Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

[jtabeb]

From Jesse's Cafe American

http://jessescrossroadscafe.blogspot...rves-into.html

"The mainland is seriously considering a plan to diversify more of its massive foreign-exchange reserves into gold, a person familiar with the situation told The Standard.

Beijing is considering changing its asset allocations during the financial tsunami in order to build up gold reserves "in a big way," the source said.

"It's the right time to increase the gold reserves, as the price is about US$710 to US$720 per ounce," said Wan Guoli, vice secretary general of the China Gold Association."

Hope you bought yours before the Chinese start to do so.


http://www.youtube.com/watch?v=3GB0f47BMak

[metalman]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

From Jesse's Cafe American

http://jessescrossroadscafe.blogspot...rves-into.html

"The mainland is seriously considering a plan to diversify more of its massive foreign-exchange reserves into gold, a person familiar with the situation told The Standard.

Beijing is considering changing its asset allocations during the financial tsunami in order to build up gold reserves "in a big way," the source said.

"It's the right time to increase the gold reserves, as the price is about US$710 to US$720 per ounce," said Wan Guoli, vice secretary general of the China Gold Association."

Hope you bought yours before the Chinese start to do so.

"China will continue to buy treasuries ... otherwise the system would get distorted," he said.

ratchet that dollar down, boys.

[jtabeb]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

"China will continue to buy treasuries ... otherwise the system would get distorted," he said.

ratchet that dollar down, boys.

That was the second to last quote, this one was the last one from the article:


"But I think China will diversify its reserves."

[DaveBrown42]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

Beijing's reserves could easily go up to 3,000 to 4,000 tonnes, Tanrich Futures senior vice president Colleen Chow Yin-shan said.

So let's assume that the article is correct, and China intends to bring their reserves up to that level. Could someone here explain to me where they would be able to get gold in that quantity? If http://en.wikipedia.org/wiki/Official_gold_reserves is accurate, it looks like they would need to convince other Central Banks to sell significant amounts, which seems unlikely. Where would this gold come from?

[jtabeb]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

So let's assume that the article is correct, and China intends to bring their reserves up to that level. Could someone here explain to me where they would be able to get gold in that quantity? If http://en.wikipedia.org/wiki/Official_gold_reserves is accurate, it looks like they would need to convince other Central Banks to sell significant amounts, which seems unlikely. Where would this gold come from?

We have 8000 tons they need 4000 tons, it seems pretty simple to me.

A bribe if you will to prevent them from dumping their existing dollar holdings.

[DaveBrown42]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

We have 8000 tons they need 4000 tons, it seems pretty simple to me.

A bribe if you will to prevent them from dumping their existing dollar holdings.

Is the Fed dumb enough to sell gold right when it starts to look like the world is looking for a new reserve currency?

I think if this actually happened it would be a strong signal that the Fed is committed to deflation rather than currency depreciation, no matter how much pain it will cause for the US economy.

So, I guess my point is that if the Chinese are buying, the Fed would be foolish to sell, and if the Fed were willing to sell, China would be foolish to buy.

Then again, I suppose history should tell me not to rule out foolishness.

[DaveBrown42]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

The sources cited in the article concern me; could anyone shed some light on this?

They cite a few unnamed "strategists" and people "familiar with the situation". The only individuals mentioned by name are from the China Gold Association (which from a quick Google search appears to be a trade organization for Chinese gold mining companies) and Tanrich Futures (do they hold gold reserves? I don't know).

I'm not familiar with the news organization (the Standard) or the article's sources so I'm having a hard time evaluating these claims. Wikipedia says "[The Standard] is has seen the editorial direction shift towards a more controversial "tabloid" style of coverage, whilst also shifting to a more pro Government, pro-cartel, nationalistic position."

[metalman]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

That was the second to last quote, this one was the last one from the article:


"But I think China will diversify its reserves."

the japanese threatened to diversify into gold once... didn't happen.

[jtabeb]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

the japanese threatened to diversify into gold once... didn't happen.

This time, it's different?

[jtabeb]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

Is the Fed dumb enough to sell gold right when it starts to look like the world is looking for a new reserve currency?

I think if this actually happened it would be a strong signal that the Fed is committed to deflation rather than currency depreciation, no matter how much pain it will cause for the US economy.

So, I guess my point is that if the Chinese are buying, the Fed would be foolish to sell, and if the Fed were willing to sell, China would be foolish to buy.

Then again, I suppose history should tell me not to rule out foolishness.

Not so. This would be a case of a mutual decision to stop the game of chicken and call it a day.

China gets value out of their dollars BEFORE that value collapses AND the US gets more time to print with out fear of the Chinese dumping their holdings and raising yields. The dollar will still be toast, it will just take longer for it to look "extra crispy" to the rest of the world.

Chinese win, we get time, what's not to like?

[jtabeb]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

The sources cited in the article concern me; could anyone shed some light on this?

They cite a few unnamed "strategists" and people "familiar with the situation". The only individuals mentioned by name are from the China Gold Association (which from a quick Google search appears to be a trade organization for Chinese gold mining companies) and Tanrich Futures (do they hold gold reserves? I don't know).

I'm not familiar with the news organization (the Standard) or the article's sources so I'm having a hard time evaluating these claims. Wikipedia says "[The Standard] is has seen the editorial direction shift towards a more controversial "tabloid" style of coverage, whilst also shifting to a more pro Government, pro-cartel, nationalistic position."

Don't know about the source in the article, but I like Jesse and Bart seems to think he is okay.

Bart, could you weigh in on the credibility of the blog(JCA) and the source?

[c1ue]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

China must be producing 300 tons of gold internally by now.

That's only around $8B, but would be one way to gradually switch from Treasuries to gold reserves.

A deal or two with someone like South Africa could accelerate the process.

And gradualism is a very Chinese thing...

[BobH]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

[quote=jtabeb;60698]Don't know about the source in the article, but I like Jesse and Bart seems to think he is okay.

From my experience The Standard is used as a pump piece. Generally written by someone who is very pro or con the company or commodity. I wouldn't put any weight for investing on this article, imo.

[buljong]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

never mind
the fools will have their party
they always had....

for mortals.. its a different story...

just make sure u have physical...

[GRG55]

Re: Uh Oh! China Buying GOLD BULLION?!? Bye-Bye Miss American Dollar Pie!

So let's assume that the article is correct, and China intends to bring their reserves up to that level. Could someone here explain to me where they would be able to get gold in that quantity? If http://en.wikipedia.org/wiki/Official_gold_reserves is accurate, it looks like they would need to convince other Central Banks to sell significant amounts, which seems unlikely. Where would this gold come from?

They contract the offtake from their own gold mines inside China [C1ue is right]. Long term supply independent of the world's capital markets [that finance mine construction] and non-disruptive to the bullion market.

They said they were going to increase their reserves of gold. They didn't say it had to all be in the form of shiny yellow bars in a vault.