Why is China Hoarding Gold?

[polynesia]

So everyone likes good investing, but what I'm curious about is, what makes good superior to silver investments? I've heard mixed opinions, where someone says "Gold is a good investment because..." And others say "Silver is a good investment because..."

I own more silver than gold, but I do own both. So which should I focus on?

In case anyone re-enters the good standard, that gold could become very valuable... But silver has the best chance for growth...

So, what's your advice?

Gold or silver?
Bitcoin or Litecoin?

[98problems]

So everyone likes good investing, but what I'm curious about is, what makes good superior to silver investments? I've heard mixed opinions, where someone says "Gold is a good investment because..." And others say "Silver is a good investment because..."

I own more silver than gold, but I do own both. So which should I focus on?

In case anyone re-enters the good standard, that gold could become very valuable... But silver has the best chance for growth...

So, what's your advice?

Both are good ways to store money, but IMO, gold is best because it is easier to store. It takes a lot of silver in order to store any considerable amount of money.

China simply needs to hold a lot of assets because they have a large total amount of funds. Even if they held a small percentage if their assets in gold, by most perple's standards it would be a lot

[kaiy]

China's nouveaux riches too much. Gold so that they can have a more good bragging rights.
 China's Gold and much in demand.

[kashish948]

what if they convert this gold to BTC

[gts476]

China is hoarding gold and US debt because it will eventually have a gold back Yuan.

Why gold backed Yuan? Because one China's one child policy there is no way a welfare system (Ponzi/Pyramid Scheme) will ever work in China. So if Chinea wants to remain world largest economy etc, it needs a way to free itself from the crippling burden of a welfare state. Backing their currency with gold achieves this aim.

Why US debt? Because when China wants to convert to gold backing it will dump these dollars (probably to buy US agricultural land) to kill off US imperialism.

G x

[kerimk2]

Those damn chinks, always stealing our gold.....

[Yakamoto]

China is hoarding gold and US debt because it will eventually have a gold back Yuan.

Why gold backed Yuan? Because one China's one child policy there is no way a welfare system (Ponzi/Pyramid Scheme) will ever work in China. So if Chinea wants to remain world largest economy etc, it needs a way to free itself from the crippling burden of a welfare state. Backing their currency with gold achieves this aim.

Why US debt? Because when China wants to convert to gold backing it will dump these dollars (probably to buy US agricultural land) to kill off US imperialism.

G x

And then there's China just sitting there, ignoring the plenty of land in Canada...

Eh, I'm fine with that. I think china may like us (Canada), but I can't speak for certain.

https://i.imgur.com/JRysOog.png

Gave me a good laugh.

[giveBTCpls]

Just the same as why they are hoarding Bitcoin: They know fiat will go to shit in the next decades so they are getting ready storing all kind of goods that will sky rocket.

[TaunSew]

China hoarding gold?   You meant like how they were hoarding silver during the British Empire and the British responded by turning China into a nation of opium junkies?  Surely this will work better the next time!

Last I heard the CIA opium fields in Afghanistan are running at full production and they need new customers.  

[Possum577]

Most of them end up being dead wrong?  Where have you been the last 10 years mate? China is hoarding goal and maxing out their credit because they know the Whole credit/debt based economy is about to collapse. Then it's a good idea to have something of real value, and not just stuff that's valued falsly within the economy.. yet another proof of how educated People aren't the brightest.

It's easy to judge people when sitting from the sidelines.

Think about it this way. You have a family of 300M, you need to provide for them but don't have enough cash (because you're at war or work's not going so well or whatever) so you decided to borrow some money...little, by little.

I'm not saying it's right but it's completely arrogant to reduce the context to "educated People aren't the brightest."

[Possum577]

...

China is just being smart, buying gold (and other hard assets) with all of their FIAT$.  Like the OP wrote, hardly anyone really knows what is going on in China and what their gold policies are.

Owning gold, in your own physical possession, is plainly smart.  Whether you are a country (China) or an individual (me).  How much gold to hold is up to each one of us.  I typically recommend 5% - 20% of one's net wealth to be held in gold, depending (we are at 11%).  Only about 1% of Americans own ANY investment (non-jewelry) gold.

Besides, gold and BTC do share one fun characteristic: they are both a lottery ticket that may come in large...  I wonder whether it will be gold or BTC that reaches FOFOA's $55,000 first...

fofoa.blogspot.com

Long and hard reading, start in 2009 (yes.....).  He is perhaps the top gold analyst in the world.

(No, he does NOT like BTC...)

So you propose putting 10% of one's wealth into lottery tickets.

I think you misunderstand either investment fundamentals or why gold is good to have in your portfolio.

[Possum577]

So everyone likes good investing, but what I'm curious about is, what makes good superior to silver investments? I've heard mixed opinions, where someone says "Gold is a good investment because..." And others say "Silver is a good investment because..."

I own more silver than gold, but I do own both. So which should I focus on?

In case anyone re-enters the good standard, that gold could become very valuable... But silver has the best chance for growth...

