October 29, 2012,
En route to Los Angeles.
Greetings from Hong Kong International Airport; just a quick note today as I’m just about to hop a plane bound for California.
Before I head out, I wanted to tell you about an interesting trend
we’ve been seeing and hearing about from our business colleagues in
Asia.
Yesterday we briefly discussed how demand for physical gold in Hong
Kong is surging right now; this is in no small part due to the droves of
mainland Chinese coming across the border.
Many of them head to Shenzhen and walk over into Hong Kong. They
often use older people as ‘gold mules’ to smuggle in their precious
metals. The elderly typically receive great deference in China, so they
aren’t screened as vigorously at land border checkpoints. It makes it
easier to carry in 50-100 ounces.
When mainlanders arrive, they store their gold in a safety deposit
box at one of Hong Kong’s many banks, and typically try to buy even
more.
This is one of the chief reasons why there’s a dearth of inventory in
Hong Kong right now, particularly for the Chinese panda coin that
they’re so familiar with.
Hong Kong also seems to be a popular place for Chinese bureaucrats to
store their ill-gotten wealth. In fact, one of the new trends we’ve
seen and heard about from business colleagues in Asia is how mainland
officials are now receiving bribes in the form of solid gold business
cards.
Imagine you’re a businessman in Xian who needs some silly permit, and
you have to grease a local bureaucrat. It would be untoward to deliver a
suitcase full of cash… especially these days with all the internal
scrutiny from the Bo Xilai incident.
So now what business people seem to be doing is minting solid gold
business cards. When they want to bribe an official, they schedule a
meeting, and hand them a business card or six. It’s so innocuous, nobody
really notices.
For the bureaucrat, it’s much simpler to travel with a few ‘gold
cards’ than cash. And Hong Kong is an easy place to store a collection
of such cards… or even melt them down into other forms.
I have to run, they’re about to close the aircraft door! Talk to you
on the other side… and best of luck if you’re without power at the
moment.
Original Source
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