The scale of China's gold demand, which has increased on average at a double-digit clip over the past decade, has caught the market by surprise. Data showed China imported 209 tonnes of gold the first 10 months of last year, versus 333 tonnes by India for the whole year. ICBC launched its second physical gold investment product, which sells gold bars to investors, which can be resold for cash through ICBC based on real-time gold prices. Zhou, from the ICBC Bank, said there was also voracious demand for silver, with the bank selling about 13 tonnes of physical silver in January alone, compared with 33 tonnes in the whole of 2010.
Since the Chinese are not speculating in precious metals but hoarding it, prices will rocket till higher.
4 comments:
Good post.
However, when the rate has been increasing for a decade at a double digit clip, you have to wonder why anyone is surprized.
I think even for seasoned professional money men, compound interest in non-intuitive and always has to be forced intellectually.
Anon.
Why the surprise? Because only geniuses can see what is in front of their eyes. The 99.99999% rest of us would not recognize a clear trend if it hits us on the head. We can hope only to glimpse something obscure and we can be never sure what is what we are seeing.
You can say whatever you want about the Chinese and Orientals in general, but right now they are more rational players in the global economic and political arena than are most Western governments. Which isn't too hard, I have to admit. China does have her share of problems. I am aware of that. But when people are talking about 2050 or 2100, they are only talking about how strong China's global position will be. Nobody questions the continued existence of Chinese civilization.
Barring a major asteroid strike, a nasty killer virus or some other disaster that destroys human civilization as we know it, China will still exist and will largely be populated by the Han. By contrast, the very existence of European civilization is now under threat. Does it make sense for us in this position to lecture the Chinese on "democracy and human rights?" We should fix our own problems first and foremost.
The Western World is full of sententious, moralizing, finger-wagging do-gooders who cannot see the wood for the trees. They provide an endless army of useful idiots for the neo-communist manipulators to exploit; more tractable than anything the Soviets could ever produce, and all of them drunk on the bottomless pool of self-hatred ladled out by our exalted leadership.
Anon.
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