China could buy all the gold stocks. With this title, the Handelsblatt ran the headline on 8.3.2013 in its Online edition. What is this unlimited wealth of the middle Kingdom?
According to Handelsblatt information, the foreign exchange reserves of China grow since 2004, by more than 700 percent. With this sum it would be an ease to the entire gold reserves of all Central banks two Times to buy. This shows two things quite clearly:
1. The emerging markets are not emerging in the original sense any more. They have outgrown their infancy and today a serious Global Player.
2. The emerging markets – and particularly China – are economically so strong that these economies will challenge the saturated economies such as the EU and the USA in the coming years.
The new purchaser, also for Gold, sits in the middle Kingdom. This is also buy Gold? Yes, definitely. This is because: Only the substance decides.
In a world in which “cold and creeping expropriation” due to Inflation and the real interest rates daily money destroyed. A nice example of this is the German Federal bond. This has generated in the past, the real interest rate (interest – Inflation > 0). For almost one and a half years, this is no longer the case. An investor loses money if he invests this in a supposedly secure. Now you can say: “Sure, but Gold pays no interest.” Right, but it backs up for several thousand years, the purchasing power. In the days of Nebuchadnezzar has the equivalent of an ounce of Gold in about as much purchasing power as today (measured in loaves of bread, which you buy can).
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Article image: wolfgang sussitz / pixelio.de