Saturday, March 1, 2014

The Chinese Are Selling U.S. Debt and Buying Gold

By Dr. Steve Sjuggerud (Thursday, February 20, 2014)

"Specifically, we learned this week that the Chinese government shrank its holdings of U.S. government debt by $47.8 billion in December 2013, the most in two years. One message from this is that the Chinese government doesn't want to hold any more dollars than it has to.

In separate news, China imported, consumed, and produced more gold than any other country in 2013.

China overtook India to become the world's largest importer and consumer of gold, importing over 1,000 metric tons of gold that year (a truly massive amount).

China is also the world's largest producer of gold... nobody else comes close. Amazingly, China's gold production is still increasing... while the countries in the next three places (Australia, Russia, and the U.S.) are comparatively stagnant in their production.

So what does all this mean? Here's what it means to me:
  • The data shows more and more that the Chinese prefer gold to U.S. dollars. Chinese buying like this could help create a new price floor for the price of gold.
  • It's time to diversify some of your savings OUTSIDE the dollar and into China's currency. 
  • It's time to add to your gold holdings now – and hold for the long run.
..."

Increasing Demand for Chinese Yuan Denominated Bonds

Bank of china
SINGAPORE — The local branch of Bank of China (BOC) has sold 3 billion yuan (S$619 million) worth of bonds, in a sign of increasing appetite in the city-state for investment products denominated in the Chinese currency...

The offer was 2.96 times oversubscribed, with 52 per cent of the investors from Singapore, 25 per cent from the rest of Asia and 23 per cent from Europe, BOC said.
...
A recent Reuters report shows that about 18 per cent of China’s total global trade is settled in yuan compared with 2 per cent in 2010.