Author Topic: China Goes Gold Crazy. Why Now?  (Read 25226 times)

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Online Birdman

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China Goes Gold Crazy. Why Now?
« on: April 29, 2013, 02:04:17 PM »
"China Goes Gold Crazy. Why Now?"  Forbes Op/Ed, April 28, 2013

http://www.forbes.com/sites/gordonchang/2013/04/28/china-goes-gold-crazy-why-now/

...'Demand for “9999” bullion—99.99% pure gold—was five times normal according to Haywood Cheung Tak-hay, president of the Chinese Gold & Silver Exchange Society.  His organization effectively ran out of holdings as members tried to meet supply shortfalls.  “In terms of volume, I haven’t seen this gold rush for over 20 years,” Cheung told the Financial Times.  “Older members who have been in the business for 50 years haven’t seen such a thing.”'..

Offline NBM

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Re: China Goes Gold Crazy. Why Now?
« Reply #1 on: April 29, 2013, 03:15:41 PM »
Quote
It’s probably not a coincidence that the Chinese were the biggest buyers of gold in the last two weeks and, aside from North Korea, China has the most fragile economy in East Asia at the moment.  The concern about the economy is evident throughout Chinese society.

Especially at the top.  On Thursday, Chinese state media reported that the Politburo Standing Committee convened a special meeting to consider the economy.  Normally, the body takes up economic matters only at fixed times, the beginning, the middle, and the end of a year.  The last time it met to discuss the economy in an April was in 2004.

No wonder the Chinese are now stockpiling shiny yellow ingots, coins, and bracelets.

Offline fwang2450

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Re: China Goes Gold Crazy. Why Now?
« Reply #2 on: April 29, 2013, 07:36:58 PM »
I never trust Gordon Chang's articles or posts. He is heavily biased and politically motivated. According to him, China should have collapsed by 2011. After losing his credibility, he still has the guts to make public comments. I often marvel at the thickness of his facial skin.

The Chinese have been crazy about gold and silver for thousands of years. They just did not have the money to buy them in the past fifty years.

Offline BChung

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Re: China Goes Gold Crazy. Why Now?
« Reply #3 on: April 29, 2013, 09:07:30 PM »
Gordon strikes again with his "intellectual" garbage.

The Chinese economy is certainly fragile, but just as fragile as India's & South Korea. Japan crazy money printing frenzy is catching up faster than you can blink.

Chinese have been crazy about gold for a long time BTW..... even before the Financial Crisis of 2008, just not as strong as INdia. For CHina being the biggest gold buyer is also due to the fact that INdia raise the tax for buying gold to 6%. India unlike CHina is not encouraging its citizen to buy gold as its causing a trade deficit (stupid government), on the other hand its actually discouraging its people to buy gold. Then the lack of investments choices in China & the fact that property is starting to deflate is driving investors to gold, as they dont trust the stock market and the property market deflating, if China open up its capital controls, for all i Know buying of gold might not rise or chinese investors wont go as crazy simply because they have more choices to put their money on.  

If anyone truly wants a informed decision than please stick to Mr. Andy Xie, awesome analysis of the Chinese economy & World Economy & he is a China bear backing up with remarkable intellect and facts and solutions & actions that needs to be taken - Andy Xie is a true intellectual, people like Gordon Chang (Clowns) are only hired and still being treated as a CHina expert because his mindless China bashing to please the egoism of the "patriotic" American readers of Forbes is of value.  

Andy's latest article.

http://articles.marketwatch.com/2013-04-22/commentary/38735992_1_gold-buyers-gold-price-precious-metals

enjoy.  

Offline BChung

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Re: China Goes Gold Crazy. Why Now?
« Reply #4 on: April 29, 2013, 09:10:05 PM »
I never trust Gordon Chang's articles or posts. He is heavily biased and politically motivated. According to him, China should have collapsed by 2011. After losing his credibility, he still has the guts to make public comments. I often marvel at the thickness of his facial skin.

The Chinese have been crazy about gold and silver for thousands of years. They just did not have the money to buy them in the past fifty years.

GC credibility was already gone by 2008. Just that his thick skin and nip picking of words extend it to 2010 than 2011......

Online Birdman

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Re: China Goes Gold Crazy. Why Now?
« Reply #5 on: April 29, 2013, 09:22:01 PM »
Thanks for sharing your diverse perspectives.  I enjoy hearing different points of view in response to OpEd pieces.

