I don't think that anyone would accept yuans as the currency of transaction....
And so the gold producers can hardly wait to see the Chinese trucks pulling up by the pit.
The private purchase of gold coins has gone down in the USA, because the credit economy doesn't leave much cash in the piggy bank.
but the major point is that if China really starts long-term investing in gold, the price will go up noticably.
There was a major increase in the price of gold that took place on January 3, 2009 -- I can see it on the chart. Do you know any reason for that?
China’s willingness to continue buying United States Treasury securities in large numbers will depend on its need to protect the value of its foreign investments, the Chinese premier, Wen Jiabao, said Saturday. He also said that a stable yuan is in everyone’s interests.
“Whether we will buy more U.S. Treasury bonds, and if so by how much — we should take that decision in accordance with China’s own need and also our aim to keep the security of our foreign reserves and the value of them,” Mr. Wen said.
His enigmatic remarks, made near the end of a visit to Europe, could raise new concerns about China’s commitment to continue purchasing United States government debt.
* M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.
* M1: The total of all physical currency part of bank reserves + the amount in demand accounts ("checking" or "current" accounts).
* M2: M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000).
* M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.
Originally posted by stander
In reference to the "bond jumpers": According to an article written by a guy who seems to know what he is talking about
the upward price trend for gold isn't caused by some bewilderment on the part of various investors looking for other opportunity to find a reliable investment in these uncertain financial times, as I thought, but it is a diversification or a complete switch that was happening in the past, and it relates to a simple parameter called "real rate."
Once there is an increasing demand for gold, selling gold is a logical venture.
Originally posted by ll__raine__ll
questioningall ... are you saying it's imperative people buy gold if they can because their life may depend on it when the shtf? or
are you saying gold is a really good investment at the moment for those who can afford to invest?
Treasury Real Yield at 16-Month High on Inflation Bet
Now, the bond market is saying Federal Reserve interest rates at zero percent, President Barack Obama’s $819 billion planned stimulus package and $8.5 trillion of U.S. initiatives to revive credit markets will reignite inflation.
Survivors and Those Who Win Buy Gold And Silver
We think the secret to getting through this is to hunker down, eliminate debts, keep a low profile, trade in gold and silver shares during this first quarter along with futures, and then adjust in April when stocks sell off. Gold topped out near $850 years ago. This morning, the April, 2009 futures are $908.50. We forecast 80% of the gold upside is still ahead in these markets. Silver is behind gold for now but will catch-up. They never trade like twins most of the time. We think the worst silver could do is $50; but expect much higher prices.
Congress is about to tell those foreign governments that money provided by this law can not used to buy from their citizens. Congress is telling the Chinese that this money cannot be used to buy from Chinese factories. At the same time, the U.S. government will be asking China to finance the spending authorized by the American Recovery and Reinvestment Act. While not privy to what the Chinese government will say to that hypocrisy, cannot imagine it will all be positive.
For some time the U.S. has relied on gullible foreign investors to finance the government’s deficit. As a consequence, the Federal Reserve has not had to monetize much of the U.S. government deficit, despite the size of that deficit. And it followed, therefore, that U.S. inflation was reported as modest. That situation may be on a road to change.
In the second chart is plotted the year-to-year change in U.S. government debt held by foreign central banks and the Federal Reserves. Foreign central banks, the red line, have been increasing their holdings of U.S. government debt over the entire period shown. Sometimes they did so at fairly dramatic rates. Federal Reserve, the blue line, did not need to buy that debt, and allowed its holdings to fall.
Now that situation is changing. The red line has a slight negative trend, meaning the rate of acquisition of U.S. debt by foreign institutions is slowing. At the same time, the blue line is developing a positive slope. That means Federal Reserve is now buying, or monetizing, U.S. government debt. The situation may change dramatically if the “Buy American” requirement angers foreign governments, causing them to buy less U.S. debt. Remember, the money they use to buy U.S. debt comes from trade.