So, what's your advice?

Money was backed by gold until the 1970's, not by silver. Also the gold market is bigger, and it can be used to back things, that's why countries look for gold reserves, and less for silver.

USD was backed by silver in the early 1900s through 1930s. Google "Silver Certificates"...

[polynesia]

Those damn chinks, always stealing our gold.....

I would rather say China is the one financing US' fiscal deficit. 

[OROBTC]

...

Possum577

That is not what I wrote (putting 10% of our wealth into lottery tickets).  We have 11% or so in gold, not the Powerball.

I believe that gold is an excellent investment (that also provides insurance vs. .gov and bankster malfeasance).

Bitcoin is another asset class, IMO, that provides some more diversification.  But, I have less than 1% in BTC.  At this point, I trust gold more (as does China).

There is the real possibility, hard to quantify, that gold's price could go to the moon (Alice).  Some BTC commentators suggest that it too could reach nearly astronomical numbers.  My comment was that gold and BTC both shared this interesting characteristic, that they both could reach very high numbers.  But, each has a strong investment case as well even without such a quantum leap.  And if China keeps buying like they have, well, that might hasten the day when any gold you might own would be worth a lot more than now...

EDIT:

Consider taking a look at FOFOA's blog (in my link above).  That would be the equivalent of a two year sentence behind bars unless you like challenging gold reading written by a true pro.

[nwfella]

Basically China hoardes gold because it's a no lose situation for them.  Being one of the largest holders of USD debt as well as one of the largest stockpilers of gold put's them in a unique position to ultimately make a play on the USD as world reserve currency.  Just imagine Russian based oil sold for some Chinese denominated coin backed by actual gold?!  Stormy sea's on the horizon for our little Island of consumption I'm thinking.

[scryptasicminer]

Basically China hoardes gold because it's a no lose situation for them.  Being one of the largest holders of USD debt as well as one of the largest stockpilers of gold put's them in a unique position to ultimately make a play on the USD as world reserve currency.  Just imagine Russian based oil sold for some Chinese denominated coin backed by actual gold?!  Stormy sea's on the horizon for our little Island of consumption I'm thinking.

China only missing 2 more elements replace USD.

1) A military capable of defending itself.
2) Oil reserve.

Once they have both, US will be at its mercy for economy survival.

[Possum577]

...

Possum577

That is not what I wrote (putting 10% of our wealth into lottery tickets).  We have 11% or so in gold, not the Powerball.

I believe that gold is an excellent investment (that also provides insurance vs. .gov and bankster malfeasance).

Bitcoin is another asset class, IMO, that provides some more diversification.  But, I have less than 1% in BTC.  At this point, I trust gold more (as does China).

There is the real possibility, hard to quantify, that gold's price could go to the moon (Alice).  Some BTC commentators suggest that it too could reach nearly astronomical numbers.  My comment was that gold and BTC both shared this interesting characteristic, that they both could reach very high numbers.  But, each has a strong investment case as well even without such a quantum leap.  And if China keeps buying like they have, well, that might hasten the day when any gold you might own would be worth a lot more than now...

EDIT:

Consider taking a look at FOFOA's blog (in my link above).  That would be the equivalent of a two year sentence behind bars unless you like challenging gold reading written by a true pro.

OK,ok, fair enough. Just giving you a hard time. I'll check out the blog.

[Febo]

They dont hoard only Gold, they also do Cotton and you will not belive, but also BTC 

[huobi_network]

Same reason anyone buy gold: they think the economy may get in trouble in the future, and they are preparing for some fiat strong devaluation. Difference is that they have the secret service and an army of people to make economic plans and collect information, and ways to e active agents.

All the same China could opt for a compromise position, something like Chinese Bitcoin; a digital exchange currency backed by gold. I'm actually surprised someone hasn't done this already and China would definitely have the resources to make that happen.

Hashdollar was a try in that direction, and was a complete failure. But also has not been launched by a major economic power.

Ecuador launched their own crypto, while turned holding , buying and selling any descentralized currency illegal
Depending of the results of the new Ecuatorian law, it may influence other countries to do similar.


http://www.coindesk.com/ecuador-bans-bitcoin-legislative-vote/

There is nothing that indicates that the new digital currency of Ecuador will have any of the characteristics of a cryptocurrency. It is highly unlikely that it will be decentralized, transparent, algorithmically-constrained, or that users will be able to control their private keys.

[tee-rex]

<...>

For now the vision may be greater than the reality. If China planned on pursuing this goal with Russia and Venezuela as partners, they didn't exactly pick the most reliable posse. The Russians blundered on the world stage with the situation in Ukraine, which just blossomed into a public relations nightmare when their lackey separatist rebels shot down a Malaysian airliner. Venezuela has flirted off and on with bankruptcy since 2001; so much for their team-building skills.

<...>

If you don't understand that an official investigation into the causes of the Malysian airliner downing is still going on and at the moment is far from giving definitive answers, how can we believe your other points you bring forward?