Offline poconopenn

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Re: China Goes Gold Crazy. Why Now?
« Reply #6 on: April 30, 2013, 12:09:59 AM »
It is time to revisit the old thread started by KonaJim. The posting made by KonaJim will be always good for PM trading.

http://china-mint.info/forum/index.php?topic=2720.0

Here is a historical comparison chart of dollar, gold and oil from 1974 to 2013 from FED. The “inverse” correlation between dollar and gold price is well established fact. The dollar index has been in an uptrend last few months. The end of QE in US next year may push dollar index up further. The recent QE in Japan has caused Yen depreciated about 20% in less than three months and has attracted Japanese to start to buy gold. Actually, gold import by China last two years was lower than 2010. Again this may be related to the strong Yuan.  The strong dollar and Yuan may push gold price lower further in the near future. Nevertheless, most likely, the bottom of the gold price will be about $1,200/oz, which is the average cost of production in US. The production cost in Australia and South African is lower.

http://www.macrotrends.org/1334/dollar-gold-and-oil-historical-chart

Offline NBM

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Re: China Goes Gold Crazy. Why Now?
« Reply #7 on: April 30, 2013, 06:15:18 AM »
Thank you to all who weighed in here.  N48
Sadly enough, I was unaware of both Gordon Chang and Andy Xie before this.

Offline fwang2450

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Re: China Goes Gold Crazy. Why Now?
« Reply #8 on: April 30, 2013, 09:42:42 AM »
Thank you to all who weighed in here.  N48
Sadly enough, I was unaware of both Gordon Chang and Andy Xie before this.
If you had never heard of Gordon Chang before, check this link out:

http://www.amazon.com/Coming-Collapse-China-Gordon-Chang/dp/0812977564/ref=sr_1_1?ie=UTF8&qid=1367328857&sr=8-1&keywords=gordon+chang

That is the book he got famous for. Read readers' comments, especially those by Chinese readers. He has been a China basher ever since.

Offline dobedo

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Re: China Goes Gold Crazy. Why Now?
« Reply #9 on: April 30, 2013, 10:13:30 AM »
Sounds like James Glassman's Dow 36000. If not educational, at least they are entertaining. Too bad KonaJim is no longer with us. I'd love his insights on this again.

Offline BChung

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Re: China Goes Gold Crazy. Why Now?
« Reply #10 on: April 30, 2013, 10:16:50 AM »
Thank you to all who weighed in here.  N48
Sadly enough, I was unaware of both Gordon Chang and Andy Xie before this.

I highly recommend Andy Xie, he have predicted many bubbles coming like Marc Faber, Jim Rogers, etc..... unfortunately being an China based economist he is not well known enough. For the last few years even before the Western Media realize that China is also having serious issues with her economy Andy was already writing articles about it..... if you got the time check out his articles a few years back, whatever said back them pretty much all came true especially regarding the Chinese economy. He was once even attack by the 50 cent gang for being an agent of the US but that died out quickly.

I also like him because he unlike many of other gurus offer solutions that he believe is needed to fix things.

Offline GDG's

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Re: China Goes Gold Crazy. Why Now?
« Reply #11 on: April 30, 2013, 11:42:14 AM »
Has anyone read that book by Gordon Chang? I highly doubt we will see any collapse of China's economy.
Andy Xie is correct that China's real estate is troublesome but wrong about China's government's handling of it. China's government has taken some extraordinary steps to let the air our of their r.e. bubble. Xie's ties to the IMF make me suspicious about his opinions. China is growing fast so of course there will be economic problems but no matter how I look at it they will continue on their way to being the worlds number one economy.

Offline NBM

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Re: China Goes Gold Crazy. Why Now?
« Reply #12 on: April 30, 2013, 07:12:10 PM »
I highly recommend Andy Xie, he have predicted many bubbles coming like Marc Faber, Jim Rogers, etc..... unfortunately being an China based economist he is not well known enough. For the last few years even before the Western Media realize that China is also having serious issues with her economy Andy was already writing articles about it..... if you got the time check out his articles a few years back, whatever said back them pretty much all came true especially regarding the Chinese economy. He was once even attack by the 50 cent gang for being an agent of the US but that died out quickly.

I also like him because he unlike many of other gurus offer solutions that he believe is needed to fix things.

I had to look up 50 cent "gang", it was under 50 cent Party. http://en.wikipedia.org/wiki/50_Cent_Party
These kind of groups are very common in the US as well and not restricted to working for political reasons.
A critic with solutions is often a breath of fresh air.

