China's FX Research Center: Gold Is The Strategy
First of all I would like to thank all my translators, my sources in Asia, my commenters and readers. It's amazing what this blog, through the efforts by all of you, has accomplished: worldwide attention and an important addition to the gold community. Thanks you all very much!
The next translation I present is from a speech by Tan Ya Ling, President of the China Foreign Exchange Investment Research Institute, given on a gold conference May 7, 2013 Beijing. Probably it's not the whole speech as the title of the original article mentions oil, but the article itself doesn't.
When I googled Tan Ya Ling I found a site that sells a video box (2013) from Tan Ya Ling called Currency Wars. A concept the Chinese have been familiar with for many years. In 2007 a book, that oddly hasn't been translated in English, came out with the same title, written by Song Hongbing. A quote about this book from Wikipedia (please click and read):
Currency Wars by Song Hongbing, is a bestseller in China, reportedly selling over 200,000 copies in addition to an estimated 400,000 pirated copies in circulation and is reportedly being read by many senior level government and business leaders in China. Originally published in 2007 the book gained a resurgence in 2009 and is seen as a prominent exponent of a recently emerged genre labeled "economic nationalist" literature.
The book looks back at history and argues that fiatcurrency itself is a conspiracy; it sees in the abolition of representative currency and the installment of fiat currency a struggle between the "banking clique" and the governments of the western nations, ending in the victory of the former. It advises the Chinese government to keep a vigilant eye on China's currency and instate a representative currency. The book, published in 2007, also correctly described and warned of the various forms of derivative speculation used by WallStreet which eventually became the causes of massive margin call sell offs and the stock market crash in late 2008.
Tan Ya Ling: Gold Is The Strategy, Crude Oil Is The Tool
May 7, 2013, BeijingHosted by the Capital University of Economics and Business, the Gold Market Research Center, Jingyi Gold Co. and CPM Group, is the first gold market discussion and development trend research: The World Gold Market Investment Report. The press conference was held on the 7th of May in Beijing. Hexun.com reports exclusive on this conference. Tan Ya Ling, President of the China Foreign Exchange Investment Research Institute states that the gold price will definitely rise:
"The [price] movement has created a unique phenomenon, that is, gold has gone through three waves. The First wave was mainly need based, the second wave was mainly investment based, and now we have entered the third wave, which is mainly venture based.
From another angle, the risk of the collapse of the Euro and the gold price. I state that I believe in the eventual collapse of the Euro. How do we look at the gold price in light of that event? The gold price right now has a connection to Europe. Europe lacks money, Europe has gold. All the European Countries hold significant high gold reserves relative to total reserves, the lowest is 40%, the highest is 70%, with Portuguese as high as 90%. They have accumulated this much gold, but having difficulty funding their budget, so what are the controller's tricks into selling their gold? It will certainly strengthen the number one position of the US.
Further, is there a risk of losing control of the dollar and the gold price? Can the US continue to be this strong over longer periods of time? There is a risk here, these things trend in cycles. It's worth to note the dollar's potential risk, and such risk might be exposed and may even explode. There might be a possibility of a reshuffling of the international monetary system. Gold right now is priced in dollars, but more importantly is what the price of gold will do to the meaning of the dollar.
The focus of the discussion indicated that the prejudice of the supremacy of the dollar, and the strength and weakness of the dollar, are different from the policy of the dollar and the policy of the US. This distinction needs to be clarified. Facing the global monetary system, the US dollar cannot be replaced in the short term, it is hard to be replaced in the midterm, but in the long term it prepares to replace itself. It thinks far in the future, it thinks very deeply, very thoroughly. The key is whether we have thought about this, whether we have thought clearly about it, whether we have thought it through. The gold market has different facets like the physical gold market, paper contracts, RMB denominated and dollar denominated products. Why do we only store the physical gold? If we over store our physical gold, others will come prepared for it specifically. Our physical gold has been overly developed. Even if the gold price is really good, and the gold has more growing trends, it still needs to have a good proportion, it cannot cross the line. This is our nucleus of warning signs for risk and of assets allocation. We cannot deploy assets by following the price; we have to deploy assets by our own ability, following the change of the market.
Therefore the topic of gold is not that simple. Gold is closely related to the whole financial market and the macro economy. Therefore I especially agree with what Zhang Bing Nan said this morning. He stressed the word "theory". We need to find our own theory; yet we are in a time that lacks theory. China did not rely on numbers, but on concepts to catch the world's attention. Chinese economic development and the gold market's development have to follow China's own theory. This is the most basic reason for us to dominate the market, to take root in the market."
