Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: John McCarthy who wrote (105127)	12/2/2009 1:00:21 AM
From: Hawkmoon	Read Replies (1) of 116555

China is going to increase its holdings signficantly, according to Breakfast With Dave, Gluskin Sheff's analyst newsletter with David Rosenberg. Ok.. China is the world's LARGEST producer of gold. So I guess it makes sense that they would want the price to go as high as possible. But since they control the gold miners within China (State Gold Bureau and probably quite a few state owned mining companies), they are basically buying most of their gold from themselves and not the global market. marketoracle.co.uk Furthermore, they are encouraging the Chinese public to purchase gold, presumably from their State Gold Bureau, creating additional demand. Some of these folks will be buying gold on credit, expecting it to rise in price. The proceeds will let the gold mining companies mine more gold. Does this bear any resemblance to what the Chinese did via their manufacturer financing of the US economy? They make stuff, sell it to us, then re-invest it in US assets to keep the currency ration locked, and US interest rates low, so we're able to keep buying their stuff. Hawk

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