Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (37239)	7/29/2005 8:44:23 AM
From: RealMuLan	Read Replies (1) \| Respond to of 110194

>>What are the odds China backs the RMB by gold at some point?<< The odds is not high now, but will be higher when RMB is prepared for real free float. And it also depends on how stable the price of gold. China has a long tradition to have high percent of gold in their reserve. In 1960s, China had >70% of its foreign reserve as gold. As recently as 1980, they had >50% as gold. Only after the economic reform, decision makers consider gold as non-performing asset, so does not want to hold it. And if the upper trend of gold continues, then the Chinese decision makers may change their idea. Plus, more Chinese economists now agree China has to use some kind of "hard" reserve when RMB floats (that is a final goal). But don't know what the decision makers think about gold. >>Timing?<< At the earliest, 10-15 years from now when RMB maybe ready to float. But I would not be surprised that China will start to accumulate little by little from now, buy on any dip, either in that mystical basket (sell $ to buy gold), or set up some shell company from Caymon Island<g>, or even find some foreign deputies. But in any case, they will hide as much as possible. China has knowingly become the victim of the international price gauging on all kinds of commodities: copper, cotton, grain, soy beans.... And they have paid heavy price for some lessons... So in case they want to accumulate gold, they will do it undercover<g>