Monday, October 17, 2011

Gold as money: China still buying gold in preparation for new global currency

If you rely upon the manipulators at the FED, CME, and CFTC who program Americans into believing that gold is not only a commodity, but a bubble that has reached its peak, then all you need to do is look outside the confines of the United States to realize that nearly every country East of Moscow believes gold is money.

New and recent charts show that not only is China buying gold in massive quantities as deflation drives down the price in the West, but they appear to be buying it in preparation for a new global currency to replace the dollar, and in their minds, that currency will be the Chinese Yuan.

CFTC data shows that hedge fund managers, large speculators and gold and silver traders increased their net-long position in New York gold and silver futures. Speculative positioning in the market remains at very low levels after sharp liquidation which suggests gold may have bottomed and should rise from these levels.
Hong Kong, the world's third-largest gold trading centre, has become the world's first place to offer gold trading in yuan, further positioning the yuan or renminbi as a potential global reserve currency.
Hong Kong’s Chinese Gold & Silver Exchange Society, a century old bullion bourse, has introduced gold trading quoted in Chinese yuan, making it more convenient for Chinese people and high net worth individuals (HNWs) holding yuan to invest in the precious metal and opening a new way to hedge.  Goldcore via Zerohedge

One year goldcore/bloomberg chart on Gold purchases in Yuan/Renminbi

So while Europe and the US burn under a new liquidity crisis, China is moving their chess pieces into position for the future.  And they see the future in a gold-backed Chinese currency, not the fiat dollar or Euro.


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