Chinese govt advise gold buying - why? What is their plan?

[Aengrod]

[youtube]http://www.youtube.com/watch?v=YPXncTuwFIE[/youtube]

 

[willrocks]

Probably as a way to accumulate more gold in china. And if/when there's some type of gold-backed currency they'll confiscate it, or offer some FIAT for people to turn it in.

 

[revlisify]

... No effect on inflation......The gold is worth 8000 yuan..........putting 16000 yuan in circulation........ yet no one has lost out

This theory is misleading.

There will be huge inflation when the holders of the 8000 yuan AND 1oz gold (revaluated to 8000 yuan legal tender) start spending, putting 16000 yuan in circulation overnight. This is in contrast to the original 8000 yuan, which needs to be converted (to/fro fiat or metal) to spend.

Revlisify

 

[Aengrod]

... No effect on inflation......The gold is worth 8000 yuan..........putting 16000 yuan in circulation........ yet no one has lost out

This theory is misleading.

There will be huge inflation when the holders of the 8000 yuan AND 1oz gold (revaluated to 8000 yuan legal tender) start spending, putting 16000 yuan in circulation overnight. This is in contrast to the original 8000 yuan, which needs to be converted (to/fro fiat or metal) to spend.

Revlisify

No. Gold never causes inflation. Rise in "Price" is merely a barometer of inflation.