China currently holds in excess of $2 trillion dollars in paper currency assets. If the US continues to print money, inflation will result and inevitably the US dollar will devalue. As a result of this situation, China must rethink how to protect herself. There is no way China is going to keep hold of this immense amount of US dollars when the Americans use quantitative easing (printing of money) to pay off their debt.
Mr Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said China “will diversify incremental reserves into euros, yen, and other currencies”, and later went on to say “Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets,” he added.
No wonder Gold is knocking on the door of $US1000 per ounce.
Evans- Pritchard states “The comments suggest that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction. ”
We are in the early stages of a major rise in Gold, and conversely a major fall in the US dollar.
Which side do you want to be on???
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