Friday, May 20, 2011

China is the worlds largest gold buyer

Resource Investor:

China becoming the world’s largest gold buying nation is very important. While informed analysts have been saying that this would inevitably happen much of the commentary and most of the public remain completely unaware of the huge implications that Chinese gold demand has for the gold market.

Indeed, there continues to be a huge level of ignorance regarding the scale and sustainability of China’s, but also India’s and other large and increasingly wealthy Asian countries, demand for gold and silver bullion.

I remember when I first started writing about Chinese gold buying and the inevitability of a Chinese gold backed currency. People laughed but now we see that China is the largest gold producer and buyer of gold. If I was holding trillions in debt that the US has no intention of paying denominated in a currency that is losing value because the central banker tasked with its integrity is devaluing it I would be buying old also. You see a central bank can create dollars by pushing a button on a keyboard. In order to increase the gold supply men with machines have to go into the bowels of the earth and dig it out and thus its supply is limited. That's why gold has been money for 5000 years and every government backed paper currency has failed usually within a generation or two. he who has the gold makes the rules.

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