China to me is playing a very bad hand very well...for the time being. But in the end, if she uses her Trillions in reserve to buy gold she is going down. Her peasants can't eat gold. And once the Europeans start selling the price has to tank IMO.
Best I can tell is China is accumulating gold and silver two different ways but it is not in the trillions. With internal bank and loan problems who says their central bank has all that much cash to spend?
- China is making is easier for its citizens to buy gold and silver and encouraging them to do so...smart move
- Its central bank is buying PMs only or mostly gold......shedding US Dollars to do so.....smart move
- its sovereign wealth funds are buying gold and silver but are more importantly trying to scoop up Western enterprises on the cheap, at bargain sale prices
posted on 12/20/2011 9:47:39 AM PST
(A nation of sheep breeds a government of Democrat wolves!)
I'm no expert. But in just the last few weeks the $ has risen against the Euro over 10% and Gold has dropped from near 1900 to under 1600. Staying in dollars would have been the best play for China. Commodities all over the spectrum seem to be dropping as world wide deflation kicks in...which has made the fiat dollar stronger compared with all the other fiat money...I guess in the land of the blind the one eyed man is king.
Like I said above...what are the Chinese peasants going to do with gold?? They have currency restrictions in place so they can't send money out of the country and they can't eat it. Maybe the ChiComs just want to keep the prices up with their own internal demand. No commie country ever does anything for the good of the individual.
posted on 12/20/2011 12:30:14 PM PST
(Central Banker Capitalism is NOT Free Enterprise)
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