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Old 01-07-2013, 07:35 AM   #1
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China to double gold consumption in 3 years. Add ETF

Stolen from Sinclair's site. The biggest deal here is obviously the ETF IMO.. If they get a Chinese GLD started up, that is going to be insane.

http://www.arabianmoney.net/gold-sil...prices-go-now/

China plans to double gold consumption in three years, how high will gold prices go now?

China’s Ministry of Industry and Information Technology announced that it expected Gold consumption in the country would be running at more than double national gold production by the end of 2015, more than double Chinese gold consumption forecast for 2012.

According to the MIIT statement, domestic demand is set to surpass 1000 tons by the end of 2015. It said this would ‘widen the fundamental market shortage’ and noted that the shortage of supply will persist in the coming few years as domestic gold supply ‘might only reach 450 tons by that time.’

Official gold policy

The ministry promised: ‘In order to strengthen the gold industry the government will increase gold mine investment, speed up industry consolidation and international cooperation. It also said it would ‘develop gold trading platforms and investment variety (presumably meaning ETFs).

‘With regard to acceleration of industry consolidation, the government aims to lower the number of gold producers in the country to 600 companies by the end of 2015 from the current 700. And, the top 10 gold producers could be responsible for 260 tons of total output, up from 100 tons, by the end of 2015.’

ArabianMoney readers will not be too surprised to hear that China now has big plans for gold. Only recently we published the thoughts of ‘Mr. Gold’ Jim Sinclair who forecasts $3,500 an ounce gold and higher is coming on the back of Chinese demand (click here).

China is looking to diversify its assets away from the US dollar and to protect its national savings against devaluation and inflation by investing in one currency that no central bank can print. Ironically the nation faces quite a challenge in achieving this because it cannot raise gold output anything like as fast as it would like.

Huge buyers

The impact of Chinese demand for an additional 500 tons of gold per annum on the gold market will be enormous. This is more than all the gold bought by the global central banks last year.

Mr. Sinclair knows what he is talking about in predicting very much higher gold prices from the current stalemate in the gold market. This is about long-term global macro trends that have little to do with day-to-day market trading.

The big picture is still hugely gold positive and now the Chinese are jumping on the bandwagon. Investors do you need more than that?
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Old 01-07-2013, 08:01 AM   #2
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The paper makes a presumption about the ETF, but they could just as easily be talking about a new exchange like PAGE was supposed to be.
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Old 01-07-2013, 08:04 AM   #3
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The Chinese are simply planning for their future, something the USA can't seem to do very well. I suspect that China has significantly more gold reserves than they let the world know about.

If we could just get over our perpetual campaign model of government somehow, replace some of the lifers in Congress and get our collective shit all in one bag, maybe we could become contenders again.
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Old 01-07-2013, 12:04 PM   #4
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I was thinking recently, if I was China, and has truckloads of US Dollars as reserves, and still HUGE trading surpluses - if they decided, to pull a big stop of their T Bills purchasing:

China: "we have enough of that paper things, thank you very much. We know we cannot unload much of that, without causing the rest of our reserves (ie, the rest of our huge pile of dollars) to tank, but...
Going forward, we will rather spend our trade surpluses in different ways - ie, gold & hard assets accumulation"

...which they obviously do, around the globe, with both hands. Would that explain the reported surge in the percentage of US debt being monetized by the Fed outright? I remember, not that long ago, that it has been reported here and there, that Fed is monetizing about 40%-50% of TBills (and it was an outrage back then), then it was 55%, now I heard stories around the blogosphere of about 80% - all in less than, I don't know, maybe 6-8 months time? Or is it all bull ?
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Old 01-07-2013, 01:29 PM   #5
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I haven't looked for a follow up, but it looked like China has essentially stopped buying treasuries as of October: http://www.pmbug.com/forum/f13/tin-f...html#post14924
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Old 01-07-2013, 01:42 PM   #6
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Originally Posted by PMBug View Post:
I haven't looked for a follow up, but it looked like China has essentially stopped buying treasuries as of October: http://www.pmbug.com/forum/f13/tin-f...html#post14924
Thanks pmbug, that explains it, indeed.

I wonder what the likes of Mike Norman have to say about that... "nothing to see here, all is good, the Fed can monetize it all, if needed, and obviously, the crucial one: 'we are not Zimbabwe'".

Feck, I really feel sorry for all these people about to wake up with their hand in the chamber pot.

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