Posted on 09/08/2009 10:27:49 AM PDT by Ooh-Ah
China has issued what amounts to the “Beijing Put” on gold. You can make a lot of money, but you really can’t lose.
I happened to see quite a bit of Cheng Siwei at the Ambrosetti Workshop, a gathering of politicians and global strategists at Lake Como, including a dinner at Villa d’Este last night at which he listened very attentively as a number of American guests tore President Obama’s economic and health policy to shreds.
Mr Cheng was until recently Vice-Chairman of the Communist Party’s Standing Committee, and is now a sort of economic ambassador for China around the world —...
What he said about US monetary policy and gold – this bit on the record – would appear to validate the long-held belief of gold bugs that China has fundamentally lost confidence in the US dollar and is going to shift to a partial gold standard through reserve accumulation.
He played down other metals such as copper, saying that they could not double as a proxy currency or store of wealth.
“Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not stimulate the market,” he said.
In other words, China is buying the dips, and will continue to do so as a systematic policy. His comment captures exactly what observation of gold price action suggests is happening. Every time it looks as if the bullion market is going to buckle, some big force steps in from the unknown.
Investors long-suspected that it was China. We later discovered that Beijing had in fact doubled its gold reserves to 1054 tonnes.
(Excerpt) Read more at blogs.telegraph.co.uk ...
Watch for IMF gold sales stories to resurface to bring the price back down.
It’s interesting to note that the 1054 tons of gold quoted in this article is actually from April of this year, and not a new number.
meanwhile didn’t the government jsut agree to hand over som eof our bullion to the IMF?
The analysts are manipulators.
The manipulators are big-time gamblers.
They are all going to lose their fat ankles.
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