Jim,

Top Now? Nope!

CIGA Eric

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Dear Jim,

The following article provides an unusually forceful and specific confirmation of what contributors here have been saying regarding China’s plans to diversify its foreign exchange reserves by acquiring gold and other hard assets. An official is quoted as saying China means to increase its gold reserves (last quoted at about 1054 tons) to 6000 tons in the next 3-5 years and perhaps 10,000 tons in the next 8-10 years.

It also provides an unusually blunt statement regarding China’s low opinion of the U.S. dollar and other Western currencies. A professor at the central bank’s graduate school is quoted as saying, "Strictly speaking, almost half of our country’s foreign exchange reserve is not stable in value and is of high risk."

Respectfully,
CIGA Richard B.

Dubai crisis gives China chance to buy oil, gold: report
Reuters, Monday, November 30, 2009

Relevant excerpts:

Dubai’s debt crisis could be China’s opportunity to snap up gold and oil assets, a senior Chinese official said in remarks published on Monday.  . While the impact of the Dubai crisis on the global economy and on China was not known yet, it would last a while at the very least, Ji Xiaonan, who chairs the supervisory board for big state-owned companies under the State Council’s state assets commission, told the Economic Information Daily.

"That could give China a buying opportunity to put some forex reserves into gold or oil reserves," Ji was quoted as saying by the paper, which is widely read by Chinese officials.

More…

Dear Jim,

For your information… this is horrific! Why did we need cash for clunkers? Heck we just need to make sure the kids do not starve!

CIGA BT

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