A Chinese Revaluation of Gold and Silver is More Likely than a Comex Default
The prices of gold and silver will finally adjust, most likely not because of a long predicted Harvey Organ style Comex failure of delivery default, but when China decides that it has enough gold to declare a new higher price.
The country with the most gold has an interest in valuing its gold at the highest possible price.
The United States revalued gold 69% higher in 1934 from $20.67 an ounce to $35 after it confiscated its citizens gold leaving it with the largest gold holdings in the world.
Will China soon do the same?
Yet, China continues to buy US bonds to keep the Yuan weak so their economy can export on the global market.
China does not want a strong currency anytime soon, maybe 20 years from now they will want to be more of a consumer based and less of a producer based economy, but they are not ready for that big change.
However at some point they probably will be ready for such a move. Think it depends on how large their gold reserves are and other economic and trade factors
of the gold price is probably in our future at some point. Possibilities include:
(1) Once China is convinced that it has drained every last ounce of physical gold from the system they may raise the bid price for gold in an attempt to simply buy more
(2) After the next crisis a Bretton Woods type meeting is contrived and gold is reintroduced back into the monetary system at a much higher price
China cuts interest rate to spur growth, looks like this fantasy of a gold backed Yuan is ending. China wants a weaker Yuan, not a strong currency.
If China was really draining gold out of the market, the price would be soaring.
Hey there, ass-hat! What are you doing trolling in the forums?
China's treasury purchases/holdings go up and down all the time. How are they trending? FLAT
(shown in billions)
Sept 2013 $1293.8
Sept 2014 $1266.3
Huh, look at that. It's actually DOWN year over year.
So Zman, stop talking shit and start looking at the facts. It's all in the TIC report.
I see you avoided the main subject matter, China cutting their interest rates.
So is the world dumping US bonds? No.