*China considering dropping U.S. Treasuries and Buying Gold Instead*Very Important News- Implication

Originally posted by Metaholic
I want to understand something important.
Should I buy Gold/Silver as coins or as commodities?
If the dollars crashes I can extract my metals for the new currency, or a temporary foreign one.
If it crashes compeltly, with social upheaval, rioting and loss of security for trade in the banking and financial institutions holding my wealth, then I should use some sort of an actual coinage.
And if so, what coins should be used? there are so many variations of gold coins, non of them has an intrinsic standardized value, such as "This is one Ounce of Gold".

What should I do? call the banker and ask him to buy me come Gold metals?

LOL, a banker is not going to sell gold. Call your bank, you will find, they do not have gold to sell. In fact banks are holding onto their gold big time!
There have been lots of links put in the thread regarding websites you can buy metals from.

Silver is really the best thing, if gold is unaffordable. Lots more can be made with silver, I have read things about what silver could be going up to..I am not going to post them, due to the fact - those numbers may not happen.... but let me give you a hint, what some have said..... the amount of silver I have which is in a 5 figure demoniation amount of cost in it - if it
went up to the prices I have read about, I would be a millionare.

Not that money will have any meaning at all, compared to food etc.

But it is the point of preserving what you have RIGHT NOW in value to the future value.

Besides - the dollar thing, can happen in a flash, when it hits, there will be no... months passing before the ramifications, it will happen in a day/hours type event.

The moment China says "NO" they aren't purchasing our T-bills - it won't be a fun day.

Originally posted by traderjack
It all goes back to the secret meeting of Congress and the C&R document which allegedly stated the US stock market would crash in late September early October and that the US would announce it was bankrupt in February.

Yeah, I have thought about that, when I saw this "reuters" article about China.

I thought, wow, isn't that just fitting the timeline from the alleged discussion in that closed door Congress session last year.

I have to admit, it made me also wonder - if what others have been saying, this is a complete orchestrated event. The timelines of things are matching perfect.

So, yeah, I am prepared - now figuring if the timeline is correct - which everything seems to be spinning right on time - then I would guess we will be in the SHTF scenerio within a few weeks now.

Most of our Gold is being purchased quickly.....

www.stuff.co.nz...

China is probably the second largest beneficiary of the dollar system, enough said I guess.

From another point from view, what can China get from gold? To me, nothing important.

In fact, China just bought about $60 billion US treasury bonds last November if I remember correctly. China's trade surplus is $40 billion November 2008, a historical high, and the number is $39 billion for December. What to buy with the money? I would really appreciate if you can tell me something better than dollar.

Save earth, go green.

I am personally curious what role China will play in the future days. On one hand I think they will be on the sidelines but that just doesn't seem possible.

Trying to find info about Gold Prices prior to WW2, but the one and only like I found to a government department is not working.

I remember reading a long time ago how governments bought up Gold in the years leading up to the Great Depression and the subsequent War.

If it is true that we can assess our current directions on a global front by viewing history, then we should expect this current, poorly named, "Recession" to become a fully-fledged Depression within the next year or so.

Also, by following the same concept we can see that historically goverments spend up big on all things required for Warfare. It's as if they all agree to have a war, but not just yet, as they need to make sure they have enough fodder and weaponry for their game. So, as we can see most governments have been doing exactly this for the past ten years or so.. a big push on here to have people join the Military Forces, a big push to arm-up, etc.

I think what you will be seeing this year is perhaps the U.S. government will be the first to use the Depression word, which should then lead into all sorts of difficulties for us plebs as we approach a possible next world war?

Don't, try to build up your savings, when the real bust hits you will lose it all anyway, and whatever you have hidden at home will be worthless.

Do, get into growing your food in containers so you can bring it indoors at night so it won't be raided. Time to look after families interest now, and share what you can with those less fortunate.

Good luck all.

The credit crisis is just hitting home on them now the true effect of it will surface, it seem will all missing the whole point, the point of a stable economy is human we being, human well being. They are trying to strike a balance what has the upper hand Gold or Bonds. Everybody seem to be folding there hand and do nothing about this. If countries don’t do business and keep buying and selling Gold as the last result? Who know what we are preparing for, and Gold should not be losing value. Bonds, equity and doing business gives a sense of peace.
And outrange of the sale of UK Gold at such a loss.

www.telegraph.co.uk...< br />
www.freeinternetpress.com...

www.nytimes.com/2009/01/31/business/economy/31econ.html?_r=1&hp

China (as of 11/08) had $681 billion in US treasuries. So if they dump that and purchase gold, that means essentially they are cashing in the treasuries and the US would have to fork out the $681 billion.

