China buying Gold hand over fist

The Chinese worried about a possible U.S. default are buying gold and silver hand over fist . The Chinese rush to Gold alarmed by the fear of the U.S. default , Gold is The traditional safe by excellence in times of uncertainty in the currency markets, with the extreme volatility of bank stocks and the fear of sovereign debt defaults (those whose bonds were issued by domestic banks are likely to become toilet paper, what the rating agencies often classify - wrongly - with the name junk) , a true 'gold fever broke among the Chinese investors, with a surge in sales of bullion coins by more than 120% in the first quarter of 2011 on an annual basis. A trend that has pushed up the prices of the yellow metal over the threshold of $ 1,600 an ounce. To drive the demand of the market towards the safe haven par excellence is also the debt crisis of the euro area and the situation far from rosy in the U.S., where the Congress has not yet reached an agreement on raising the debt ceiling with the risk of debt default for the country.

This is why China is focusing on gold. For some time China was a net seller of gold , as well as being a major producer. According to the World Gold Council (WGC), together with India, the country where the demand for gold recorded the strongest growth rates globally. The demand in China is extremely strong, and one of the main factors that drive the market's fears is the rising inflation. Data in hand, in the first three months of 2011 the demand for gold coins and ingots in China amounted to 90.9 tons, an increase of 123% compared to 40.7 tons in the same period last year. In India, sales stood at 85.6 tons. Globally, in 2010 the demand for bullion coins stood under 1,200 tons. According to analysts, the 'gold rush of the Chinese market is a new phenomenon. "Only a few years ago, the Chinese would not have bothered to buy gold bars and coins. But now people will buy them, instead of jewels, as they have a higher value over time . For the Chinese to buy gold is a kind of insurance, they feel they have made a safe investment. Currently, the gold reserves amount to only 1, 6% of the total assets of China, but analysts view it is possible that the Bank of China starts to buy more gold. Especially given the uncertainty related to yields on the US Treasury bonds issued by the Fed, on which China has invested for years because it was believed to be the best way to "park" the money arising from the huge surpluses of their trade balance.

Hyper-Inflation To Push Gold To Double before year End

The fever of gold continues as investors pour into Gold and Silver in order to escape the European and America debt abysses .Even today, the precious metal rises above the threshold of $ 1660 per ounce. It is considered a "safe heaven" of wealth against the odds of the the U.S. and Europe the public debt crisis. By the end of the year gold price could go up as high as 3 thousand dollars. The problem is that the financial system, is incapable of producing real wealth but just debt through credit



Today the gold price is growing, as it is used to do for now almost 11 years. Yesterday it rose above a threshold of $ 1600 per ounce . Analysts say that this "fever" becomes more frantic when investors try to find some "haven" protection of wealth, before the abyss of the European American debt .

European governments, under pressure from the International Monetary Fund, will meet again in Brussels this week to re-think back about the Greek debt, Barack Obama juggles with the failure to find an agreement about raising the public debt ceiling in the U.S., while ratings agencies are threatening to downgrade the United States's rating.

This year the price of gold has increased by 13%, the biggest jump for 90 years. According to analysts, it is possible that if the debt crisis increases, the price of the precious metal will reach $ 1650 by the end of 2011 and will double in a few years. Considering that China and India are among those that most require it , the gold price could reach up to 5 thousand dollars an ounce by 2020.

The economist Bob Chapman said that "we will see a doubling of the price of gold, around 3 thousand dollars an ounce already this fall". Some time ago I calculated that if you take the entire global monetary liquidity expressed in the main reserve currency, the dollar, and you divide by the amount of physical gold available,This would lead to absurd figures, in the order of about 30 - 60 000 U.S. dollars per ounce. The real problem, is that "there is so much paper around, a lot of finance, and a few products of real value .Gold even at $1600 is still very under-priced said James Turk yesterday , there is definably a shortage in the physical gold and silver and the prices have only one way to go and that is up up and up with few corrections along the way...



Related ETFs : Ishares Silver ETF (SLV), SPDR GOld ETF (GLD) SPDR GOld ETF (GLD), Powershares DB SPDR Gold ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), GoldCorp (GG)

Bob Chapman - Ron Paul is the only shot left

Bob Chapman - Power Hour 19 July 2011

Bob Chapman : The only shot left is Ron Paul ...We lost control; of the country to the banks Walls street and the large pharmaceutical corporations and Insurances , transnational corporations it's pathetic and nobody seems to get it they do not even understand that their country is broke , less than 1 percent in America (exactly 0.8% ) own any gold and silver coins bullion or shares , it is people buying from other countries that are making the gold go up