Offline SANDAC

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Re: China Goes Gold Crazy. Why Now?
« Reply #13 on: April 30, 2013, 08:12:24 PM »
Nice Wikipedia article.  No wonder Wikipedia is banned in China.

Offline BChung

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Re: China Goes Gold Crazy. Why Now?
« Reply #14 on: April 30, 2013, 10:40:32 PM »
Has anyone read that book by Gordon Chang? I highly doubt we will see any collapse of China's economy.
Andy Xie is correct that China's real estate is troublesome but wrong about China's government's handling of it. China's government has taken some extraordinary steps to let the air our of their r.e. bubble. Xie's ties to the IMF make me suspicious about his opinions. China is growing fast so of course there will be economic problems but no matter how I look at it they will continue on their way to being the worlds number one economy.

I disagree... the property bubble is still intact. I just went back to Zhongshan for 1 month for work related reason, and I always pay attention the property prices. Just 3 months ago prices were falling to 2 year low levels but this time I went back the prices have over shot the levels 2 years ago. Well the good news is that in Zhongshan the buildings are not that empty maybe just 30%. But neighboring cities like, shunde, foshan, is ridiculously empty like 90%. Shenzhen property prices are already outdoing some parts in Hong Kong. My classmates in Beijing are telling me how some places in Beijing and Shanghai is already more expensive than Tokyo. Hainan Island has just openly rejected implementing the Central Gov't property curbs since their economy is 50% dependent on property (bubble anyone?)

Its also true that most Chinese apartments are not build to last, and they are consider good quality if they last more than 40 years. New apartment buildings of 3 years in age looks like if they are more than 10 years in age inside and outside, due to poor quality buildings and poor maintenance. THe property bubble will have only affected the rich if it pop earlier now I hear and see many post 80's generation using their parents money for the initial sum of 30% just so they can get on board the property train, which is also due to marriage reasons. I was a kid back in 1997 but I remember what happen when the Asian Financial Crisis struck, people putting all the savings in the property and leverage heavily were in line jumping off their apartments when reality eventually took control again. The same thing is happening in China and South Korea.

Not to mention property is too important for the corrupted officials as many of their bribes comes in the form of property, like the recent property grandpa of China, where a corrupted head of the police in a Guangdong have nearly 200 properties. Fact is once these corrupted illegit gain are force in to the market the market will crash given that no intervention from the Beijing.

THe supply and demand of vacant flats are a hoax, there are so many buildings being built there is enough supply to pretty much even housed the farmers in Chinese villages. The demand is truthfully huge, but that is due to the fact that ordinary Chinese citizen CANNOT AFFORD to buy at these prices. A 50% correction is still too expensive for many IMO, and places like Sh & Bj I think some parts of the property needs to crash like 70% for it to be healthy.

Lastly not to mention many of the curbs are only in the form of paper and no action have been taken and is espicially true that whether the intention from Beijing is good or not, many local gov't simply ignore, delay, etc the property curbs. (Insiders, corruption, career to boost GDP)

THese are not isolated issues, these can been seen in Southern, Eastern, Northern & even the poorer Western China like Sichuan. THe isolated cases are pehaps only in a Changsha & another smaller city in Jiangsu, that are not property crazy. THe lack of investment choices due to capital control have led to this madness, I think this is what we call shooting oneself in the foot eh? The earlier it crashes the better so more liquidty will not vaporize along with those properties & then perhaps buying gold will be even more crazy then. China needs another Premier Zhu Rongji, not another hack Wen Jiabao.

Offline GDG's

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Re: China Goes Gold Crazy. Why Now?
« Reply #15 on: April 30, 2013, 11:09:11 PM »
BChung,

All that chicanery happens in every country. The Javits Center in New York was the epitome of corruption from the first day forward. The Twin Towers were 50% vacant all through the 90's. I remember total floors completely vacant. These also were not isolated cases. This happens in dynamic cities like New York, Guangzhao, and Seoul(only 3 examples but could offer many more). Curbs in China such as must put 50% down on second home are much stronger then all Western Countries. Now they tighten even stronger. Will there be a correction? Sure. That is what makes the country even stronger. There will be growing pains but collapse? Won't happen, in my humble opinion.

Offline rex

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Re: China Goes Gold Crazy. Why Now?
« Reply #16 on: May 08, 2013, 11:53:00 PM »
hello.I am a Chinese  ,