minuscule $12 billion. The daily volume on Bitcoin is $48 million and RNB forex volume is some $5 trillion annually or $14 billion daily. We need a 10 or 100X higher BTC price before we have to worry about it being significant to China's capital flight volumes.

The correction from $750 due to the fake China scare appears to be a flag pattern. So I am now thinking we may blast right through that cup handle ~$788 and head towards $900.

The (probably complicit) Bitfinex hack and China fake news are probably the Chinaman loading up his wagon with more cheap BTC from shorting. Now time to let it run (up) before the next shorting smash up manipulation.

The strange thing about this is: "restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation" - how come this can be done? Bitcoin addresses don't exist in or outside of China. I do believe that sooner or later the Chinese government will do something about bitcoin - but this ignorance about how bitcoin works shows that this warning is not really from any serious source.

And by they way - please link to those Chinese media reports that you mention - because you care to link to material about their reputation but not really to themselves this is kind of strange.

Here you go in order of the list:

http://www.cankaoxiaoxi.com/finance/20161104/1398956.shtml 中国将限制比特币兑美元 防止资金外流 China gonna limit bitcoin to stop capital outflows
http://news.xinhuanet.com/fortune/2016-11/03/c_129348631.htm 比特币交易变相换汇 风险重重 Bitcoin trading bypass China capital control
http://www.gfic.cn/2016/1103/5890032.shtml 单笔“换掉”500万元，用比特币转移人民币资产 Single trade with bitcoin, 5 millions CNY outflow beyond the borders

They are citing the Bloomberg article as the source. But that article was pulled.

Appears to me that the Chinese are trying to attack the public's confidence in Bitcoin, because they can't stop determined people from using Bitcoin to escape capital controls.

I don't expect any actual crackdown, just this FUD.

Afaics, the only practical technical way this can be accomplished is to ensure that the users never hold the private keys and thus ensuring that the exchanges do not allow any transfers to any Bitcoin address which is not controlled by the exchange (or another compliant exchange). To ensure that no exchange user can reside outside of China and that no such user can withdraw in fiat outside of the Chinese banking system. If they were to allow users to control private keys, then they would have to enforce such tracking on each user which is impractical to enforce.

Thus this proposal means that the Chinese could no longer participate in for example a social network (such as the project I am working on) where the crypto-currency moves from user-to-user regardless of their financial jurisdiction and in which the users control their private keys.

In other words, China would effectively be removing their citizens from the Bitcoin (and crypto-currency) ecosystem.

I don't see any way they can do this and not render China a 2nd class citizen on the future of the Internet economics. They will stunt the development of their own Internet software technology sector.

If China was going to do this, I think they would have done it a long time ago. I would tend to think this is some rumor put out there by those who wanted to make a lot of money shorting. Another sign that the corruption in governance also exists in the government of China's finance bureaucrats (and who would be surprised). Nevertheless before this could actually become a regulation, I think very astute people would have to sign off on it, and I just don't see China shooting themselves in the foot. They are too cunning for that. That Bloomberg has pulled the news off their website is another indication that this was probably malfeasance.

I see this as very likely a buying opportunity and a bear trap due to some errant malfeasance within the Chinese bureaucracy.

And also that the China's oligarchy control over Bitcoin mining and price is growing. If true, this corrupt influence over Bitcoin is what Bitcoin was supposed to eliminate. But the problem is Satoshi's proof-of-work design naturally centralizes due to economies-of-scale. I have a video which explains this in some detail. And also we can see the control over the exchanges by governments is another choke point of control leading to such malfeasdesignance.

We need to do something about this technically. I am working on it. I have a design for unprofitable proof-of-work to address this problem. TPTB_need_war (who some think is me since I am reputed to be AnonyMint) has also done conceptual technical design work on decentralized exchange (and there is some new research on that I haven't yet published). But decentralized exchange probably isn't really the solution because speculators don't want to trade where volume is low and trades aren't instantaneous. Instead the solution is probably about how we onboard millions of users and thus create an ecosystem where fiat is irrelevant for the users, i.e. the crypto-unit becomes the unit-of-account. In that case, the speculators become orthogonal to the users to a great extent (not entirely of course). If China were to wall off their population from this sort of Internet ecosystem, they would I think fall to 2nd class citizens on the Internet. Building their own walled gardens for such would again mean centralized control over private keys, which would mean massive failure due to hackers.

China will lose this gambit (of control over crypto-currency) eventually.

I expected a correction because the price went too high too quickly. Most of the time when we see it spike high like that, it will come back a little.

They will play you as well, because you'll be the one who sells too early when the price rocket goes into a phase transition run to ATHs. They will eventually do that after they done shaking weak hands out. Your stance can be characterized as another form of weak hand because of selling too soon into a bull run.

The first bubble to $1200 in 2013 was the first hump of the typical new technology invesment. The second major hump is the big enchilada and you should never sell except possibly to trade to altcoins to increase your BTC, if you are so inclined and are astute at such speculation.

[deisik]

China is powerless to stop crypto-currency.

Besides the capital flight via BTC is so damn small so as to be insignificant. The entire market cap of Bitcoin is only a minuscule $12 billion. The daily volume on Bitcoin is $48 million and RNB forex volume is some $5 trillion annually or $14 billion daily. We need a 10 or 100X higher BTC price before we have to worry about it being significant to China's capital flight volumes

It is easier to prevent the decease than cure it, isn't it?

Personally, I think that we need an even higher price than 100X of its current value before it becomes significant as the capital flight volume, but that doesn't in the least prevent the Chinese authorities to treat this issue as potentially important or threatening today. What if they know something that we don't? After all, it will still be the same bitcoins, both by nature and volume, right? But fighting with Bitcoin capital outflows might turn out to be utterly ineffective when the price actually got there while a huge pile of very expensive bitcoins would have had already left China by that time. So why not take precautions now?