I realize that this is a large amount of money, but I would see this as more of a stun to the economy than a collapse. We would still have 2.5 trillion in treasuries with other countries, China's slice is currently 22% of foreign interests in treasuries--again a stun, but not necessarily a collapse.

www.treas.gov...

delius





[edit on 31-1-2009 by delius]

[edit on 31-1-2009 by delius]

China recently announced they planned to buy 128,000,000 ounces (four tons) of gold. That would represent half of the reported gold reserves held at Fort Knox, KY. I say 'reported' because no independent physical audit has been done in over 40 years. Congressman Ron Paul headed up a committee to do precisely that several years ago, and they were not even ALLOWED into the building! There is a method to this madness, however. I suspect the mutally exclusive strategies of printing trillions in worthless paper currency while somehow not crashing the dollar has been made possible by secretly dumping our gold bullion onto world markets. It is the only reason (other than the Fed's juvenile attempt to hide their actions by refusing to report the M3) that could explain a money supply which has expanded geometrically in the past 5 years without hyperinflation. Since this is all being carried out in secret, world governments and institutional bankers can doubly benefit from the illusion of a strong dollar, while quietly purchasing gold, silver and other precious metals to hedge against the inevitable day when people start asking 'what's that smell?" and realize it's the rotting corpse of the US dollar.

Whilst China might want to increase its gold reserves (and it can do so as its now the world's largest gold producer), it is unlikely to stop purchasing US treasuries... for now.

Unless it continues to supply the US with credit - which allowed the US and the West its seemingly miraculous 10 year economic boom (fueled on cheap debt from the East) - the huge dollar denominated foreign currency reserves, bonds etc that China holds will become worthless.

China will not want to destroy these huge reserves and therefore the only option available to China is to continue to supply the US with credit in order to maintain the value of these holdings.

This dilemma applies to ALL the US' creditors including oil rich states that are also heavily invested in the US. Whilst all of the countries can now see that they have been cheated and what they hold is pretty much worthless, as this miraculous growth in the West was essentially only possible because of the cheap credit these countries were providing.
If these states try to sell their dollar holdings in the open market they will start a domino effect with every other state that holds dollars also moving to selling them, the effect of which would be to destroy all the holdings they have so none of them will do it.

That being said, it clear that this is only a temporary measure, an act of desperation postponing the inevitable.

I would like to point out that the catalyst for the collapse of the US dollar will likely be precipitated by the collapse of the British Pound. The British economy is in exactly the same situation as the US' but the pound has no reserve currency status and so I believe will collapse first as Britain's creditors will pull stop supplying Her with essential funds and therefore will lead to a hyperinflation as the British government prints money to meet its obligations. Currency is all about confidence and whilst global confidence in the dollar is much higher than the pound due to its global reserve currency status, the collapse of the pound will shatter the world's belief in the dollar and cause it also to collapse.

reply to post by questioningall
"I don't think the money printing presses, can print as much money per day, as what the U.S. spends."

Well its worse than you think.

Only 3% of the money supply exists as paper or coin.

The rest is just numbers in computers.

When they increase the supply, they just change the number.

I know what you are thinking, but it is true.

Sad, but true.

We live in the land of fiat currency now, money backed by nothing.

Go over to google video and lookup Zeitgeist Addendum, and
strap in for a bumpy ride.

If you got a weak stomach bring a barf bag.

Good Luck to you all !

Originally posted by Rockpuck
reply to post by disgustedbyhumanity

 

We are in a DEFLATIONARY PERIOD.

When Inflation comes back to replace the period of economic deflation we are experiencing, the price of Gold will correspondingly rise in relation to the inflation that we see.

That doesn't work all the time, coz despite being in the deflationary period, the price of gold is on the rise. That means we are not actually in the deflationary period if the price of gold variable is the parameter to go by to establish roughly the inflation trends. The truth is that this period is both deflationary and inflationary. Here is an article that clues the reality:
www.asianews.it...

The financial upheaval has destabilized the rules that govern over various kinds of investments, so organizations have been experimenting. Gold came now under the scrutiny even though it has never been a short-term "dynamic" investment.

Rockpuck, can you find out if gold buying is done only in USD like the oil buying is done, or can you purchase a ton of gold in any national currency?


[edit on 2/1/2009 by stander]

I am speechless at your post..... I just had to say that..... uuummmmm.... wow..... I am still trying to figure out how to respond to it....... lets just say this...... sure you go right ahead and sell any gold you have......... next thing........ I am sure you will find thousands of buyers for it.... would love to buy any at "spot" price.... considering - no one can get any at "spot" price.... gold is quoted at "spot".... but you can't touch it anywhere near that, including silver..... it sells WAY OVER spot.. plus hard to get too.



When you say way over spot,I hope your not paying more than 2% to buy either gold or silver.

Food and shelter? I'd have that in the worst case scenario rather than shiny mineral deposits.

Gold is sold in all major currencies stander. Here's an example from the UK. Gold priced in GBP @ on-line dealer Baird & Co: Goldline

I'll use the Pound Stering to illustrate; Gold is setting record highs in the £ because more & more people, are exchanging more & more of their GBP for Gold...same with the Euro and the Aussie D...in fact, new record highs in every major currency except the US dollar and the Yen...and they're gaining ground.

