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Re: China:- Gold no GOOD !
Let us look at this from the point of view of an administration that sees the long term advantage of a slow move towards a slightly more liberal national economy. They can see how their own citizens might be attracted to take up holdings of Gold in the same way that, for example, India's citizens do. In which case, they need to do nothing, (an attractive attribute to a difficult problem). They can see that their citizens have been saving well, but that a large proportion of those savings have ended up in US Treasuries. What better idea than to do nothing while watching their citizens placing their savings into Gold at not cost to the administration? -
Re: China:- Gold no GOOD !
The one thing that keeps me warm at night is the thought that 1.3 billion people in China & 1 billion in India decied it time to buy an oz of Gold!
MikeComment
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Re: China:- Gold no GOOD !
Really?Originally posted by Mega View Post
This keeps me awake at night:
1. Somewhere between 55% and 75% of the 1 billion in India Belong to the "Backward Classes," and are wholly without assets.
http://en.wikipedia.org/wiki/Caste_system_in_India
2. Somewhere between 99% and 100% of the Mainland Chinese population is wholly subject to the whims of the government, which may deem it unlawful (or tax it so heavily that it is unreasonable) to buy goods from foreigners. In the past six months they have changed rules regarding foreign ownership of state assets; there is no reason to think they are going to open their vast consumer base (with its per capita GDP of US$6500).
You can count all the people you want that are living on a dollar a day. No real market can compete with a hundred million Americans with $50,000 credit lines.
That said, it seems there's a coordinated move against gold via Central Banks, which may provide a buying opportunity.
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Re: China:- Gold no GOOD !
China has been growing its gold reserves, this is beyond doubt, they just crossed the 1000 tons mark. Why should they change policy now? Do you really trust them to put their mouth where their money is?
Perhaps they do not want the USD bubble to deflate too fast and gold price to get out of control before they are done with it.
With $ 2 Trillion reserves, two thirds in dollars, I would say they have a vested interest in supporting the USD against any competitive currency.Comment
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Re: China:- Gold no GOOD !
At this point, I see it the same.Originally posted by bpr View PostThat said, it seems there's a coordinated move against gold via Central Banks, which may provide a buying opportunity.Comment
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Re: China:- Gold no GOOD !
Popular myths of our time:- China no longer "loves" gold;
- China is going to nuke the US Dollar by selling Treasury bills and bonds;
- Saudi Arabia is going to stop exploring for oil;
- The US government has a believable plan to deal with the fiscal deficit;
- BP is a criminal enterprise and knows absolutely nothing about how to drill oil wells;
- The world is facing a looming energy shortage;
- The Euro is finished;
- The Yen is finished;
- The Dollar is finished;
- California real estate is cheap;
- Australia has a housing shortage;
- House prices in Vancouver, Canada are not in a bubble;
- Stocks are cheap;
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Re: China:- Gold no GOOD !
thought provoking quotes from the article:Originally posted by Mega View Post
So why change?While gold bars provided a buffer against inflation, there were other assets that offered similar protection, the regulator said.
Laughable.It also said limited supplies of gold -- annual global production stands at 2,400 tonnes -- meant large purchases by China could drive up prices of gold jewellery and other products, hurting domestic consumers.
Whole article makes me think they're talking their book and are just trying to work the price down to make a big buy.Comment
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Re: China:- Gold no GOOD !
Sorry could not resist:Originally posted by GRG55 View Post
GRG55 is a fool!
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Re: China:- Gold no GOOD !
I agree. This reminds me of the Chinese announcement re: Yuan valuation a week before the recent G20 summit. Sometimes a message has other intended consequences. This gold annoucement could also be viewed as China reassuring the US in a backhanded kind of way.
Although Sun Tzu spoke of military warfare, many of his thoughts can be applied to other conflicts - like currency wars.
I get suspicious when China seeks to alleviate concerns about their currency peg and US treasuries holdings.
Here's a relevant quote:
Peace proposals unaccompanied by a sworn treaty indicate a plot.
- Sun TzuComment
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Re: China:- Gold no GOOD !
Amen!Comment
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Re: China:- Gold no GOOD !
The US is a democracy.
Republicans are for small government.
Democrats are pro worker.
Bernanke can fix it.
Greenspan is secretly channeling Ayn Rand.
Sapiens is not watching from somewhere.
