If I was a gold producer I would be interested in intermediaries accepting gold exposure for my hedges and offsetting in a gold backed market rather than a paper market. Otherwise , their hedges are not fully derisked from counterparty risk, likewise as a consumer I would only deal with gold backed banks. If that means I use a hong kong bank as opposed to NAB or whoever so be it.
Could this mean China makes massive inroads into the finance market??? Quite possibly with overseas financed independent regulated transparent entities with appropriate governance regimes!!
One thing i lol today was when some of the US commentators on the business channel referred to the overnight drop in gold due to non-inflationary pressures in Europe and elsewhere as opposed to wealth transfer price manipulation. The fact certain states rely on such manipulation to sustain the bubble highlights the prolonged strength in gold.
Facts are austerity means massive security concerns/costs to maintain order thus money printing and money printing to avoid pending defaults regardless. This can't be argued with. Greek bonds are invested in paid ultimately in return with printed money. The fact a haircut has been offered means their currency has no value as all governments are only as good as their printing facilities regarding financial integrity. Gold simply makes them accountable which they hate!!!
What the near focused don't realise is most more worldly observors simply dismiss the shallow vested commentator rhetoric as simply script driven. Then you have some argue the US should oppose Chinas currency pegged to the US dollar as manipulation. Makes you laugh when China pegs the currency clearly to oppose this very foreign market manipulation against its national interests unlike silly Australia and US is free to adjust production cost/prices however it likes but fails to do so!!!
Bottom line is Europe and US have lost the marketing manipulation handle, hollywood is in decline, nuclear standover tactics have been minimalised and their bubbles are about to burst!!
Only safe place is precious metals and a few other assets as China has found out in recent years particularly in comparison to the US dollar!!!
