Posted on 11/01/2009 3:42:02 PM PST by blam
How And Why China Will Flood The Gold Market
Commodities / Gold & Silver 2009
Oct 31, 2009 - 09:07 AM
By: DailyWealth
Jeff Clark of Casey Research writes: As you read this, the Chinese government is doing an extraordinary thing... something nearly unheard of in the modern world.
It is encouraging citizens to put at least 5% of their savings into precious metals.
The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year's meltdown in the stock market, people believe it. After all, Chinese citizens don't receive government retirement money... and they don't have company pension plans like people in many other countries do.
This is why folks in China are lining up outside of banks, post offices, and the new official mint stores to buy gold and silver (they especially like silver because it's cheaper per ounce).
The Chinese attitude toward gold and silver is a striking contrast to the American attitude right now. I don't recall a TV or radio ad from my congressman or President Obama encouraging me to buy gold or silver. Does your bank sell silver bars? Are gold mints popping up in your neighborhood? Are any of your friends, family, or coworkers scrambling to buy precious metals?
In spite of a few ads on television and satellite radio, buying gold and silver in the U.S. is still largely seen as a fringe-group activity. That's not the case in China. And in the big picture, there are three distinct trends occurring in China today that many in the Occidental world are not paying attention to.
First, look where China stands as a gold-producing nation.
[snip]
Interesting development.
China doesn’t print the dollars —the USA does. When people opt for gold instead of dollars, it is a vote against confidence in the US regime. Over the long term, this is not an attitude that the current Beijin regime finds unattractive.
But is is amazing and instructive that we have come to the point where the US government defends the futures of its subjects less aptly than a mafia that has seen fit to drive over its college kids WITH TANKS.
Which KINDA makes you wonder where we might be going, ya know...?
“Jeff Clark of Casey Research writes: As you read this, the Chinese government is doing an extraordinary thing... something nearly unheard of in the modern world.
It is encouraging citizens to put at least 5% of their savings into precious metals.”
Chinese putting savings into gold? Seriously? Next thing you known, they’re going to start drinking tea and eating their food with chop sticks.
The title is somewhat misleading in that it suggest gold will be flooding tha markets and dropping the price.
If the Chinese leadership, that has, like it or not, lead them from Mao/Revolutionary Guard disaster, to their rising economic superpower status, gets its citizens ready, each with a little gold, and then declares their currency gold backed at some level, ....that’s it. They won. Big Time.
Soros’s old partner, Jim Rodgers has moved to Shanghai. Why? Because we, the US, are at the BEGINNING of the end of 100 years of Federal Reserve paper money.
It’s going to get worse. Maybe, way worse.
“I don’t recall a TV or radio ad from my congressman or President Obama encouraging me to buy gold or silver. Does your bank sell silver bars?”
This summer, Harrods started selling gold bullion directly to the public.
Poor headline. Author was probably edited. Rather than flooding the world with gold, the Chinese are sopping it up like a sponge. Be interesting to see who buys the IMF upcoming gold sales.
bttt
Meanwhile, interested investors in the “free” USA fear that their government will seize any gold investments they might make.
Never wait for the US government and Wall Street/bankstas to sell gold and silver to public. That is probably too late and a stampede is underway and you will end up paying top prices. Do it now before Joe public gets involve and creates panic buying/prices which Wall Street/bankstas will profit. Recommend using www.bulliondirect.com or www.apmex.com to buy gold and silver bullion bars and coins. If you need to sell gold jewelry (10K to 24K) recommend www.usgoldbuyers.com. They post their daily scrap rates. They give one of the highest prices compare to other goldbuyers. Used all three websites, and I am satisfied with them. NOTE: When purchasing gold and silver, you must make a reasonable purchase amount to overcome the insured shipping costs. Had some freepers complain that they brought one coin and was surprised by the total cost when the minimum insured shipping and handling is added to purchase price. Use common sense when buying precious metals.
Why would China flood the market after encouraging its citizens to buy precious metals???? They wouldn’t.
What they will flood the market with are U.S. Securities, which is why they are buying gold. When people start fleeing U.S. Securities, gold will go stratospheric.
Ping!
Great idea, have some Au I am willing to sell them.
Gold is just a metal. Metals are a very controlled market, and have been since the days of mercantilism. That was back when whoever had the most specie, gold and silver, could afford the biggest military, and thus could dominate other nations.
While the theory is that mercantilism died out, the truth is that mercantilism expanded beyond specie. Not just other metals like copper, aluminum and steel, and non-metals like diamonds, but even commodities like wheat and corn, paper, commercial products, etc., etc. Even less tangible things like services entered the realm of mercantilism.
So where does that leave specie? Pretty much with those who still think it is special, for some reason. Maybe a touch of modern day gold fever, who knows?
But for most of us, it will never be an issue, and we are under no obligation to honor or oblige those that have it.
