Gold's record rally has been attributed to everything from worries about inflation, the dollar and the emergence of exchange-traded funds. One big factor many may have missed: huge buying from China.
Data cited Thursday by China's state-run Xinhua news agency showed that China imported 209.7 metric tons of gold in the first 10 months of the year, a fivefold increase compared with the same period last year.
That surpassed purchases made by ETFs and surprised analysts, who until now had no clear insight into the size of China's buying.
Gold demand in general has soared globally this year, as a result of the sovereign-debt crisis in Europe and the Federal Reserve's new round of bond buying. Gold prices were pushed up to an all-time high of $1,409.80 a troy ounce on Nov. 9. Thursday, gold settled $1.20 higher, or 0.1%, to $1,388.50, up 27% for the year.
"Everybody in the gold market knew there was a surge in investment demand, but they didn't know it was China," said Jeff Christian, managing director at CPM Group.
China's import growth is a reminder of the country's huge but nascent purchasing power.
It comes as the government loosens its restrictions on gold purchases by financial institutions and individual investors. In August, the country began allowing more banks to import and export gold, opening up the gold market to the institutions and their clients.
Then this week, the Chinese securities regulator approved the country's first gold fund designed to invest in overseas-listed gold ETFs, a move analysts interpreted as another bullish sign for gold.
More Here..Ben Bernanke on 60 Minutes: Doesn't rule out QE3
Chinese will create just as much property bubble trouble as that existed in America before the US Ponzi imploded.
ReplyDeleteBut, an economic crisis in China with an imploding property bubble is likely to boil up into a Cultural Revolutionary anti corruption revolution . A Real fast global crisis !
Only some Chinese working people have benefited by the creation of an export of cheap labor produced wealth economy .
They ,having been farmers for forty centuries are aware of the environmental mess cost of all this to their living environment.
Now Inflation is beginning to soar, especially in food prices .
The poorer people must spend a large proportion of their incomes on food.
Bank interest paid on deposits is already well below the inflation rate.
So,in order to preserve their savings value ,people have been forced to turn to speculation in property and to the share market, where the prices of many of the shares is often related to the property market .
They may lose their savings.
Ghost cities of unaffordable and unoccupied apartments are said to exist.
The way the yuan value is maintained low is by stripping any US dollar profit incomes out of the economy, ‘sterilization”, and replacing the ‘hard” foreign currency with Chinese paper Yuan .
Chinese companies got their profits in Yuan by swapping their US dollar incomes.
This swap was a great source of profit for the Chinese government itself as the removed dollars were then invested back in the US in US property bonds and Treasuries if a low US interest was paid it was a free gift on cost free money.
But of course the injection of extra Yuan paper into the economy was very inflationary, but ,as long as the economy was growing fast and the velocity of money circulated fast in a boom economy and wages increased , the inflationary effect was not so harmful .
And at least their central bank was not run for private profit like the US Fed.
The Americans under the Dollar Hegemony were able to print dollars and exchange their dollars for real things .
And then paper flowed straight back as investment and all they then had to pay to the Chinese was low interest on treasury bonds .
A nice little $ paper Ponzi!
It could only last as long as confidence was maintained in the value of US paper.
And the US economy could be driven by foreign credit supply.
When that was lost ,beginning with the sub prime fraudulent AAA bonds collapse, the jig was up for Ponzi master Ben .
The losses were unspeakable numbers, as in ,many trillions of dollars .
And the Chinese and other foreign invested stopped being keen on buying fast devaluing US paper as investments.
Poor Ben and the inkjets .
Poor American Empire .Poor dead Ponzi.
Stuck with war bills to bondholders and now the need for Bankster bailouts too,
Ben was reduced to trying and solve the debt problems by creating even more debt for the US government, by turning to the printing press to save an insolvent America capitalism .
So ben is busy F..king up the dollars value
And the Chinese have been left holding the baby ,with a couple of $ trillions savings now held in US dollar investments.
As the export market for Chinese goods was in trouble ,China too turned to the printing press to stimulate its own economy.
The theory was that the Chinese could be the new great consumers.
But the problem is, Food inflation means the Chinese incomes must go more on food not on buying industrial commodities .
Free US banksters money from the Fed teat is rushing into the Yuan currency in the hope of speculative gains, hopes for a quick profit if they can force the Yuan to be revalued higher.
The rich Chinese are attempting to set up a refuge from trouble by investing in Hong Kong property assets ,where they can now sell their Yuan currency profits.
H.K Deposits in Yuan jumped 45% in October alone to 217 billion Yuan , and that’s worth more than all the tea in China.
hey willscam. bite my ass wallstreet smokers. These people writed this article to sway us to buy bullshit. help me in streets people i need people march with me and we break windows. Come on America, break some windows, burn forests, kick some assholes, beat up any cops. Dont let swat team form up. get em when they arent in high tech gear with sheilds. People bad stuff coming are way if we dont take action now. We will settle for nothing later. as rage against machine put it. Im doing my best in finding gold. i dont know where to look for it. Any help ive been asking thanks. Truth is that wallstreet doesnt care about you. money makers are greedy. senaters are trying best but are getting resisted from behind. help me carry the flag in street. We will march together now as we break property. burn the shithouse down people. get ready folks bad stuff coming are way.
ReplyDelete- Sam
Max Keiser is organizing "crash JP Morgan, buy silver". There is also an organized bank run on December 7.
ReplyDeleteWhen you combine taking your monies out of the banks and buy silver en mass, it is like a double whammy for the banksters.
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ReplyDelete=== DO NOT JUST SIT THERE
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5:50 Yes taking money out of the Bank especially if enough people do it at least 10% or more is a simple and powerful message that anyone can do. Do not just read these posts ... act ... do something ... and email, call, or call everyone that you know and get them to join the Bank run as well.
Sam, Rage Against the Machine are known communists. You can bet if you were to take to the streets, you'd be surrounded by lots of fellow commies. They are usually the first out and are eager to overthrow democracy.
ReplyDeleteso sam the money printer wants to be a window breaker and 7.21 says he is out to destroy democracy and out to overthrow american democracy.
ReplyDeleteSam the commie and 7.21 both have the same ideological problem:
To first find the Democracy left in banksterland to either smash or defend.
If the Chinese who can afford it are buying silver or gold in an inflationary environment caused by an excess of printing money ,this only shows that, as in america there a growing lack of faith in the continuing value of their own governments printed paper money .
ReplyDeleteThe YUAN as well as the dollar is having trouble maintaining the confidence of their nations people in its future value.
Hilary the controler of spies posing as diplmats is worried about china and she says.
ReplyDelete"How do you deal toughly with your banker?"
Right!
if you are insolvant you do not shout at your bankers .
Better to just have gold saved ,you do not have to shout at gold ,it has no ears and makes no trouble by talking back and always maintains its labor created competitive value .