Posted on 03/27/2011 8:11:01 PM PDT by Tolerance Sucks Rocks
Believe it or not Ripley! The People’s Bank of China(PBOC) recommended yesterday that 1 billion Chinese consider buying gold as a hedge against inflation and to preserve values in a world where currencies can fall. The PBOC Financial Markets Review came out just as several major currencies were indeed declining in value against gold; the dollar,1%, the Swiss franc,2.5%, t he British pound, 2%, and the Japanese yen, 2%.
Wow! Be like the Fed telling you to buy oil stocks or crude oil futures due to expectation higher gasoline prices this summer.
So, add the PBOC to other secular influences on the price of gold; namely the conflict in Libya, the European sovereign debt crunch, the developing nuclear disaster in Japan and the extraordinary political unrest in Syria, Yemen, soon traveling to other Middle Eastern capitols. All unexpected by financial market analysts.
And whoever could conceive in their wildest fantasies that 12 states of the union- including New Hampshire, Vermont, Colorado, Indiana, South Carolina and Washington would propose to allow their citizens to use gold and silver coins as legal tender. Gold and silver coins to pay your rent, grocery bills and taxes.
And did you now that gold was selling quite well to ordinary citizens of India at 466 post offices on the subcontinent. Or that India has public companies that offer credit to people wishing to buy gold or silver. Loans to buy gold and silver.
No wonder gold equities were up 5.07% last week, though bullion only rise 0.75%.
Where to now for gold? Goldman Sachs says $1565 in 6 months and $1690 in 12 months. That would be a nifty 18% in 12 months. Though, Goldman warns a short-term lift could spark profit-taking...
(Excerpt) Read more at blogs.forbes.com ...
PING!
The Chinese Gov’t wants the Chinese to buy gold. However, prices are so high that the Gov’t itself cannot buy that much unless they cash in US Treasuries and take a loss. So, the next best thing is to encourage their citizens to buy gold. It may be a smart move, but if the Chinese Gov’t were in a position to buy the gold themselves, they would.
China have a trade surplus with US every month. They could use those USD they accumulated, not in t-bills to buy gold themselves
Yes, but US treasuries at are at an all time high. The Chinese are selling no matter what they say and they are sellin to the US Government I might add. The only buyers in town. We are screwed.
Your assertion is true. For the Chinese gov't to get the money, however, they would have to raise taxes, and even in China raising taxes is not well received.
That’s great! Looks like my stores of metals will be going up.
Hope I can sell them at the right price when they come back down.
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