Tech & Biz

China to Increase Its Gold Reserves

by snuffysmith | December 1, 2009 at 09:53 am

127 views | 2 Recommendations | 3 comments

China's Economic Information Daily published remarks of Ji Xiaonan, Chairman of the Supervisory Committee overseeing large state -owned enterprises indicating that Dubai's debt crisis could be a good opportunity for China to purchase gold and oil assets. Ji Xiaonan was quoted as saying that the Dubai debt crisis "could give China an opportunity to put some of its foreign exchange reserves into gold or oil."

But is that really the true reason for increasing China's gold reserves? I think not:

Yesterday, we picked up the China Youth Daily newspaper in which Ji Xiaonan claimed that "China should increase the amount of gold it holds in reserves to reduce potential losses from a depreciating dollar. We recommend China increase its gold reserves to 6,000 metric tons within three-to-five years and possibly to 10,000 tons in eight to 10 years."

Dubai may be providing China political cover for their real concern with the depreciation of the US dollar.

0 See all footage | View Slideshow

Share: email story | add to any | | facebook | stumbleupon

recommend This comment thread is now closed

snuffysmith

at 09:55 on December 1st, 2009

Rosenberg: Gold May Be Going To $2600 Thanks To Chinafrom Clusterstock by Vince Veneziani

snuffysmith

at 09:58 on December 1st, 2009

Marc Faber: Dubai Was Just The Tip of The Sovereign Default Iceberg

Marc Faber warns that further sovereign defaults are ahead. Dubai was just a teaser.Starting from 0:45 in the video:

Dubai was just the tip of the iceberg. The ultimate result of the financial crisis will be not just bankrupt banks, but more bankrupt governments.
Massive U.S. economic stimulus means that U.S. bonds will one day have to offer higher yield than corporate bonds due to default risk.
China has learned one thing from the U.S. -- how to massage and doctor economic statistics.