China Loves Gold

[FlyingTiger]

This isn't good.

So, if you've read any of that, I now want to ask you a question. If you were China, holder of more American debt and more US dollars (and more General Tso's Chicken) than any other country on the planet, what would you be doing right now?

Let's say that you believed that the value of the aforementioned debt and dollars was facing a significant and permanent drop in value in the relatively near future (within a few years). You wouldn't want to make any public announcements about trying to get rid of your holdings (aside from the chicken) for as much value as you can get for them, because that would immediately cause their value to plummet as the marketplace anticipated a flood of oversupply. You wouldn't try to sell a whole lot at once for the same reason. No, first you'd try to keep the value as high as you could for as long as you could by making comments like, "We don't like what you're doing, but we have to keep buying your debt, we have no choice." Then, very quietly, and very slowly, you'd start buying other things that will help protect you from a dollar collapse... like gold:

China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal, it emerged on Friday, in a move that signals the revival of bullion after years of fading importance.

http://digg.com/business_finance/China_Loves_Gold">Full article

[MADem]

1. Hmmm, so is General Tso running the "Cash for Gold! Yes, CASH 4 GOLD!!!" ads on tee vee? NT

[YOY]

2. He's a cruel tyrant but his chicken is so delectable!

n/t

[MADem]

3. Indeed--he's shoveling out the chicken, and raking in the gold! nt

[FlyingTiger]

4. And he outranks Colonel Sanders. We're screwed. n/t