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Market talk of China taking an interest in gold as an alternative to U.S. Treasuries, and of a European fund buying bullion, also helped boost prices.
China surpassed Japan in September to become the biggest foreign holder of U.S. Treasuries, as foreign investors sought the relative safety of government debt as stocks plunged 9.1 percent that month.
Total net purchases of long-term equities, notes and bonds increased a net $66.2 billion in September from $21 billion the previous month, the Treasury said today in Washington. Including short-term securities such as stock swaps, foreigners bought a net $143.4 billion, compared with net buying of $21.4 billion the month before.
China led all foreign official investors in September by posting a net increase in U.S. Treasuries for the sixth month in the past seven, bringing its total ownership close to $600 billion. Japan was a net seller of Treasuries for the fourth month in the past six.
China has bought more than $1 trillion in American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home - a shift that could pose some challenges to the U.S. government in the near future but eventually may even produce salutary effects on the world economy.
Figures from the U.S. Federal Reserve and the Treasury point to a sharp increase in Chinese holdings of Treasury bonds in October. China passed Japan in September as the largest overseas holder of Treasuries, and took a commanding lead in October, with $652.9 billion compared to $585.5 billion for Japan.
But China's leadership is likely to avoid any complete halt to purchases of Treasuries for fear of looking like it is torpedoing the chances for a U.S. economic recovery at a vulnerable time, said Paul Tang, the chief economist at the Bank of East Asia here.
"This is a political decision," he said. "This is not purely an investment decision."
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
Originally posted by disgustedbyhumanity
I won't beleive this until China comes out and says it. Market talk was pumping up Lehman and Bear Sterns a week before they failed. Today is the day to sell gold.
Originally posted by disgustedbyhumanity
I won't beleive this until China comes out and says it. Market talk was pumping up Lehman and Bear Sterns a week before they failed. Today is the day to sell gold.
Originally posted by Reaper106
I bought some gold late last year, have some decent amounts of old silver coins all locked up and secure. I wish I could get some more gold but at this point I think I will have to call it good.
How many oz of gold would you say is a safe bet for getting through this? I know that depends on alot of factors like bills and such. But as a general statement? So far I have secured 14oz, I wish I could go out and double that.
[edit on 30-1-2009 by Reaper106]
Originally posted by doctordoom
When gold hits $3000 and ounce, in the near future, it will be a sign that the end is upon us.