Quote"China is out to have more gold than America, and Russia is aspiring to the same," McEwen said yesterday in an interview at a Bloomberg Link conference in New York. "When you have debt, you don't have a lot of flexibility. China wants to show its currency has more backing than the U.S." In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in official-sector purchases by countries including Bolivia, Sri Lanka and Mauritius, according to World Gold Council data. China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals, Century Weekly reported this week. Russia purchased 8 tons of gold in the first quarter. China's Gold Reserves China, which has just 1.6 percent of its reserves in gold, may invest more than $1 trillion in bullion, Pento said. "China wants to be an international player, and they need to own more gold than they currently have." " http://www.bloomberg.com/news/2011-...nal-bullion-extending-record-price-rally.html
But the bigger Question is WHY?? The second biggest question is HOW is China accumulating gold?? So how do you invest large sums of money building up your gold reserves and not drive up the price? What strategy would you use? REDBACK
Well they own a large amount of gold mines that are government owned and run, i would think it could be done quite covertly. I think the answer to this is the Chinese are very grandiose, they will want to show the world economies in the future that the Yuan can be used as the next reserve currency. Right now it seems hard to believe but i believe that's the strategy.
The future looks good for Gold with China wanting to increase it's reserves, maybe we are finally going to see some real upward movement in the price of Gold as it has been tracking sideways for the last 2 years in AUD terms. I think I will have to buy up some more Physical.
Nukz,covertly yes but their total domestic output still leaves them short considerably. Your assumption about the Yuan is also held by a lot of people including my self. The most logical strategic move considering the Chinese hold one of the largest reserve's of US currency is to covertly convert this currency into gold. But how do you do that without quickly inflating the price of gold and hobbling your own purchases at a reasonable price? Allow your citizens to own and buy gold. Encourage your citizens to receive partial payment of wages in gold. Prehaps when the USD is at a hopeless level,decouple the Yuan from the US dollar,then recall all private gold holdings to be made into a fractional gold based currency which acts as a backing to the Yuan and hand it back to the people. Effectively doubling,tripling quaddroupling the cash supply of the Yuan without having an inflationary effect because no new paper money has come into circulation. I agree with this current strategic model proposed by better minds than myself. REDBACK
At current prices. Another argument for why prices have to move higher. The market could not absorb 20,000 tonne of demand in a short time frame. thats over 8 times the worlds supply.
The Europeans still have lots of gold. Maybe the Chinese use their gold as collateral when buying their useless bonds, and they know they will default on the end anyway.:lol:
thats one good reason for gold to recalibrate its dollar price! i see a massive upswing in the gold and silver price coming during the next 5 years
Britain was the biggest Naco state in history during the 1800, pretty despicable behaviour towards the chinese and I am sure they haven't forgotten this. http://en.wikipedia.org/wiki/Opium_Wars
The answer to the first question is: The other countries realize that the Dollar is going to go to zero. (2006 BIS states that the Dollar will go to Zero) The answer to two is: They are using their big wadges of U.S. Dollars to buy something of value....Gold and Silver. http://www.bestmetalresearch.com/wordpress/wp-admin/post.php?post=1103&action=edit
IMHO China is making new world currency , but RMB to be accepted like world currency must be rapidly different from USD , so it will be backed by gold or mix with other PM, so after that i expect no fiat money, in meantime they must accumulate enough PM , and this cant be easy bcoz this kind of move will make PM price highrocket. They also r encouraging people to invest in PM like saving, at the end most PM will be in China. i dont expect they buy directly gold for all money, they will be buying other PM, bonds, commodities... and then swap it for gold, maybe silver can be Trojan horse with GSR 16. And yes about founding HSBC : After the British established Hong Kong as a colony in the aftermath of the Opium Wars, local merchants felt the need for a bank to finance the growing trade between China and Europe (with traded products including OPIUM).[2][3] They established the Hongkong and Shanghai Banking Corporation (traditional Chinese: ) in Hong Kong (March 1865) and Shanghai (one month later).- source wikipedia So Chinese will be happy if HSBC fall in there hands.
