China Is Rising

Last month, China officially surpassed India as the world's largest consumer of gold. Unlike New Delhi, Beijing is encouraging its citizens' gold lust by easing restrictions on the gold trade. The People's Bank of China (PBOC) is preparing to expand the number of businesses allowed to import and export gold on a large scale. It has also increased the amount of tax-free gold citizens are allowed to bring into the country.

Meanwhile, China is finally pulling away from the US dollar. A month after China's government news agency called for a "de-Americanized world," a deputy governor at the PBOC said, "It's no longer in China's favor to accumulate foreign-exchange reserves."

Simply put, China is planning to wind down its own stimulus program of buying US dollars, and instead allow the value of the yuan to appreciate. In preparation for this shift, China has been diversifying its foreign exchange reserves into gold. The PBOC has not released official numbers on its gold reserves since 2009, but experts have begun to speculate that its current holdings are far larger than previously estimated.

- Source, Schiff Radio:

http://www.schiffradio.com/b/The-Eastern-Lust-For-Gold/300816257408594365.html