Gold and silver prices have been kept artificially low by Govts and Banks. They don't want people buying and hoarding it; they want YOUR cash in their Bank and the Govts need to try and support their currencies.
Now along comes China. Now 2nd largest holder of physical gold. Exports prohibited from Chine - the largest gold producer. They are also importing many tonnes of gold. Why? Their trillions of $$$ of US treasury bonds are almost useless. THE USA hasn't got the $$$ to pay China for bonds they want to sell. So they will try to take it in gold. Many Chinese Co's are not making a profit. Take the 2nd largest steel maker and the Govt railways. What comes first is JOBS to keep the population happy. Profits are irrelevant; or were. Unfortunately the Communist Party can see the writing on the wall. Large ports are full to capacity with iron ore as nobody wants it. Warehouses are full of unsold goods. But they will keep producing.
China kept us from going into recession but the game is changing. The chinese BUST is nigh. And Australia will get hammered. China wants gold to be the default currency traded in Yaun through a new market where every $ invested is backed by REAL gold, not the futures market which is "paper gold", and rather than a useless piece of paper called a $USD. The Chinese will run this market from Hong Kong. They have been putting this strategy together for the last 2 years so far and as their buying increases until they are the largest holder of physical gold, the new REAL gold trading market, backed by physical gold, will give them a huge reward and allow them to recoup their $USD losses. Buy physical gold/silver and undervalued gold stocks and keep the rest in cash. Short sell the iron ore producers and the 4 big banks. Unemployment in Oz will skyrocket as the resource sector (except gold) collapses. Short sell RIO, BHP, FMG,CBA, NAB, WBC, ANZ. Mortgage defaults will explode from the low levels atm. The BUST in Oz will be mining jobs. These people will get a rude shock as mines close as there are no or very few customers. This will tank the banks. Interesting that the high wage earners and greedy Banks will hurt the most. Property values in WA and QLD will tank also. WE will be asking why our manufacturing industries were sent overseas.Cheaper labour of course. Well much lower labour costs in Oz will make manufacturing profitable again, but heh, we closed the factories!
The GFC was only part I. Now part II the Euro zone a basket case. Part III as above.
On the positive side the western world will go into a depression and all the excess credit will disappear. Look back at hisory, to the late 1800's to now. It has happened before. It will be the best way to return to a balance like in the 1950's when 80% of the population was middle class, 10% poor and 10% wealthy...those with gold and silver. And if you to buy anything, don't expect to have a credit card. They are the root of all evil and the banks won't be lending anyway. Want a morgage? Got 25% deposit? No? - then you can't afford one!! Life was simple and with no credit cards people couldn't buy what they couldn't afford. People were healthier and happier...I was there.
DYOR or ignore my post at your (and yor children's) peril. I acnowledge some of the above is from "Sound Money-Sound Investments".
