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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (8145)	10/9/1999 2:46:00 PM
From: m.philli	Respond to of 81101

Hi Darleen, From what I understand the Chinese government is allowing the internal price of gold to increase or become equal to the world gold price. Is this correct? I saw something also about the Chinese silver market. Is this their intention for both commodities? If so, does this not give Chinese gold holders a windfall asset appreciation in their gold holdings and jewellery? Would this not be a great move for the government insiders, if they have been purchasing gold previously? Would you think this would cause selling of jewellery by the CHINESE, increasing the scrap supply? Would this be inflationary or beneficial to get the economy growing internally. EX. sell your gold jewellery and purchase computers etc.? Or would the increase in gold price only reinforce the belief that gold to the Chinese (in whatever form) is the best store of wealth. Thereby causing an increase in gold investment by the public. Perhaps selling any u.s. dollars in exchange for gold. Especially if they have a long time distrust of paper money? . If gold is so valued as a store of wealth in China, and imports come through Hong Kong, could we see Hong Kong become the major trade centre for gold? I wonder if the Chinese government would rather see the populace holding gold as an inflation hedge, instead of American dollars? If possible, could you enlighten me to what are the possible reasons why ,the Chinese are tinkering with their gold and silver prices and policy,including the likely problem of export smuggling if the world price and domestic price are not comparable. thanks -mike