Why does China encourage the population to buy gold? Why does the US not encourage the population to buy gold?

Now the G20 is the supreme body that is ordained to saving the world from the impending depression. Their task share is not yet made public. But they are working unison for over a year now and it is only growing in strength.

They have to jointly fight that the global imbalance is balanced. In my view, they have distributed the task of fighting the recession between them selves. The crux of the problem is to substitute the fake money created by the so called Merchant bankers, out side the purview of Governments and Central Bankers.

So the main task is to take the money generation machine of the Merchant Bankers in to the books of these G20 Nation governments and central banks. That means G20 has to pick up the tap when MBs unwind.

These MBs generated money through leveraging and tried to sustain the leveraged money creation through their positions in the futures market. Since 2002, the strategy was to buy assets and commodities by hedging it against short dollar….all in futures market and key market indices.

For smooth unwinding, they need to reserve these positions. That means there has to be someone who has to pick the stakes in the cash market. That is, when the MBs sell stocks and commodities there must be some one to buy it. Similarly, when they buy the dollar, there must be someone to sell it. Both have to be done smoothly and in a such a way that there was not much of price distortion.

Indian and China has the Main Street that is crazier about gold than anywhere else. Remember India, a couple of days ago announced the purchase of 200 tones of the 408 tones of gold that the IMK is selling….this is to tone the psychology of its public that the gold is still cheap…there own government is buying. When the dust settles, I will not be surprised; China will go for the balance of IMF gold!!!

THEY ARE TRYING TO FOOL THERE OWN PUBLIC!!!!

- Kumar

Related Posts:

• It was NEVER governments intent to “create jobs “.
• End the welfare state.
• What should the Fed do….The Treasury (for now), seems to be the primary customer/borrower.
• The Nine Steps of Hyperinflation:
• 13 reasons why gold will rise further.

Leave a comment