The real reason China is buying so much gold


From Mineweb:

... If you look at the recent history of Chinese gold demand, you start in 2003 when gold ownership was made acceptable, having been banned from 1945 until then.

This occurred at a time when the agency for the People's Bank of China began buying gold for their reserves. Prior to that, HSBC tried to persuade China to buy gold, but the time was not quite right for them. Now it is very right for China to buy gold. What has happened since 2003 and during 2010?

... For good reasons, the government has realized that China, as a whole, will benefit from its citizens owning gold as well as the central bank, the People's Bank of China. Hence, they are actively encouraging the Chinese people to buy gold, as are the banks.

The Chinese have memories of how gold is real money. They are buying it because it is seen as true wealth in all seasons. They don't buy it simply as a hedge against inflation, but because...

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