Friday, May 13, 2011
The Great Gold Race
But there are indicators that the accumulation of gold, once considered passé, is now considered in a much more serious vein.
China and Russia are now hell bent on accumulating more gold in their coffers. One analyst believes China may use a third of their $3 trillion in foreign reserves to purchase gold to back up the Yuan.
China currently has 1.6 percent of its reserves in gold and is considering investing more than $1 trillion in gold bullion.
Michael Pento of Euro Pacific Capital stated. "China wants to be an international player, and they need to own more gold than they currently have." he continued, "China is out to have more gold than America, and Russia is aspiring to the same,"
According to Robert McEwen, chief executive officer of producer U.S. Gold Corp in a recent interview in New York. "When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S."
And Century Weekly recently reported, "...China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals."
Russia has purchased eight tones of gold bullion in the first quarter of this year.
According to Adam Sharp of Wealth Wire,
"This is a big reason gold and silver are headed higher. Occasional dips are inevitable, of course. When they happen bears will declare the bubble popped (after a one-week correction).
"Then the uptrend will continue, intact. And they'll say, "bubble, bubble bubble bubble bubble, bubble!", again.
"And gold bugs will be laughing all the way to the vault.
"That's how I see it, anyway. Could be wrong, it's happened before. But, I did say the same thing when gold was $1140 in Why I'm Buying the Gold Dips in December 2009."
Now Steve Forbes, founder of Forbes Magazine, states although it may seem crazy today, a return to the gold standard is likely in America. Steve Forbes, the founder of one of the nation's premier economic magazines and onetime GOP presidential contender, says he believes the nation will return to the gold standard within five years because doing so would solve a number of economic, fiscal and monetary issues.
"What seems astonishing today could become conventional wisdom in a short period of time," Forbes said in an interview with Human Events magazine, a conservative publication.
According to Forbes, returning to the gold standard would mean stabilizing the U.S. dollar, restoring foreign confidence among foreign investors in U.S. government bonds and dissuade lawmakers from engaging in reckless spending habits.
If the standard had remained in place, Forbes said, the dollar would not be under assault now and federal spending would have been curbed.
"When it comes to exchange rates and monetary policy, people often don’t grasp” what is at stake for the economy, he said. "If the dollar was as good as gold, other countries would want to buy it."
So there you have it. Could a return to the gold standard be the US's only defence against a massive gold buy from the eastern and Asian blocks? It certainly does look like the Q's are working to impelling China and Russian to buy more gold bullion in their own defence.
Posted by Michael Moore at 6:50 PM