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China Plans To Buy Massive Volumes Of Gold

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China plans to buy massive volumes of gold

China, The Paper Tiger, plans to buy twice the amount of gold the US has (allegedly) stored in Fort Know. This is big news, if true and we will know soon. The plan has been leaked by rep. Kirk of Illinois and God only knows how this man got his information.

But, as the writes argues, this is a clear vote of no-confidence in the US$.

South Africa was once the biggest gold miner, so it is time we pull-up our socks. I am afraid however that the SA Government and Reserve Bank still see gold as the antique relic, as described by J.M. Keynes. They might be in for a big surprise and caught with their pants down ;)

Update1: China has 1054 tonnes in gold reserves.

They are now adding (US$ 80 Billion : US$ 950) x 32153= 2.619 tonnes, so almost tripling their reserves !

This (1054 as current reserves + additional 2.619 tonnes = 3673 tonnes) would make them the 3rd biggest holder of gold reserves, after the Eurozone (ECB) and (allegedly) the USA , but just before Germany.

Update2: Motley Fool mentions comments of Kirk.

Update 3: This is what Google Alert emailed me as a result on a news search on "China" and " gold". Thank you Google!

Update4: Why is this not bloody world news?

Rep. Kirk of Illinois leaks China’s plans to buy $80 billion worth of gold

Commoditytradealert.com; Patrick Kerr. Tweet via USAGOLD1

Rep. Kirk of Illinois leaks China’s plan to buy $80 billion worth of gold, to protect it’s massive foreign currency reserves from hyperinflation. China is particularly vulnerable to inflation as governments around the world openly inflate their way out of the “Great Global Recessionâ€. China currently has approximately 1% of their foreign currency reserves in gold vs the U.S. with 75%. China has less gold than Italy. China’s massive wealth accumulated over the last many years is all paper…hence China’s new label as the “Paper Tiger†of the global economy.

This is a Fox interview with U.S. Representative Kirk from Illinois about the dollar situation, in which he speaks candidly about both China and Geithner’s efforts to stave off panic about the deteriorating fundamental outlook for the U.S. dollar.

Near the end of the interview, you’ll hear Rep. Kirk indicate that China plans to buy $80 billion worth of gold in addition to ongoing efforts to expand their strategic petroleum reserve. The whole interview is worth a listen, but the $80 billion gold purchase plan is one of the biggest developments in the fundamental picture for gold since that same country revealed its prior buying to the tune of 1,054 tonnes.

“They funded a second strategic petroleum reserve and they plan to buy $80 billion worth of gold. That’s two Fort Knox’s (Allegedly, TO). Both of those investments only make sense if you expect significant dollar inflation.â€

China holds a lot of paper, the US holds a lot of gold. By having such a miniscule amount of their foreign currency reserves backed by gold, China is at immediate risk of devaluing their massive wealth. Like Ronald Reagan once said “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.†With governments inflating there way out of the current economic crisis fiat money is being debased, devalued and diminished. Without Gold, China will see their massive wealth erode a la Reagan’s quote on inflation. Patrick Kerr of CommodityBroker.Net

YouTube: Rep. Kirk Says China Is Investing Away from Dollar... Bought Enough Gold to Fill Up Ft. Knox Twice

So it appears the decoupling theory does hold water.

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China, The Paper Tiger, plans to buy twice the amount of gold the US has (allegedly) stored in Fort Know

I assume they mean 'Knox'?

When I was at school, pre-financial engineering, 2x0 equalled 0

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They have been buying loads for the last couple of years. They already have far more than is officially announced.

Russia and the Middle East are pursuing similar policies.

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Guest DissipatedYouthIsValuable
I assume they mean 'Knox'?

When I was at school, pre-financial engineering, 2x0 equalled 0

How silly. These days it equals whatever you can get away with.

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I would have thought if they buy all the gold then the prie of gold would fall eventually as they would be lumbered with loads of shiny yellow metal.

They will use it to back their own currency or as part of a new world wide reserve currency yet to be announced. Either way, there will always be people who want it.

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Might be worth a flutter? Any gold experts out there with an opinion?

Yeah, if people are going ot buy gold that could fill fort knox twice, they won't telegraph it. Same goes for someone dumping gold.

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I would have thought if they buy all the gold then the price of gold would fall eventually as they would be lumbered with loads of shiny yellow metal.

but possibly a far better bet than seemingly unlimited bits of coloured paper with a dash of baco-foil & a pic of the German tenant?

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Memories,

Like the corners of my mind

Misty water-colored memories

Of the way we were

Oh, someone post a rocket. Just for old time's sake.

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They will use it to back their own currency or as part of a new world wide reserve currency yet to be announced. Either way, there will always be people who want it.

When they last river is poisoned, when the last grain is eaten... let them eat gold.

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Yeah, if people are going ot buy gold that could fill fort knox twice, they won't telegraph it. Same goes for someone dumping gold.

Unless, of course, your name is James Gordon Brown

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Yeah, if people are going ot buy gold that could fill fort knox twice, they won't telegraph it. Same goes for someone dumping gold.

They didn't telegraph it, the americans did.

I wonder why? ;)

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China, The Paper Tiger, plans to buy twice the amount of gold the US has (allegedly) stored in Fort Know

That may not be very much alas.

When I was at school, pre-financial engineering, 2x0 equalled 0

:lol: Exactly.

Apparently no independent audit has been carried out since the days of President Eisenhower.

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They will use it to back their own currency or as part of a new world wide reserve currency yet to be announced. Either way, there will always be people who want it.

This is exactly what I was thinking. There has been more than enough chatter about it over the last year.

I think China must have more gold than what they say. Why would they make it public knowledge that they planned on buying loads of it up? Surely this could raise its price meaning they will get less gold for their dollars, so I assume they are already in place to benefit from inflation and are starting to put the pressure on.

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Memories,

Like the corners of my mind

Misty water-colored memories

Of the way we were

Oh, someone post a rocket. Just for old time's sake.

Rocket_20Taking_20Off.jpg

There you go...

post-2575-1244828188_thumb.jpg

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The UK and the IMF ar eboth selling gold.

Who the hell did you think was buying it exactly?

Maybe the UK gov should print £s to buy gold. Yes it would lower the value of the £ but then the £ would be back by something. Eventually the £ would fall in value until all £s issued were equal to the value of the gold held, but at least then we would have a gold standard currency!

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Guest LongBlackKilt
Update1: China has 1054 tonnes in gold reserves.

In 1054 Chinese astronomers spotted the supernova of the Crab Nebula.

It's a coded message.

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In 1054 Chinese astronomers spotted the supernova of the Crab Nebula.

It's a coded message.

Because all gold comes from supernovas?

Hang on, you've got me at it now!

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I work for a company that deals in recycled products, metals, plastic, paper, cardboard etc.

The only people that are buying at the moment, apart from the paper companies for toilet rolls, are the chinese. Do you think they are buying any asset, even if it is a container of cardboard, to get rid of their dollars.

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I'm not convinced. This sounds like another gold bug ramping. China may well increase their gold holding a bit but they've been stockpiling commodities massively. I think they'll try to buy production & extraction capacity next. They already tried for Rio and failed. It won't be the last.

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The only people that are buying at the moment, apart from the paper companies for toilet rolls, are the chinese. Do you think they are buying any asset, even if it is a container of cardboard, to get rid of their dollars.

Less impurities?

Less counter-party risk?

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