Wednesday, September 23, 2009
CHINA Dumping Dollars for Gold?
Dumping Dollars for Gold?
This one is still at the rumor stage, but highly-respected website Mineweb.com reports that the Chinese sovereign wealth fund is selling US Dollars at a rapid clip. Might it be looking to Buy Gold too?
What we know for sure is that the country founded its primary sovereign wealth fund, China Investment Corporation (CIC), two years ago. Its stated aim is rapidly deploying some of its $1.5 trillion forex surpluses – $200 billion initially, with another $100 billion recently added to the kitty – into investment in non-Chinese enterprises. Thus it's been acquiring businesses around the globe, mining companies among them, including Teck Corp., the diversified Canadian mining giant.
We don't know for sure that CIC is Buying Gold, but it seems likely to us here at Casey Research. And, in addition, rumors sneaking off the mainland indicate that within the CIC, a lot of effort is being poured into prospective investment deals in the oil and precious metals sectors. The more it produces, the more it can keep.
The Chinese have made no secret of their disdain for current American economic policy and what they see as the inevitable destruction of the Dollar. That they would be moving to diversify out of the greenback shocks precisely no one, and gold is one logical landing place for all those bucks. We suspect that's exactly what is happening, behind the scenes
Posted by Sax-Gold Ent at 13:22