By itself that might seem like a drop in the bucket, but in light of developments in the Asian gold market, the significance is clear.
Posted by Adam King on October 07, 2011
Buy all the gold you can while you can.
October 07, 2011 – The insane and totally unfounded faith in the dollar has to come to an end, but for those holding vast sums of US debt, there is a problem. Move too fast and everything you hold goes down the drain. But move too slowly and you end up holding nothing but air.
It’s no secret that major holders of US debt – i.e. China – have been working tirelessly behind the scenes to divest of toxic US notes, but the urgency has been noticeably growing of late. Last week central bank liquidation of US Treasuries quadrupled over that of the week before, to the tune of $32 billion.
By itself that might seem like a drop in the bucket, but in light of developments in the Asian gold market, the significance is clear.
Next year the Pan Asia Gold Exchange (PAGE) will open. Unlike western markets, which trade paper 100 times more frequently than physical gold, PAGE trade will leverage the renminbi one for one with gold. The move away from paper transactions is one more sign that the Chinese intend to create a new global monetary system based on the renminbi and soundly backed with gold.
These events are extremely important to American investors. There is no question that a shift away from aging fiat monies is well under way and that major players are already buying up gold for wealth preservation. The gold price simply cannot continue to resist the upward pressure much longer.
Central banks, and the Fed in particular, are well aware of what’s going on and will do everything possible to preserve what’s left of their currencies’ worth. But as demand grows for gold’s limited supply, the market will prevail.
The current pullback is totally artificial and the extraordinary buying opportunity it has created will soon be gone. Wise investors ought not pass this one up.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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