China Understands the Safety of Gold – Do You?

The media has stirred up a lot of fear about the possibility of actually going over the fiscal cliff in the new year. However, Peter Schiff maintains that the cliff is an essential step in repairing the economy. He also continues to stress how much safer gold is than dollar-denominated assets, especially Treasuries:

There is no question that the Treasury market is a classic bubble. The prices make no sense, fundamentally. The US government is able to borrow at much lower rates today than it could five…[to] thirty years ago, despite the fact that it is less credit worthy today than it was back than…It’s a mania. People are buying because they expect a greater fool to pay an even higher price. And eventually it’s going to burst. And when it does burst, it’s going to have a much greater impact on the global economy, and particularly on the US economy and the average American, than did the bursting of the real estate bubble or the internet stock bubble.”

Some news from China in the past several weeks drives home just how out of touch Americans are when it comes to understanding the value of gold. Check out the following articles and commentary. In China, the demand for gold is rising and the government seems to officially recognize it as real money. The last piece, by Jeff Clark at Casey Research, is a fascinating examination of the Chinese mindset towards gold.

China eyes 450 T gold output in 2015, consumption to rise 

China Moves Forward in Opening Gold Market

Casey Research: How Do the Chinese View the Gold Market?

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