Well, gold ownership was only recently made legal in that country, the last few years, fwiw.
Recommend buying silver locally, to avoid shipping costs. $1000.00 in silver coinage weighs 57 pounds.
True enough, but nobody ever had to pass laws forcing people to take gold coinage, unlike paper currency. I like cash, I really do, but I’m not under any obligation to honor it, either.
It Is Japan We Should Be Worrying About, Not America
"Markets are worried that Japan is going to hit a brick wall: the sums are gargantuan," said Albert Edwards, a Japan-veteran at Société Générale."
"Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised "a real risk that Japan could end up in a major default".
“...the US government defends the futures of its subjects less aptly than a mafia that has seen fit to drive over its college kids WITH TANKS.”
You are too kind. They have starved millions of their own.
Yes, you are right.
They can’t seize it if they can’t find it.
Actually, for debts, you are. Unique to paper money is the legal tender law. It doesn’t apply to any electronic money, check or specie. And it cannot be used to force a debt. But once a monetary debt exists, it cannot be turned down as payment.
Says so right on the front of every bill. And they mean it. It is the law.
You should buy silver bullion coins and bars that are internationally renowned just in case you have to leave the US. Engelhard, Johnson and Matthey, Heraeus, the US silver Eagle coin, Canadian silver Maple coins and Mexican Onza or Libertads are my name brands for 100 ozt (troy ounce)sizes or smaller (fractions of an ozt to 10 ozt). If you can get them locally the better. Junk silver is OK but if the US government had not collapsed, can one melt silver US half dollars, quarters and dimes into silver while in the US???? If you leave the country you can sell it to a foreign refiner for local currency.
It is encouraging citizens to put at least 5% of their savings into precious metals... they especially like silver because it's cheaper per ounce).Thanks Clintonfatigued.
I think that is in error. At around $15 an ounce you get closer to 57 ounces not pounds for $1000.
Dominoes. Before Japan defaults, it will start dumping its US Securities.
If I had to leave the country, I sure wouldn’t want silver. Way too bulky and heavy. Makes good ballast though.
$1000.00 in face value U.S. coinage weighs about 57 pounds, roughly the size of a bowling ball.
$1,000 in silver coins means this:
American coins, issued 1964 or before, dimes, quarters, half dollars, full silver dollar coins.
90% silver
Face value $1,000
Silver content of American coins is .72 Troy ounces per dollar.
So $1,000 face value of junk silver contains about 720 Troy ounces of silver, which at current spot is...
$11,797.20
But we’re not talking about debts. I was just pointing out I’m not obligated to take funny money anymore than you are gold or silver. The seller gets to set the terms, not the buyer. Cash is usually, but not always, best. Till it isn’t.
To be even more exact, silver dollars contain .77ozt, the dimes and quarters and halves don’t add up to the same though, there’s a little seignorage here - .72ozt of an ounce. This odd amount of silver per coin was all based upon silver being around $1.20 an ounce for a long time.
Further since most “junk” coins are fairly well worn the actual accepted figure is .715, or net 715 ounces of pure silver per thousand dollars face value.
Actually, I’ve been short silver for about a week. Thursday was pretty tense; but overall, a good week.
What about during a crisis bank holiday ?
This is why is it a good idea to have cash at home. During the Great Depression, some bank holidays lasted between 3-300 days. There was a tremendous physical cash shortage that caused widespread deflation.
Today, only 5% of daily US retail is backed by physical cash. All the rest is backed by electronic cash, which has no value as legal tender. If and when there is a bank holiday, the banks that are open will be stripped of cash in an hour.
The US Bureau of Printing and Engraving has only two high security printing offices in the US, in Fort Worth and Washington, D.C. They typically operate at 100% capacity, just to maintain this 5%, and the vast majority of bills they print are $1 bills.
This means that not only *can’t* the government print more paper money than it does, but there are relatively such a tiny number of high denomination bills in circulation, that the government cannot print significantly higher denominations. Nobody could make change for them. There are just not enough $100, $50 or $20 bills to make change even for a $500 bill.
So, in the event of a bank holiday, when electronic funds are not available, cash money will instantly be effectively deflated by 95%. That is, worth 95% more than its face value. Retailers can and will refuse electronic payment that they cannot “cash”.
As it was said during the Great Depression, “You could buy a pound of hamburger for a nickel. But nobody had any nickels.”
Jim Rogers moved his family to Singapore, as he sees no way the US can avoid an economic collapse and serious breakdown in social order.
Two generations of government school-trained sociopaths will start taking what they need from each other at gunpoint, while the elites hide in their gated communities under para-military guard and live better than ever. Much like Brazil.
It’s already happened/happening in the US.
Just saw a foreign guy on CNBC say he wouldn’t be surprised if silver breaks $20 over the next week or two. Here’s hoping! ;)
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