China’s Next Step to invest in Gold??

Posted: August 8, 2011 in Uncategorized
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With S & P now Downgraded America’s from AAA to AA+ Long Term. As we are all aware of China is the largest foreign United States debt holder. China also had strong criticism, downing the US for all the reckless spending behavior. They announced that the “Good Old Borrowing” days are completely over for the United States, and not giving a time frame on when their might be a changed decision.  Many have talked about China being extremely worried about the United States Debt Holdings of which are valued at $1.1 trillion. So far in the first 5 months of 2011, China changed its holding margins by over $300 Million. Standard Charting Bank Announced that China purchased around $24 billion of German/France AAA bonds, as well as $72 billion worth of European Corporate bonds.  From some of my readings many analysts have stated that their is no way  that China has to continue to buy US debt . No matter what happens the United States is China’s biggest trading partner.Information to note, China is currently ranked sixth in the world in Gold Reserves. It is estimated that China has holding over 1,000 tons which is around 1/8 of the United States Gold Reserves.  Is it possible that China will push, and go all in for Gold. Over the past 10 Years gold has climbed to the $1700.00 dollar an ounce which is the all-time high. With the fact that the United States could possibly hit a major double dip, and with other countries having major issues with Debt, China Might be smart in going in as it might be safe haven for their assets. However  it also may be a huge risk to go in as it is at all time highs their could be a major sell off if China pops the price pushing it over the $2000.00 an ounce mark.

At the end of the day none is sure what will happen, and who knows maybe it is still a good time to get into the Gold Rush! We will just have to wait and see what happens.

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