This is not investment advice. I am not an investment professional, and you should seek professional advice before making any investments.
- Gold imports by China may increase after investment demand more than doubled in the first quarter, with the country overtaking India to become the largest market for gold coins and bars, the World Gold Council said.China produced 340 metric tons of gold last year and consumption was about 700 tons, leaving a gap of 350 tons to 360 tons, Albert Cheng, Far East managing director at the council, said yesterday. “With increasing demand in China we will have to rely on imports to fill the gap between demand and supply.” China is the world’s largest gold producer and second-largest in overall consumption.[emphasis added]China’s investment demand jumped 123 percent to 90.9 tons in the first three months [of 2011], compared with an 8 percent rise to 85.6 tons for India, the council said. Bullion jumped to a record $1,577.57 an ounce this month as investors sought a store of value amid rising inflation and concerns about the strength of the global recovery.
Here’s a chart of gold consumption for India and China; the numbers for 2001 through 2010 are for the entire year; the 2011 numbers are for the first quarter only:
Before the US Dollar was global reserve currency, that role was played by Britain’s Pound Sterling. During the period when Pound Sterling was losing its reserve currency status it lost 90% of its buying power. In my opinion we are in the early middle stages of a shift away from US Dollars, a reserve currency shift that will have a similar impact on the lives of Americans. The rest of the world is figuring this out.
Many Americans will have to get hit by a bus before they realize this. The impact will leave a mark.
The way I see it we have two choices:
1. Unleash the creative and productive American Spirit and start producing real wealth right here in America; this would require a) Washington to stop believing in its own omnipotence and omniscience; b) close the Federal Reserve and implement a sound currency whose value is not subject to the whims of an appointed board of wise men.
Or:
2) Take what we get and like it; the long winter. Thanks you, sir, and may I have another?
It appears in the near term that the Eurozone will melt down next. The Greek crisis is starting to spill over; protests are taking place in Spain. Norway has just announced it is suspending bailout assistance to Greece. The head of the IMF’s recent arrest for allegedly sexually assaulting a New York City hotel maid provides a backdrop. This coincides with the ending of QE2 and and a very possible resulting fall in US stock market prices, just like when QE1 ended. It will be the USD’s turn to shine; the trend has already begun as the markets anticipate the end of QE2. Since the Fed’s Treasury buying will be reduced, other sources of funding will be needed. The traditional source of this funding has been to crash the stock market and scare people into the “safety” of Treasuries. All of you who bought into the stock market ramp job could be about to have your money stolen by Wall Street and the Fed.
The sequential takedown of fiat currency values (USD then Euro then USD then Euro …) will be used to hide the fact that the value of all fiat currencies is collapsing in order to inflate away the unpayable debt burdens. By the time this process has finished (perhaps a decade or more) fiat currencies will have had their buying power shredded.
The people who are driving this boat do not have your best interests in mind. In fact, your interests are the furthest things from their minds. When the deck finally begins to slip below the waterline they will take to their lifeboats and leave you to drown. Do you understand?
