Reports are flying all over the business world that the Chinese government is creating a gold and silver rush in the homeland. According to the website MineWeb.com, the national television of China is promoting the ease and importance of individuals purchasing gold and silver. This a dramatic shift for a government that just a few years ago prohibited individuals from owning precious metals. It is also an indication that government has the metals and are looking for buyes. Add this to Bloomberg report about China increasing their gold and silver positions and it appears the Reds are turning colors.
Even more interesting was a report from David Gallard of the Casey Report that China has become nervous with their holdings in the American Dollar and have apparently begun exchanging the cash for gold.
The circumstantial evidence that a big player is on the gold scene is overwhelming; the rapid increase in gold prices is a clear indicator. Second, there have been reported shortages around the world, meaning someone is buying large quantities. Gallard noted in his article last year the he called the Northwest Territory Mint and inquired about gold. The receptionist after sometime, noted to Gallard the Mint was back logged 30,000 orders, not money, but orders and new orders would take 16 weeks to process. Add this to the US Mint halting sales of the American Gold Eagle and it appears the demand is certainly extreme.
So what does this all mean? It is looking more and more like the floor for any correction is rapidly going up. It also means the boom in gold looks alive and strong. If China is in fact moving in this is good news for gold and silver investors. It is bad news for the American dollar, a currency that continues to get hammered on the international scene.
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