The oligarchy is on the same page.
America is dead.Comment
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Re: China:- Gold no GOOD !
Loss of appetite ?
Monday, June 28, 2010
China to purchase gold concentrates from Coeur d'Alene Mines
We are now used to China sourcing huge volumes of metals from external sources to drive its industrial machine forwards, but the latest announcement from Coeur d'Alene Mines (ASX: CXC) on its deal to have its gold concentrates purchased and processed by China's largest gold producer suggests that precious metals are on China's vast shopping list too.
China is already the world's largest gold miner, and many analysts now assume - following the country's announcement last year that it had been building up its gold reserves for six years unknown to the West - that it is still expanding its gold holdings in a way that does not necessarily show the gold going into official reserves. And now it appears to be looking elsewhere to purchase supplies of the yellow metal without overtly impacting the market.
What is significant, perhaps, is that this suggests that China's commitment to gold is both ongoing - and likely to increase. The country, through its financial institutions and state television advertising, has been persuading its ever growing middle classes to purchase gold (and silver) as a good investment. There seems little doubt that the state is doing the same thing itself as a means of diversifying its huge reserves.
Coming back to the Coeur deal, gold concentrates produced at Kensington will be processed by China's largest gold producer China National Gold through an agreement that is the first of its kind between a state-owned corporation of the People's Republic of China and a U.S. precious metals mine.........China Gold will be paying upfront, which means that in terms of timing, Coeur will get paid seven days after shipping vs. the typical two-three months that most concentrate producers must wait, while the metal is being processed at the smelter/refinery.
This is obviously a very attractive deal for Coeur, speeding up its cashflow, although it covers a relatively small amount of gold for the Chinese - but the very fact that this has been put into place suggests that other similar deals are likely to be negotiated with other new producers going forwards. It also means that China's appetite for gold just cannot be satisfied by its still growing domestic gold mine output - as we noted above already the world's largest.
If indeed it is China's plan to increase its gold holdings, but while maintaining an orderly market in the yellow metal, it is a smart move. The main reason, almost certainly, that China did not buy the IMF gold on offer - or even a large hunk of it - would be that to do so would have sent a very overt signal to the market and that the gold price would have skyrocketed as a result. Such a movement in the price might have been seen on global markets as a vote of no confidence in the dollar - and with China's huge dollar-related foreign exchange holdings this would not suit its long term economic policy either.
To buy newly-mined gold production at source is thus a clever ploy. It is not interfering with the gold market directly by being seen to buy, but picking up gold which is actually never reaching the market. It can then move the gold into some interim holding capacity which does not have it showing up in its official reserves until, and unless, it wishes to make this statement to the markets. The fact that, as a result, less gold is actually reaching the market has a substantially smaller impact on it than the overt purchasing of bullion itself.
The move has to be seen as long term bullish for the gold price and is yet another way of limiting downside risk for gold investors. GATA has for a long time been railing against what it sees as gold price suppression by the gold banks and governments, but probably none of this has the potential impact for control of the gold market which can be, and probably is being, exerted by the Chinese, although they are doing their best to keep a low profile - but because this is broadly positive for gold it may not be in that organisation's interests to comment yet it would seem to be an equally manipulative policy, but in support of the goldprice rather than in suppressing it..
http://www.proactiveinvestors.com.au...nes--8209.htmlComment
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Re: China:- Gold no GOOD !
"It ain't over till it's over." - Yogi Berra.Originally posted by Mega View Post
Similar things were said about floating the exchange rate again, and it ain't happening until it happened.
Almost at the flick of a switch, it is suddenly deemed the domestic economy is strong enough to withstand impacts of a managed float exchange rate, whereas a week to a month before the exchange rate is floated, the managed float was not even considered, as China "does not bow down to foreign political pressure."
Until the G20 deadline came up.
In case of Gold, I guess the counter-argument is that it serves to show dis-interest or low interest in an item in order to minimize the increase of cost to obtain that item.Comment
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Re: China:- Gold no GOOD !
I hope you're kidding. Have you been to China lately? FYI there are more cell phones sold in China than the population of the US. My friends sales of turbos kits for exotics (R8, Ferrari, Porsche TT, Lambos) to China recently exceeded USA...Originally posted by bpr View Post
Maybe you should hop into Beijing, Shanghai, Shenzhen for a quick peak?Comment
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