In today’s Daily Telegraph, (h/t danwei), Ambrose Evans-Pritchard notes that China’s State Reserve Board has been importing large volumes of copper “beyond the usual rebuilding of stock for commercial purposes” and speculates – without resorting to a single Chinese source – that China must be replacing its dollar reserves with metals (possibly with the long-term goal of creating a ‘copper standard’  to replace the dollar as a global currency). Evans-Pritchard doesn’t cite a Chinese copper trader to support this hypothesis; nor does he cite a member of the State Reserve Board. Instead, he cites foreigners who know little more than he does:

While it makes sense for China to take advantage of last year’s commodity crash to restock cheaply, there is clearly more behind the move. “They are definitely buying metals to diversify out of US Treasuries and dollar holdings,” said Jim Lennon, head of commodities at Macquarie Bank.

Except that they’re not. Continue reading →