As the US dollar’s value continues to drop, China looks to invest in gold for stability.
Growing concerns about the slow death of the dollar rather than a saviour’s goodwill are underpinning China’s widely publicised purchases of European government debt, according to experts. But as the Eurozone debt crisis spreads from Greece and Portugal to countries like Italy and threatens the very survival of the euro, China’s finance mandarins and keepers of the country’s 3 trillion dollars foreign reserves are looking yet again at gold as the anchor of stability.
Yu Yongding, a former adviser to the Central Bank of China and strong critic of US treasury bonds, an asset in which about 1.2 trillion dollars of China’s foreign reserves are invested, has been calling on Chinese rulers to diversify as much as possible of China’s holdings to guard against a weaker dollar. Continue reading