At risk of sounding overly dramatic, this global phenomenon could represent the initial stages of a temporary collapse in the paper monetary system. As gub's debase & devalue at warp-speed, Gold is gradually becoming the currency of choice....every central bankers worst nightmare. In the end, will the us dollar somehow be rescued by the G20? Will Gold be reintroduced in some fashion? Will the world end-up with a new reserve currency? Several reserve currencies? A reserve basket of currencies? No-one knows what's gonna happen at this point, so they're returning to the perceived safety of Gold until the verdict comes in.

The US can either debase, or default...those are the only options. One's gradual, the other abrupt & vicious...both inflationary.



[edit on 1-2-2009 by OBE1]

how can gold be worth much if everyone still has some for sale?

how can it be worth much if people are still buying tons of it?

obviously its very plentiful, because a rare resource would be sold out by now

think about it

Originally posted by silent thunder
Many people in this thread have made the arguemnt against gold that "you can't eat gold" and that will be worthless when "TSHTF"...

Well, this might be true if there was a total breakdown in the most fundamental aspects of society and we go to some kind of Mad Max/Anarchy scenario.

Absolutely true. And, furthermore I agree 100%, however, the OP is painting a scenario of US Bankrupcy, in which that WOULD be or close to a complete monetary breakdown. Otherwise I'm all for commodity long-term investment.


AB1

reply to post by OBE1

I'm not sure how this is going to work for the Chinese. They are not going to buy gold coins but gold bars worth billions with the intention to physically posses them. I don't think that anyone would accept yuans as the currency of transaction -- the Chinese currency doesn't have a reciprocal value. The USDs from trading with USA is only a fraction of what the Chinese hold and so they may keep exchanging their currency for USD the way they do it when they buy US Treasuries. But they surely have a choice to buy euros if gold buying isn't pegged to USD. That could affect the world currency exchange rate to some degree, but the major point is that if China really starts long-term investing in gold, the price will go up noticably. 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. And so the gold producers can hardly wait to see the Chinese trucks pulling up by the pit.

If someone with enough money could see ahead and be sure that the Chinese really get into buying gold within a couple of years, then buying a couple of hundred pounds of it right now could turn out to be a pretty good investment. But for most Americans, the news is bad, coz the US Government would have to look elsewhere to come up with the cash to pay for its expenditures, and there are not too many options. Who knows what's in the store . . .

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?

reply to post by questioningall


Perhaps, but you have not answered my question.
In the current economic-law-police structure my rights of ownership are protected, if I buy a bond that says I have gold in the "Golden depository" of some bank, fund, firm or a secure holding place corporation.

so how do I buy into gold?
stocks, or bonds represnting gold that will go up?
short term daily options?
buy the actual metal and store it my place?
and if so, what should one buy? actual coins? small bars?
what kind of coins? 1/2 oz per coin? is there a standart? should I buy silver dillars, that although silver in content has the cursed word "dollar" on it?
is there a standard measuring system of the worth of coins by their weigh? can I get 1000 coins of 1/100 of an oz?

These are the practical question, if you postulate the truth of this scenario.

reply to post by stander

That doesn't work all the time, coz despite being in the deflationary period, the price of gold is on the rise.

I believe this is because that as you say, we are in a state of Deflation as far as the Consumer is concerned. However, the money supply is rapidly growing -- albeit no one is entirely sure where this money is ending up..

It creates a tug-of-war type scenario, deflation against inflation .. until the money reaches the actual economy (consumer, be it individual or corporations) inflation will truly hit -- and thus the price of gold will rise significantly.

Rockpuck, can you find out if gold buying is done only in USD like the oil buying is done, or can you purchase a ton of gold in any national currency?

The Price of Gold is actually set by an institution in England, if I recall the name of the index I will post it..

But to purchase Gold it does not have to be in Dollars at all .. in fact to get an actual delivery of the metal, you need a dealer.. and a dealer is often local in your city, state, country what have you. If you buy online, most sites can do a currency conversion for your purchases (my bank charges a .25 cent fee for doing so).

Gold can very in price depending on the market as well .. Gold is cheaper in India and the Middle East because it is in larger abundance (jewelry). I know a few soldiers who where in (Bahrain?) and bought several items of solid gold for half the price you would pay in America. Granted, jewelry isn't the easiest way to horde gold, but then again, Gold is Gold, so long as you know it's "real" Gold.

London Gold Fix. That's the "international standard" for the price of Gold. You can read up on it here: en.wikipedia.org...

And to those who argued with me that Gold is not meant to follow inflationary trends -- the purpose of "Gold Fixing" is to fix it with Inflation:

On 21 January 1980 the Gold Fixing reached the price of $850, a figure not overtaken until 3 January 2008 when a new record of $865.35 per troy ounce was set in the a.m. Fixing.[1] However, when indexed for inflation, the 1980 high would equate to a price of $2398.21 in 2007 dollars, thus the 1980 record still holds in real terms.