China has been keeping a secret about gold. Marc Faber reveals it here.
“Dr. Doom” Marc Faber says he’s betting on gold this year… but he’s not the only one.
Gold is a good bet for countries experiencing any geopolitical problems and would like a hedge… and if you read any sort of news, this includes a lot of countries right now.
In the first four minutes of this video, Faber talks about low gold prices… and who is taking advantage of it.
One country low gold prices benefit is China. China consumed a record 41% increase in gold last year… and the demand is only growing. To fight the global recession and keep its economy growing, China devalues their currency, the yuan. Yuan devaluation keeps exports cheap and money flowing in. When the yuan weakens, Chinese investors hedge with gold (video tick 0:58).
Geopolitics is another reason China is hedging with gold. Current conflicts in Asia could interrupt the flow of trade… and China is concerned (video tick 3:08). China is in maritime disputes with at least seven countries… in most cases for natural resources or control of shipping lanes. China just increased their military budget by a record 12.5%… and that’s just the number they’re sharing. The expansive U.S. and Japanese military presence in the area doesn’t help calm Chinese minds either.
As problems with recession increase… and geopolitical tensions rise… Faber believes so will China’s demand for gold.
Crux note: China and its citizens have been buying up every nugget of gold they can get their hands on. They took advantage of last year’s price weakness to accumulate even more. This gold accumulation is part of a massive transfer of wealth and power from West to East.
China is vacuuming up the world’s gold… and Matt Badiali, editor of The S&A Resource Report, believes they have a secret plan behind their actions (something the Chinese government would never admit). Matt recently explained what he thinks the Chinese are preparing to do with all this gold in a special presentation. You can hear all the details on China’s gold moves right here.
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