In 2009, China took delivery of 209 Tons of Gold. They are quickly becoming the largest holder of Gold, passing India. Why are they amassing so much Gold? Ahhh grasshopper, here's another thought that's way out on the limb but not as conspiracy driven. I mean, we do have the proof that China is hording Gold these days. Well. this is what I told the interviewer from the Street.com (Alix Steele) I truly believed that this Gold buying (and Silver!) was just another step in China's plans to have their currency front and center in the world in a few years. Their goal, when they signed the currency swap agreements with other countries, was to 1. Remove dollars from the transaction, and 2. Gain a wider distribution for their currency. Now. the baby steps that China is taking to get their currency used by more people, will get a HUGE boost, should they decide that when they get around to floating the renminbi, that they back it with Gold & Silver! Talk about making your currency ATTRACTIVE! The hard money investors of the world would flock to renminbi.
Now Alix Steele asked me a good thoughtful question when I told her that. She asked me if there was enough Gold in the world to sufficiently back the renminbi? Ahhh. I said, this is why I believe China will also use Silver, making their currency backed by a combination of Gold & Silver. I could be so far off base here, but I don't think so. To me, this means that Gold & Silver will be underpinned going forward. Sure they could slip further, but in my heart of hearts, I believe that China will be there to support the price of Gold & Silver by buying at the cheaper levels. And if this looks as though it's about to come to fruition, then the price of Gold & Silver will skyrocket, for everyone will want to get in on the action!
