Will China be forced to dump gold onto the global market?

SpacePete

SpacePete

Well-Known Member
Silver Stacker
Could China try to fund stock market emergency measures with its gold reserves? If they dump gold onto the global market then that will not be good news for gold. :(
 
Don't know.

Now that their stock market has crashed I would have thought that many of those Chinese investors who pulled their money out would be looking to invest in Gold and Silver as a safe haven. If that happens and China is going to dump it's Gold it could dump it on it's own market/people. Who knows, wait and see.
 
Skyrocket said:
Don't know.

Now that their stock market has crashed I would have thought that many of those Chinese investors who pulled their money out would be looking to invest in Gold and Silver as a safe haven. If that happens and China is going to dump it's Gold it could dump it on it's own market/people. Who knows, wait and see.
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Market investment has been funded through borrowing in many cases. That's a major part of the problem. There's nothing there but huge debts that will have to be repaid.
 
Then that is bad news/times for them, and it shows how little I know about these things. I'm still learning. :/
 
China will probably dump its trillions of foreign reserve before dumping its gold, foreign reserves are probably more liquid and easier to sell too
 
A central bank doesn't need to sell anything to raise money - they just lend it into existence
 
trew said:
A central bank doesn't need to sell anything to raise money - they just lend it into existence
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Ahhhh, the power of non-existent, invisible money! :lol:
And the USD is soooooooooo stronggggg..... lololol
 
Bullion Baron said:
They've got over a trillion $ in US Treasuries (that they could sell), various other assets and currencies; all indications from official sources over the last few years suggest they are still trying to build up their Gold reserves...
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Agreed. China isn't selling their gold.....especially at these price levels.
Also, they mine & produce their own PM's & haven't reported gold holdings in a long time.

I expect them to be holding a serious, very serious, amount of Gold.
If they wanted to wage war - all it would take is backing the yuan with gold.
An absurd gold holding & backing the yuan with it...could and would cripple the USD.
 
Skyrocket said:
Don't know.

Now that their stock market has crashed I would have thought that many of those Chinese investors who pulled their money out would be looking to invest in Gold and Silver as a safe haven. If that happens and China is going to dump it's Gold it could dump it on it's own market/people. Who knows, wait and see.
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From what I've read, a lot of the Chinese investors have been taking out margin loans. With trading in nearly half the stocks on the Chinese markets being suspended, I'm wondering if many of those investors might be needing to sell any gold or silver that they currently own in order to help meet any margin calls they might be facing rather than moving their money into gold and silver.
 
billybob888 said:
The question should be:

"Will GREECE be forced to dump gold onto the global market?"
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Nah. They are smarter than that. It would be a short lived glorious moment for them.
UNTIL THEY REALIZE WHAT THEY JUST DID. lol
 
Casey Report:


The world's biggest gold buyers are suffering a major liquidity crunch. Many won't have the cash to buy anything, not even gold. Worse, hundreds of Chinese stocks are halted and huge numbers of investors are facing margin calls. That means that many who own gold will be selling because it's the one thing they can get a bid on.

When a large number of buyers are forced to become sellers well, counterintuitive days like today can make sense.

If I'm right about this, precious metals will slide until the liquidity crunch in China passes. We saw the same thing in 2008. But when this reversal happens, the rebound should be even sharper. Unlike most Americans or Europeans, Chinese people do see gold as an important form of wealth protection.
 
JulieW said:
Casey Report:


The world's biggest gold buyers are suffering a major liquidity crunch. Many won't have the cash to buy anything, not even gold. Worse, hundreds of Chinese stocks are halted and huge numbers of investors are facing margin calls. That means that many who own gold will be selling because it's the one thing they can get a bid on.

When a large number of buyers are forced to become sellers well, counterintuitive days like today can make sense.

If I'm right about this, precious metals will slide until the liquidity crunch in China passes. We saw the same thing in 2008. But when this reversal happens, the rebound should be even sharper. Unlike most Americans or Europeans, Chinese people do see gold as an important form of wealth protection.
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Will be good to keep an eye on. I wouldn't mind some cheap gold, but I just hope I don't wait too long and get caught by the reversal. :)
 
Back up the truck time?
article-0-18A83E6300000578-396_964x468.jpg
 
^^^
That's what we'll need to take the days wages home, where the Ozzie dollar is headed
 
The Crow said:
^^^
That's what we'll need to take the days wages home, where the Ozzie dollar is headed
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That's only for the remaining locals who still have jobs.
 
and Daily Reckoning today quoting 'The Economist'.

'Lost in all the drama about the stockmarket is that it still plays a surprisingly small role in China. The free-float value of Chinese marketsthe amount available for tradingis just about a third of GDP, compared with more than 100% in developed economies. Less than 15% of household financial assets are invested in the stockmarket: which is why soaring shares did little to boost consumption and crashing prices will do little to hurt it. Many stocks were bought on debt, and the unwinding of these loans helps explain why the government has been unable to stop the rout. But this financing is not a systemic risk; it is just about 1.5% of total assets in the banking system.'
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--In a country as large as China, with disparate incomes and social classes, statistics like this can be misleading. But the point is, a stock market crash shouldn't be the end of the world for China. Systemic financial crises happen when banks get involved en masse and asset values fall below debt levels, impairing their ability to create credit and restart economic growth. It's something that Phil Anderson at Cycles, Trends and Forecasts writes about often.

--And anyway, the booming stock market didn't have much of an effect on the economy on the way up, so why should it do damage on the way down?
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JulieW said:
and Daily Reckoning today quoting 'The Economist'.

'Lost in all the drama about the stockmarket is that it still plays a surprisingly small role in China. The free-float value of Chinese marketsthe amount available for tradingis just about a third of GDP, compared with more than 100% in developed economies. Less than 15% of household financial assets are invested in the stockmarket: which is why soaring shares did little to boost consumption and crashing prices will do little to hurt it. Many stocks were bought on debt, and the unwinding of these loans helps explain why the government has been unable to stop the rout. But this financing is not a systemic risk; it is just about 1.5% of total assets in the banking system.'
Click to expand...

--In a country as large as China, with disparate incomes and social classes, statistics like this can be misleading. But the point is, a stock market crash shouldn't be the end of the world for China. Systemic financial crises happen when banks get involved en masse and asset values fall below debt levels, impairing their ability to create credit and restart economic growth. It's something that Phil Anderson at Cycles, Trends and Forecasts writes about often.

--And anyway, the booming stock market didn't have much of an effect on the economy on the way up, so why should it do damage on the way down?
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Impacts can be asymmetric, especially in a panic for the door.
 
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