That’s a question that Westerners have been asking for, oh, several millennia now. Or at least since Marco Polo aimed his ponies down the old Silk Road in 1271.

Now as then, China keeps its own counsel. We know what they want us to know, plus what we can surmise from rumor and reading between the lines. But lately, we’ve been able to add presumption to news and come up with something that looks very significant.

Specifically, there’s been a flood of tantalizing stories out of the East that, taken together, strongly suggest a growing preoccupation with a form of money that was ancient even in Signor Polo’s time. And it ain’t silk. It’s gold.

We already learned, back in April, that China has been salting away bullion for the previous six years, out of sight of international gold watchers. To the tune of 14.6 million ounces. Now the evidence suggests that that

China has once again set the tone for our Monday market forecast.

Roll the videotape:

Chinese traders dumped shares early this morning after a popular magazine rumored that the booming Chinese loan market is cooling off. Caijing magazine guessed that the Chinese loaned about $29 billion in August, a 43% crash from July. While that number isn’t official, traders around the red nation raced for the exits. The Shanghai Composite closed down 6.7%, its worst day in over a year. 16% of the stocks on the Shanghai Composite fell 10%, the daily limit down.

Thus, as we charted above, Chinese stocks are in a textbook bear market. In fact, down 23% since its 2009 peak earlier this month, the Shanghai Composite will be the worst performing major national index in the world for the month of August.

But still up around 50% for the

Chinese stocks plummet, worldly markets follow… what’s behind today’s sell-off… Dan Denning on taking profits in the twilight of the U.S. stock rebound… India reports better-than-expected GDP growth… why our Mumbai partners are still hesitant… Another compelling argument against U.S. banks… Dan Amoss serves the cold, hard data… Plus, signs of the times: American’s vote to throw the bums out while the free market backlash hits Hollywood…

China has once again set the tone for our Monday market forecast. Roll the videotape:

Chinese traders dumped shares early this morning after a popular magazine rumored that the booming Chinese loan market is cooling off. Caijing magazine guessed that the Chinese loaned about $29 billion in August, a 43% crash from July. While that number isn’t official, traders around the red nation raced for the exits. The Shanghai Composite closed down 6.7%, its worst day in

China has stopped stockpiling metals, according to reports in the Chinese media. Will this put the cap on the recent strength in base metals prices? The AFP reports that, “China has been building its inventories of metals, including 235,000 tonnes of copper, over recent months, Caijing magazine reported on its website over the weekend, citing Yu Dongming, an official with the state economic planner.”

“China also bought 590,000 tonnes of aluminium, 159,000 tonnes of zinc, 30 tonnes of indium and 5,000 tonnes of titanium, said Yu, who works in the National Development and Reform Commission’s industry department.” Now that metals prices have rebounded, though, will the stockpiling continue, even at high prices? Or was it a case of bargain shopping at everyday low prices?

There are several components of demand. There’s real economic demand (you need the stuff to make other stuff). There is investment demand (you’re buying it in order to

The base metals were mixed on Monday. Copper held in positive territory during the pre-dawn hours, then tacked on some more gains to mid-morning in New York, before easing through the rest of the day to finish at $2.3086/lb., up 3 2/3 cents from Friday.

Nickel was well up at mid-morning but sold off sharply from there, just pulling up out of the red late to close at $7.1002/lb., up a half-cent. Zinc declined in the pre-dawn hours, rose in early New York trading, but fell off after mid-morning to end at $0.6935/lb., down a penny. Aluminum was modestly lower, dropping less than a half-cent, to $0.7267/lb., while lead eked out a gain of less than a third of a cent, to $0.7697/lb.

Copper was a bit higher as there was little movement in the industrial metals’ prices on Monday, as “the drawdown in stockpiles is one of the fundamentals supporting

Bank of America Corp. (BAC) will likely boost its stake in state-owned banking giant China Construction Bank Corp., paying about 36 cents a share (2.46 yuan), or 1.2 times the Beijing-based lender’s book value, China’s Caijing magazine reported last Friday, citing unidentified sources.

No timetable or total dollar value for the deal was given. The magazine report was picked up by the Reuters wire service, and by other U.S. media outlets, such as Forbes.com.

To smooth the way for the share purchase by Bank of America, Central Huijin Investment Co. Ltd. - the investment arm of the People’s Bank of China that’s run by the Ministry of Finance - has asked China Construction Bank to audit its third quarter results using international accounting standards.

Caijing, an influential Chinese-language business-news publication, said it did not know how many shares that Bank of America intended to buy.