More Reasons Gold Is Going to $2,000

The biggest holder of U.S. Treasuries isn’t happy. And why should they be? They’re sitting on the sidelines holding US treasuries worth $797 billion. That’s quite a chunk of change. Of course I’m talking about China. The Chinese have been the biggest foreign creditor to the United States and in recent statements they’ve made it clear that Washington needs to maintain the value of the dollar. “We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried,” said Chinese Premier Wen Jiabao. It’s estimated that around 50% of China’s total reserves are held in US treasuries. And they know that the reserve currency they hold is depreciated with each passing day. With so much riding on the price of the dollar you can bet that Beijing has been keep a close tally on America’s spending — and the results can’t be pleasing. To say the least, Chinese faith in the dollar is feigning. And I’ll give you one guess as to where they are going to spend their $797 billion nest egg… Gold! Right now China is 6th on the list of world gold holdings with around 1,000 tonnes of gold reserves. Not bad right? Wrong. When you look closer at the statistics you can see that China has a mere 1.9% of its total reserve holdings in gold. Compare that to the U.S. with 77% and you’ll start to see China’s future motivation. China is in the market for a reserve currency that’s stable. And when it comes to stability nothing glitters like gold. Need proof? Look no further than another developing world powerhouse… India. Recently India made a bold move to start protecting itself from the U.S. dollar and fiat currencies in general… News broke that India made a huge gold purchase from the IMF — somewhere in the neighborhood of 200 tonnes. Previously, the government of India held 350 tonnes of gold reserves. This 200 tonne purchase is a 57% increase …

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More Reasons Gold Is Going to $2,000

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