This is a wonderful collision of major themes on this blog, namely:
1. Gold is not a "safe" investment or necessarily negatively correlated to recessions, currency weakness, etc.
2. China has little to no control over its internal credit procedures, which are largely politically directed, thus resulting in one of the biggest economic bubbles in history.
And so now we "discover" that an amount equal to the GDP of Iceland (15 Billion dollars or so) is the result of falsified transactions...and with "owners" of gold having to deal with multiple collateral claims in various jurisidctions, it again begs the question of "what do you, precisely, own when you have claims on precious metals in storage somewhere".
And what do the correspoding banks in China "own" when they list these loans as assets?