Post by jeffolie on Nov 10, 2011 9:53:28 GMT -6
[attention gold/silver zealots, I am one]
Buying up the world's gold - China's long-term motive
China is buying gold as part of a long term strategy to position itself ultimately as the global currency of choice and to the benefit of its citizens who it has encouraged to buy precious metals.
Ever since China loosened its restrictions on precious metals purchases, and indeed started selling the idea of gold and silver investment to the general populace via its state-owned banks, the Asian superpower has rapidly begun to challenge India as the world's largest consumer of gold. Given that it is largely believed that the Chinese state is taking in all its own mined gold (it is currently the world's largest gold producer) into its reserves without declaring the increase, the combined off-take within China of market purchases by the general population plus the amount being taken into its state coffers will soon be getting perhaps close to one third of total world gold output and rising ever faster.
China has always taken the long view and plans for eventualities years in advance. Nothing on the global front is unplanned. This has been seen with the ever increasing number of critical metals and minerals for which China has a virtual monopoly of the global market - rare earths is the most obvious example, but there are a number of other metals where China now provides around 90% of global supplies. Imposition of export quotas ostensibly to protect its own industries then follows, forcing prices up to unprecedented levels, and also forcing companies which require these metals as key parts of specific manufacturing processes to move their plants to China as that is the only way they can guarantee supplies, thus benefiting the Chinese economy as well as helping build employment in the world's most populous country.
It wouldn't surprise me in the slightest if China banned the export of silver as well...and that would definitely put the Chinese fox amongst the JPMorgan pigeons. We'll see.
mineweb.com website link www.mineweb.com/mineweb/view/mineweb/en/page33?oid=139070&sn=Detail&pid=110649
Buying up the world's gold - China's long-term motive
China is buying gold as part of a long term strategy to position itself ultimately as the global currency of choice and to the benefit of its citizens who it has encouraged to buy precious metals.
Ever since China loosened its restrictions on precious metals purchases, and indeed started selling the idea of gold and silver investment to the general populace via its state-owned banks, the Asian superpower has rapidly begun to challenge India as the world's largest consumer of gold. Given that it is largely believed that the Chinese state is taking in all its own mined gold (it is currently the world's largest gold producer) into its reserves without declaring the increase, the combined off-take within China of market purchases by the general population plus the amount being taken into its state coffers will soon be getting perhaps close to one third of total world gold output and rising ever faster.
China has always taken the long view and plans for eventualities years in advance. Nothing on the global front is unplanned. This has been seen with the ever increasing number of critical metals and minerals for which China has a virtual monopoly of the global market - rare earths is the most obvious example, but there are a number of other metals where China now provides around 90% of global supplies. Imposition of export quotas ostensibly to protect its own industries then follows, forcing prices up to unprecedented levels, and also forcing companies which require these metals as key parts of specific manufacturing processes to move their plants to China as that is the only way they can guarantee supplies, thus benefiting the Chinese economy as well as helping build employment in the world's most populous country.
It wouldn't surprise me in the slightest if China banned the export of silver as well...and that would definitely put the Chinese fox amongst the JPMorgan pigeons. We'll see.
mineweb.com website link www.mineweb.com/mineweb/view/mineweb/en/page33?oid=139070&sn=Detail&pid=110649