Posted by Brittany Stepniak - Thursday, September 15th, 2011
A recently released WikiLeaks cable shows that China is converting much of its foreign holdings in gold; far away from the U.S. dollar.
A majority of China's gold reserves are located here in the U.S and in some European countries.
While the U.S. and Europe have an alternative agenda to dissuade people from viewing gold as an international reserve currency, China's upping their ante. In doing so, China aims to push other countries towards reserving in more and more in gold; leaving the U.S dollar by the wayside.
Last week, European business officials announced that China plans to make its currency, the yuan, fully convertible for trading on international markets by 2015. Zhou Xiaochuan, governor of China's central bank, said the offshore market for the yuan is "developing faster than we had imagined" but there is no definitive timetable for making the currency fully convertible. Presently, the yuan cannot be easily converted into other currencies, because of government restrictions.
China's gold holdings are small compared to other major economies. It has 1,054 tonnes, the sixth-largest reserves in the world, according to data from the World Gold Council.
This only furthers the complications and growing weakness of the dollar. As China is buying tons of gold and the yuan is traded freely, the dollar's dominance is under great pressure to maintain its status as the international reserve currency. These changes could very easily make it much more expensive for our government to borrow money, and to “run perpetual trade and budget deficits."
The U.S should prepare for a major wake-up call, because we may not have the #1 reserve currency for long...
As a reserve currency, the US dollar is the default for international transactions. If, for example, a South Korean company wants to buy wine from Chile, chances are they will carry out the transaction in dollars. Both companies must then purchase dollars to conduct their business, leading to greater demand. The value of global commodities, such as oil, is also generally demarcated in US dollars.
Being a reserve currency allows the US to borrow at low interest rates, as central banks around the world are eager to buy US government debt. "Any country that can finance its expenditures by printing money or selling bonds is essentially getting a free lunch," Aizenman told Al Jazeera.
With China's apparent change of heart, that "free lunch" now might come with a hefty tab. Given the massive US trade deficit, average Americans might be sent to the restaurant's kitchen to wash dishes if the dollar loses its status as the world's reserve currency.
Many experts suspect other countries will follow China's lead and invest more heavily in gold reserves themselves. The good news for China is that large gold reserves help promote the internalization of its RMB (the official currency of the People's Republic of China). That's just more bad news for the U.S. and the dollar...
This further signals how crucial our relationship with China has become. Currently, “ChinAmerica” – a term for the Chinese/American relationship coined by historian Niall Ferguson – is the most significant economic relationship in the world. Three decades ago, no one foresaw this shift in dynamics.
Source: http://www.wealthwire.com
Sunday, September 18, 2011
CORRECTION: Strong gold and silver bullion coin sales for August
The U.S. Mint reported 54,000 ounces in sales last month of the new America the Beautiful 5-oz silver bullion coins.
CORRECTION AND UPDATE 9/5-- A weekly report of the U.S. Mint sent to news media including Mineweb, reported total American Eagle gold bullion coin sales of 104,500 ounces for the month of August as of Aug. 29, 2011, more than double the 41,500 ounces of gold bullion sales reported during August 2010.
However, figures posted on the U.S. Mint website as of Sept. 5, 2011, reveal a total of 112,000 ounces of American American Eagle gold bullion coins were sold at the end of August of this year.
The Mint media release also reported total American Eagle silver bullion coins sales of 2,264,500 ounces for the month of August as of Aug. 29, 2011, down from the 2,451,000 ounces reported during August 2010. However, the U.S. Mint website revealed 3,679,500 ounces of American Eagle silver bullion coins were actually sold in August of this year.
A total of 26,500 American Buffalo one-ounce gold bullion coins were sold for the month of August as of Aug. 29, 2011, according to the Mint media release. The one-ounce bullion coin was not minted last year.
However, the U.S. Mint website now says that 28,000 American Buffalo one-ounce gold bullion coins were sold during the month of August.
The Mint news release said 54,000 America the Beautiful five-ounce silver bullion coins were sold for the month of August as of Aug. 29, 2011.
The release also said combined American Eagle gold bullion coin sales and American Buffalo gold bullion coin sales for the month of August as of Aug. 29, 2011 was 131,100 ounces. However, the figures posted on the U.S. Mint website as of Sept. 5, 2011, show the combined total for August is 140,000 ounces.
The news release also revealed that the combined America the Beautiful silver bullion coin sales and American Eagle silver bullion coin sales for the month of August as of Aug. 29, 2011, were 2,318,500 ounces. However, the Mint website figures for August reveal the combined total would have actually been 3,733,500 silver ounces.
Last month the U.S. Mint took the unprecedented step of suspending the online sales of gold collector coins for the first time recent memory in order to re-price the coins as gold prices neared $1,800 an ounce on Aug. 9, 2011. The move did not affect U.S. Mint gold bullion sales.
source:
http://www.mineweb.net
CORRECTION AND UPDATE 9/5-- A weekly report of the U.S. Mint sent to news media including Mineweb, reported total American Eagle gold bullion coin sales of 104,500 ounces for the month of August as of Aug. 29, 2011, more than double the 41,500 ounces of gold bullion sales reported during August 2010.
However, figures posted on the U.S. Mint website as of Sept. 5, 2011, reveal a total of 112,000 ounces of American American Eagle gold bullion coins were sold at the end of August of this year.
