The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: SG who wrote (28821)	5/22/2010 1:45:00 AM
From: maceng2	1 Recommendation Read Replies (1) of 71400

But why not to gold?! China has $1,230,570 millions in euros. safehaven.com Just looking at the current POG 1kg costs 31,026.94 euros. exchange rate = 1.25 = $38.8k per kilogram. Assuming an infinite supply of gold, this would mean buying 317,290 metric tonnes of gold. The actual above ground world supply of gold is only 161,000 tonnes. en.wikipedia.org This would mean the POG would skyrocket to an astronomical value if China converted just it's euros to gold. Please check the calculation but I think the issue is clear. The problem with converting to gold too quickly is that the vast amount of Chinas foreign reserves would diminish to nearly nothing if the POG rise was too steep. Paper assets would become worthless. Now, we wouldn't want that to happen would we -g-

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