its like water quality testing. Do you test the water or do you test the sediment???? Testing the water gives you todays quality. Testing the sediment gives you the real picture.
China is playing both games. No doubt. I am starting to think that they are playing for check mate while the US is playing for a stalemate. There are only so many moves each player is allowed and each one counts.
China's fascination with gold is more to do with its worthiness as a tool rather than anything else. Put in terms of a chess board, I would suspect that China would use its gold as a sacrificial queen. If it can maximize damage to its opponent through its sacrifice it will. Am I being a bit cryptic? Perhaps, so I'll explain.
If China builds its gold reserves it can begin to dictate terms re: bullion banks leasing/ selling/ hedging. Should a short cover crisis emerge, then China might (at a nominated price) use its gold reserves to 'ease the pain'. But in doing so it puts its opponent to the sword. China may not be able to win the battle outright, but by permanently injuring its opponent it now no longer has an adversary to disrupt its wider plans.
The Chinese economy, whilst showing signs of capitalistic growth, is still a single entity and with control via its central government will orchestrate deliberate and incisive moves to put its economic rivals/ competitors/ adversaries at disadvantage.
I'm sure they know what they are doing, after all they learnt the hard way through the opium wars. I'm also sure they haven't forgotten those humiliating historical events either!
