Posted by: Democratic Thinker | September 8, 2009

All the Gold in China

The Telegraph (London) reports that the Chinese government is very upset that the U.S. resorted to printing fake money to ease U.S. financial mismanagement—is threatening to avoid U.S. bonds and buy up gold. See excerpt:


China alarmed by US money printing

The US Federal Reserve’s policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.

A worker smokes in front of a billboard featuring a US dollar banknote on a street in Taiyuan

Working for the Yankee dollar: Beijing is said to be dismayed by the Fed’s recourse to ‘credit easing’ Photo: Reuters

By Ambrose Evans-Pritchard, in Cernobbio, Italy
Published: 9:06PM BST 06 Sep 2009

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”.

“We hope there will be a change in monetary policy as soon as they have positive growth again,” he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

“If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,” he said.

China’s reserves are more than – $2 trillion, the world’s largest.

“Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets,” he added.

(Read complete article at original site)


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