Gold - Fear, page-48

No Skol,

The Chinese are spending their US$ as quick as they can on hard assets priced in US$ as they are concerned that prices are inflating for US priced assets. This means the US$ is degrading. If they have a fixed nominal amount of currency it is a scramble to get rid of US$ before prices rise too much. They are rising not because things are good but because the US$ is depreciating.

If I got paid no interest on say US$100 I would spend it a.s.a.p. and turn that currency in to something of permanent value such as housing/land/collectables/GOLD/SILVER etc… if i keep it in US$100 currency or even worse digits on a main frame computer I am playing a dicey game. What each US$ can buy today is more than it will buy in the future on all time scales. Therefore the Chinese being prudent and SMART with MONEY turn paper and digits in to REAL STUFF.

JFI