18 September 2009

China reverses its position on gold

Sophisticated investors know that EVERYTHING in the financial press needs to be read and interpreted as possibly having a bias, including the WSJ and the Financial Times, where I found the following (appropriately preceded by a disclaimer since it is a report of a rumor)...
As recently as 2002, the private ownership of gold was prohibited in China. You could be jailed if caught with any in your possession. Beginning in 2009, in a stunning about-face, the central government removed all restrictions. In fact, as Mineweb and other sources report now it is actively pushing folks to buy some personal metal, with China’s Central Television, the main state-owned television company, running news programs cum infomercials, letting the public know just how easy it is to purchase gold and silver as an investment.

It truly is as simple as can be, because every bank sells gold and silver bullion bars in four different sizes to individuals. (Try to find the same the next time you make the trek down to Wells Fargo.) Mining companies are reportedly encouraging employees to convert some of their wages to gold on payday...

China, we should note, is already reportedly looking at banning the exports of rare earth metals — the elements used in things like hybrid cars and superconductors.
The new rumor is that China may ban the export of silver and gold.

Disclosure: TYWKIWDBI continues to maintain a long position in gold.

1 comment:

  1. Is that true, that the Chinese werent allowed to own gold?

    That explains something very interesting: where I live (Melbourne, Australia), a recent building development attracted a lot of Chinese investment reportedly because the windows were supposed to be gold in colour. The final product was actually more bronze, and the Chinese investors have sued the developers.

    Is this fascination with gold explained by the prohibition they find in their home country?


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