Author Topic: Why Are the Chinese Buying Record Quantities of Gold?  (Read 2266 times)

0 Members and 1 Guest are viewing this topic.

Offline exchange

  • Trade Count: (0)
  • Hero Member
  • *****
  • Posts: 1178
  • Karma: 20
Why Are the Chinese Buying Record Quantities of Gold?
« on: February 01, 2012, 08:38:55 AM »
Here's an article that makes you scratch your head. So according to this article, having gold makes you insolvent? and receiving income with a currency that keeps getting devalued is the way to go.
What else should be expected from the mainstream media such as Forbes. Same thinking since gold $300 and they still insist now in its 12th straight year, since gold $300.

"Third, the purchase of gold would be especially risky for the central bank, which is already insolvent from a balance sheet point of view.  The PBOC needs income-producing assets in order to meet its obligations on the debt incurred to buy foreign exchange, so the holding of gold only complicates its funding operations.  This is not to say the bank never buys gold—it obviously does—but there are real constraints on its ability to purchase assets that do not provide current income".

http://www.forbes.com/sites/gordonchang/2012/01/29/why-are-the-chinese-buying-record-quantities-of-gold/


exchange

Offline PandaCollector

  • Supporter
  • Trade Count: (+5)
  • Hero Member
  • *****
  • Posts: 2529
  • Karma: 82
  • Gender: Male
    • Pandacollector.com
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #1 on: February 01, 2012, 10:26:59 AM »
I do not see why the CB of a country that has a massive current account surplus (around $200 billion/year) needs to take on debt to buy foreign exchange. Just the opposite is occurring; they need places to store their excess foreign exchange. They aren't borrowing to acquire it. The writer must have been writing about the Fed and mixed up the bank names.

Best wishes,
Peter Anthony
http://www.pandacollector.com

tamo42

  • Guest
  • Trade Count: (0)
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #2 on: February 01, 2012, 11:11:26 AM »
Going to Forbes for economic insight is like asking a mechanic where the best place to eat is.

This guy just has no idea what he's taing about. Foreign reserves of the pboc have gone down because they are redeeming (not rolling over) their US Tresuries.

Offline SANDAC

  • Supporter
  • Global Moderator
  • Trade Count: (+8)
  • Hero Member
  • *****
  • Posts: 2264
  • Karma: 118
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #3 on: February 01, 2012, 12:50:48 PM »
The solution to our money problem is so obvious and we are already part way down that path, I'm astonished that no one talked about this:
The simple solution is for the government to loan every US citizen money at 0%, same deal as the bank, with the condition that the loan must be backed with something solid, like US treasury at 2% interest.  Let the loan be 4 years in duration, 6 months before the presidental/congressional election to 6 months before the next election.  The loan amount is, oh, $1 million per household (we can bump that up before the next election).  So that's $20K more income per household.  The income tax rate being the same, everybody is paying more tax, so treasury is getting more revenue.  Plus everyone is doing our patriotic bit buying US saving bond which also keep the treasury interest low.  It is win-win all around.  It got to be, the banker are doing it, and they are smart AND rich folks.

Offline Panda Halves

  • Supporter
  • Global Moderator
  • Trade Count: (+9)
  • Hero Member
  • *****
  • Posts: 1273
  • Karma: 45
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #4 on: February 01, 2012, 02:06:24 PM »

The Chinese individual citizenry are likely buying gold because their government is openly encouraging them to do so.
They issued marching orders for 1.3 billion people to buy gold and removed all the roadblocks they could while establishing systems to make gold ownership easy for everyone. Since suggesting that people protect their wealth through gold ownership a few years ago, purchasing has continued to rise and is likely to be most outwardly apparent to the rest of the world during the Chinese New Year buying frenzy.

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=88452&sn=Detail

Offline pandaguy212

  • Supporter
  • Trade Count: (+20)
  • Full Member
  • ***
  • Posts: 373
  • Karma: 7
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #5 on: February 01, 2012, 06:09:47 PM »
Does anyone know what the price of an oz of gold has to be to bring the world back to the gold standard?  :001_huh:

Offline GDG's

  • Trade Count: (+4)
  • Sr. Member
  • ****
  • Posts: 658
  • Karma: 45
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #6 on: February 01, 2012, 07:26:07 PM »
Offhand I would say 30K an ounce. You won't see the U.S. dollar pegged to Gold but may see the Renminbi partially pegged to the Gold Standard within 10 years. I don't foresee the U.S. dollar remaining as the reserve currency for too much longer. I see hyperinflation or the U.S. dollar revalued within 10 years. Expect a 50% haircut any way it's done. You would be better off holding commodity based currencies or p.m.s.

Offline GDG's

  • Trade Count: (+4)
  • Sr. Member
  • ****
  • Posts: 658
  • Karma: 45
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #7 on: February 01, 2012, 07:30:49 PM »
Venezuela receives shipment of gold, says it has withdrawn $9 billion from foreign banks

CARACAS, Venezuela — Venezuela repatriated a final shipment of gold from foreign banks Monday, saying the country has withdrawn a total of $9 billion in its gold reserves and moved it to the country’s Central Bank.

The shipment of 14 metric tons (15 tons) brought the total amount of gold shipped to Venezuela since November to 160 metric tons (176 tons), Central Bank President Nelson Merentes said...'

Offline BChung

  • Trade Count: (+3)
  • Sr. Member
  • ****
  • Posts: 673
  • Karma: 17
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #8 on: February 01, 2012, 09:08:25 PM »
You Read Gordon Chang? You disappoint me exchange  :confused1: (j/k)

The only & smartest thing Gordon Chang ever did was to get into a field where he has no idea what he is talking about and still be treated as an "expert" (after being completely wrong for more than a decade) by his nation's media, because blaming China for all American Ills is the current and most likely continuing trend, just like Japan in the 80's & early 90's.

Regarding the China Doom camp, I prefer Marc Faber & Hugh Hendry, at least they know what they are talking about and have go in to China to find evidence to support their views. 

Offline exchange

  • Trade Count: (0)
  • Hero Member
  • *****
  • Posts: 1178
  • Karma: 20
Re: Why Are the Chinese Buying Record Quantities of Gold?
« Reply #9 on: February 01, 2012, 09:23:45 PM »
You Read Gordon Chang? You disappoint me exchange  :confused1: (j/k)


lol, I just happened to stumble on this article. I never heard of Gordon Chang.
What amazes me is Forbes allows to have such authors on their payroll.

exchange