Posted on 27 August 2013 with no comments from readers
The chart below showing monthly net Chinese imports of gold from Hong Kong shows an exponential curve. This is China taking advantage of the stupid manipulation of gold prices by central banks to accumulate more real assets at low prices.
Why are the wise Chinese doing this? Simple really, they note that money printing by central banks is going to blow up the global monetary system and want to be invested in the one money that these guys cannot print.
The Chinese invented paper. They know its strengths and weaknesses. As a money it is always a disaster over time because its value is eroded by governments printing too much of it. That is happening now with great abandon.
Back in April this year the Bank of Japan took it to a new level with a highly aggressive money printing program. Not by coincidence that is when the gold market was deliberately manipulated lower as a way to disguise this obvious inflationary time bomb.
When will the pigeons come home to roost on this one? It’s already happening with interest rates on bonds rising by the most ever this summer. US mortgage rates have jumped by 25 per cent in a few months and the housing recovery is over in the most recent data series.
There are such world happenings in the financial domain. These market trends and movements are hard to analyse and understand. But, investments are crucial for a healthy future for any individual. Timely decisions and diversifications of investments are necessary. We have cryptocurrencies stealing the investors these days and auto trading robots have made the investing procedure simple and easy. Follow link to know more about this.
Bond bear market
The 30-year bull market in US treasuries is history and now heading in the opposite direction. It makes excellent sense to be out of bonds in a falling market, and that is what the Chinese have been doing by buying gold.
Now the rest of the world will begin to follow them. But really it is too late, the massive transfer of real money from West to East, or China at least not Japan, has already happened. Just look at this chart:
For ArabianMoney’s advice on the best ways to invest in gold and silver see the main article in our investment newsletter this month for subscribers only (click here).