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According to the gold-specializing Swiss Bank UBS, Chinese gold demand exceeded 7.05 million ounces in the first two months of 2011 alone. This incredible demand is equal to roughly 47% of all the gold produced during the same two months! The Chinese are buying nearly half of all the gold that is being produced worldwide. Extrapolated over the full year, Chinese consumers could be in line to buy over 42.3 million ounces of gold just this year. Let me put that into perspective for you. That's more gold than is being officially stored as reserves by China's Central Bank..
The Chinese saw the writing on the wall over a decade ago. They realized the ultimate fate of the U.S. dollar and the fiat currency system. So in 2003, the government of China began an aggressive campaign to secure resources of gold.
They began by increasing the country's gold reserves. Since that time, the People's Bank of China has added 21.2 million ounces to the country's gold holdings. China now has the fifth largest national gold reserve, with over 1,054 tonnes in reserves.
China's gold imports to jump 457% this year
The Shanghai Gold Exchange recently revealed China's gold imports jumped almost fivefold in the first 10 months of this year.
And even though China is the world's #1 producer, the country is expected to import 9.2 million ounces of gold this year as inflation concerns lifts investment demand.
In August, Deutsche Bank said China could surpass India as the world's biggest gold bullion consumer in 2011. Dozens of companies are already working to quickly develop new gold projects to supply the Chinese feeding frenzy for the yellow metal.
An independent resource estimate for the Changkeng gold project was calculated in 2009. Based on diamond drill data from a total of 127 drill holes and 13 surface trenches, a report estimated the Changkeng project to contain 623,100 ounces of indicated gold resources and 386,800 ounce of inferred resources.
A recently published NI 43-101-compliant update estimates the Dachang Gold Project contains 1.88 million ounces of gold in the Measured and Indicated resource category, and 1.51 million ounces in the Inferred category.
But the global economy does not have a shortage of gold. It has a shortage of dollars. It is not oppressed by unpayable gold debts. It is oppressed by unpayable dollar debts. (If lending were restricted to self-interested market actors who need a dollar to lend a dollar, ie not the Fed, you'd really see that shortage.) When you revalue gold, carried on the balance sheet at $42 an ounce, to the post-remonetization price of tens of thousands an ounce, what are you doing? Creating one heck of a lot of new dollars.
Therefore, if Cheng Siwei and Hu Xiaolian follow my advice, join the bubble instead of fighting it, and unilaterally remonetize with devaluation, China should experience the following results:
First: dramatic stimulus to the Chinese economy. Second: dramatic inflow of gold into China. Third: dramatic, but temporary, inflation, in the context of boom conditions and general prosperity. Fourth: eventual stabilization, with China a wealthy First World country which is the world's financial and industrial leader. Fifth: large gold-plated statues of Cheng Siwei and Hu Xiaolian are erected all over China.
Larry Edelson – - writes today: I know for a fact that Beijing wants its yuan to eventually become a gold-backed currency, much like the Swiss franc was originally. Backing the yuan with some gold will certainly help it become a major international currency. Edelson is a financial adviser who travels frequently to Asia, a former high-volume gold trader who is interviewed a lot in the mainstream financial media. I have no idea whether Edelson is right or not. But he’s not the first to make the claim. Doug Casey says that if one country – such as China – switches to a gold-backed currency, the dollar will be toast:
Originally posted by MamaJ
reply to post by stuntmanbob
So.... this is from a blog?
What makes this blog credible?
Originally posted by threewisemonkeys
reply to post by LittleBlackEagle
Context, a wonderful thing. America thinks it can do what it likes because it's a superpower and because it's people allow it to behave in that manor. I would not laugh at the suffering of people, but I would gladly crack open a cold one while watching the arrogant bully that is The United States of America be flushed down the proverbial toilet. How their own people respond to that, well that's down to them. Maybe they will learn from their mistakes and blossom into free thinking human beings like most of the good folk here on ATS. Or maybe they will just carry on being the selfish, backstabbing nation we've all come to love to hate.
A bit like a child. You're not happy that they burned themselves on the hot tap, you did warn them, but you appreciate the lesson learnt as painful as it was. You don't seem to grasp that.