The Mint media release also reported total American Eagle silver bullion coins sales of 2,264,500 ounces for the month of August as of Aug. 29, 2011, down from the 2,451,000 ounces reported during August 2010. However, the U.S. Mint website revealed 3,679,500 ounces of American Eagle silver bullion coins were actually sold in August of this year.
A total of 26,500 American Buffalo one-ounce gold bullion coins were sold for the month of August as of Aug. 29, 2011, according to the Mint media release. The one-ounce bullion coin was not minted last year.
However, the U.S. Mint website now says that 28,000 American Buffalo one-ounce gold bullion coins were sold during the month of August.
The Mint news release said 54,000 America the Beautiful five-ounce silver bullion coins were sold for the month of August as of Aug. 29, 2011.
The release also said combined American Eagle gold bullion coin sales and American Buffalo gold bullion coin sales for the month of August as of Aug. 29, 2011 was 131,100 ounces. However, the figures posted on the U.S. Mint website as of Sept. 5, 2011, show the combined total for August is 140,000 ounces.
The news release also revealed that the combined America the Beautiful silver bullion coin sales and American Eagle silver bullion coin sales for the month of August as of Aug. 29, 2011, were 2,318,500 ounces. However, the Mint website figures for August reveal the combined total would have actually been 3,733,500 silver ounces.
Last month the U.S. Mint took the unprecedented step of suspending the online sales of gold collector coins for the first time recent memory in order to re-price the coins as gold prices neared $1,800 an ounce on Aug. 9, 2011. The move did not affect U.S. Mint gold bullion sales.
source:
http://www.mineweb.net
Friday, September 2, 2011
Gold production in China set to climb over 10%
China's gold production is expected to rise by more than 10% in 2011 from a year ago period. During the first half of the year, China's gold output grew by 5.18 tonnes, or 3.25% year on year to 164.42 tonnes, said the Ministry of Industry and Information Technology.
In June alone, the country produced 32.39 tonnes of gold, according to a statement on the ministry's website. The combined output value of Chinese gold producers amounted to $18.55 billion during the first half, up 23.37% from a year ago period.
Moreover, the gold producers' first half profits jumped 34.19% year on year. China is the world's biggest gold producer, having raised production every year since 2004. In 2010, output was pegged at 340.880 tonnes, up 8.6% from 2009.
In a recent report on the Chinese gold market, J P Morgan has noted that the China Gold Association expects Chinese gold investment demand to double within the next two years.
"Going forward, we believe the widening structural deficit in the supply and demand picture, long term demand for gold jewellery in China, India and other developing countries, persistent concerns regarding inflation, as well as the less transparent factor of sovereign purchases (that is likely to skew demand to the upside), will continue to give long term support to gold prices,'' the investment banker has said in a note to its clients.
In 2007, China made the most of its cost advantage to become the world's largest gold producing country, replacing South Africa. Analysts said China had long anticipated taking the No 2 position from the United States in 2009, but the rapid decline in output in the traditional major gold producing countries gave China the title about two years ahead of its own expectations.
Gold production is concentrated in the eastern provinces of Shandong, Henan, Fujian and Liaoning in China. Remote western provinces such as Guizhou and Yunnan, which have vast quantities of the yellow metal, has also attracted keen investment interest from firms in Australia and Canada.
Sajesh Patel, investment consultant at a foreign bank here said, ``China's gold output has been increasing for three consecutive years along with the rising prices. According to the China Gold Association, China's output of gold in 2009 totaled 314 tonnes, an increase of 11.34%. Despite this, the country imports about 100 tonnes of gold each year.''
Analysts have added that China is finding new gold reserves faster than it is producing the precious metal.
Source: http://www.mineweb.com
In June alone, the country produced 32.39 tonnes of gold, according to a statement on the ministry's website. The combined output value of Chinese gold producers amounted to $18.55 billion during the first half, up 23.37% from a year ago period.
Moreover, the gold producers' first half profits jumped 34.19% year on year. China is the world's biggest gold producer, having raised production every year since 2004. In 2010, output was pegged at 340.880 tonnes, up 8.6% from 2009.
In a recent report on the Chinese gold market, J P Morgan has noted that the China Gold Association expects Chinese gold investment demand to double within the next two years.
"Going forward, we believe the widening structural deficit in the supply and demand picture, long term demand for gold jewellery in China, India and other developing countries, persistent concerns regarding inflation, as well as the less transparent factor of sovereign purchases (that is likely to skew demand to the upside), will continue to give long term support to gold prices,'' the investment banker has said in a note to its clients.
In 2007, China made the most of its cost advantage to become the world's largest gold producing country, replacing South Africa. Analysts said China had long anticipated taking the No 2 position from the United States in 2009, but the rapid decline in output in the traditional major gold producing countries gave China the title about two years ahead of its own expectations.
Gold production is concentrated in the eastern provinces of Shandong, Henan, Fujian and Liaoning in China. Remote western provinces such as Guizhou and Yunnan, which have vast quantities of the yellow metal, has also attracted keen investment interest from firms in Australia and Canada.
Sajesh Patel, investment consultant at a foreign bank here said, ``China's gold output has been increasing for three consecutive years along with the rising prices. According to the China Gold Association, China's output of gold in 2009 totaled 314 tonnes, an increase of 11.34%. Despite this, the country imports about 100 tonnes of gold each year.''
Analysts have added that China is finding new gold reserves faster than it is producing the precious metal.
Source: http://www.mineweb.com
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