Ron Paul: Currency Wars – A Race to the Bottom of the Inflationary Barrel !

Max Keiser: “Sitting on The Doorstep of Global Conflict!!”

Pierre Lassonde: The Chinese Are Accumulating Great Amounts of Gold !

• As much as the Chinese like to hide their gold purchases, it is inevitable it will come out into the open. How do you dispose of US$1.5T in USD denominated foreign reserves without attracting attention? It isn’t quite possible. Local Chinese production can only supply so much of gold. Eventually, the Chinese will dump their massive USD hoard and buy gold in the open market!
    
  Pierre Lassonde – Strong Forces Propelling Gold
  ….“While traveling last week I was speaking with an individual from a top bullion bank from Europe.  He said his trading desk has seen their Chinese business go up to record levels in the last two weeks.  The most interesting aspect to me is the fact that the Chinese central bank is diversifying their reserves away from the dollar, and they are literally buying all of the local gold production inside China.”
   
  “Because of this the Chinese jewelers are not getting any gold, so they are having to purchase all of their gold on the open market.  Internal Chinese citizen demand is already 350 tons per year, and growing by about 15% per year relentlessly.” 
   
  “Chinese demand is already at high levels, so another 15% added to existing demand raises their citizen’s appetite for gold to over 400 tons next year.  If the Chinese central bank continues to consume internal production at the rate they are, it would be difficult for the gold market to experience a major correction.  The Chinese central bank would have to back off purchases of internal production for 3 months or 6 months to get a major reaction in the gold market.”
   
  “The Chinese are worried that the world will discover that they are getting out of the dollar and buying gold.  If they are seen as buying gold on the open market, their fear is that will be viewed as repudiating the US dollar.  Then they’ve got a real Excedrin 3 (headache) problem. That would create more competition for gold, driving the price of gold higher and the dollar lower.  They would then have to buy even more dollars to keep the peg.”
   
  “They keep buying the US dollar, but they know it is not sustainable.  The risk there is that they create significant inflation, thus destabilizing the country.  High inflation inside of China would be extremely dangerous and could literally spark a revolution.  They want the gold, but they have to balance that with stability.” 
    ……
  “The Chinese central bank is doing the right thing, they are using gold as one of their underlying assets, but the problem is that they should have a lot more gold then they currently possess.  This is one of the major factors driving the gold market today.”

end

Fed’s Lockhart: Quantitative Easing Must Be Big!

• QE 2.0 is a foregone conclusion. The amount cited by Bob Chapman, which I believe is closer to the truth, is US$2.5T for the coming fiscal year. The FedRes as already monetized something like US$1.3T on toxic MBS, agency debts/derivatives and on top of that has bought in excess of US$300B in treasuries. The FedRes is already quietly buying up more treasuries as China and foreign countries step on the brakes in their bond purchases.
    
• If QE is really the solution, the FedRes should go the whole hog and print US$1M for every man, woman, child and their dog. They should abolish all taxes and dissolve all debts by QE. Helicopter Ben Bernanke has said the ultimate heresy: His job as central bankster is to stimulate inflation! The USD is toast and with it all major currencies. The Eurozone and Japan have intractable debt problems too. They will never be paid back.
   
  Fed’s Lockhart: Quantitative easing must be big
  WASHINGTON (Reuters) – Atlanta Federal Reserve Bank President Dennis Lockhart said on Tuesday that further easing by the Fed has to be large enough to help boost demand, and purchases of $100 billion of securities a month would be a possibility.
   
  “If we’re going to pursue another round of quantitative easing, it has to be a large enough number to make a difference,” Lockhart said in an interview on CNBC. “As a monthly number ($100 billion) is fairly consistent with what we did before, and so I think it would certainly be in the range of numbers one might consider … but if you were talking about $100 billion as simply the overall program, I think that’s too small,” he said.
   
  Most analysts expect the Fed to announce another round of large-scale asset purchases at its next policy meeting scheduled for November 2-3, and expect buying of around $500 billion overall. Lockhart said he is leaning toward providing further help to the weak recovery.
   
  “I think the risks associated with it are acceptable,” he said. “Quantitative easing will help improve a recovery that is going very slowly and improve the trajectory of the economy overall.”

end

From Global Depression to Global Governance!

• What is the engineered soon coming economic, financial and monetary collapse about? It is the final moves, the endgame by the Illuminati to remake the planet into their New World Luciferian Order. Their plan calls for total economic, financial, monetary collapse while concurrently triggering famine, diseases, ‘natural’ disasters and finally leading the world to World War 3 for depopulation, mass culling of the sheeple. They need a world war as a distraction for the sheeple to protect themselves, the Illuminist ruling elite.
   
• These people have been planning and scheming a return to Babylon, a return to the antediluvian Atlantis One World Government for ages. This will be the Neo Babylon empire, the Mystery Babylon Whore of Revelation 17. They want to bomb the world into submission, into hopelessness, annihilate entire generations, destroy customs, norms, languages, the 7 day weekly calendar …. and re-engineer the human race using strange occult genetic manipulation. All the engineered calamities to prepare the sheeple for the coming of the Luciferian false messiah, the whitehorseman of Revelation 6.
   
• The Trilateral Commission (TC), Council on Foreign Relations(CFR) and Bilderberg Group (BG) are low rung execution arms of the Illuminati. Above them is the Committee of 300 … Council of 13 …. Triumvirate of 3 (Rothschild bloodlines) …. demons, fallen angels and finally Satan. The Illuminati religion traces its roots to the ancient mystery religion of Egypt and Babylon. In their hierarchy, the profane/secular organizations (ie TC, CFR and BG) report to the priestly class who communicate with their ‘god’ Lucifer.
   
  From Global Depression to Global Governance
  The role of the corporate elites’ secretive global think tanks
  We now stand at the edge of the global financial abyss of a ‘Great Global Debt Depression,’ where nations, mired in extreme debt, are beginning to implement ‘fiscal austerity’ measures to reduce their deficits, which will ultimately result in systematic global social genocide, as the middle classes vanish and the social foundations upon which our nations rest are swept away. How did we get here? Who brought us here? Where is this road leading? These are questions I will briefly attempt to answer.
   
  At the heart of the global political economy is the central banking system. Central banks are responsible for printing a nation’s currency and setting interest rates, thus determining the value of the currency. This should no doubt be the prerogative of a national government, however, central banks are of a particularly deceptive nature, in which while being imbued with governmental authority, they are in fact privately owned by the world’s major global banks, and are thus profit-seeking institutions. How do central banks make a profit? The answer is simple: how do all banks make a profit? Interest on debt. Loans are made, interest rates are set, and profits are made. It is a system of debt, imperial economics at its finest. 
           
  In the United States, President Woodrow Wilson signed the Federal Reserve Act in 1913, creating the Federal Reserve System, with the Board located in Washington, appointed by the President, but where true power rested in the 12 regional banks, most notably among them, the Federal Reserve Bank of New York. The regional Fed banks were private banks, owned in shares by the major banks in each region, which elected the board members to represent them, and who would then share power with the Federal Reserve Board in Washington. 
          
  In the early 1920s, the Council on Foreign Relations was formed in the United States as the premier foreign policy think tank, dominated by powerful banking interests. In 1930, the Bank for International Settlements (BIS) was created to manage German reparations payments, but it also had another role, which was much less known, but much more significant. It was to act as a “coordinator of the operations of central banks around the world.” Essentially, it is the central bank for the world’s central banks, whose operations are kept ‘strictly confidential.’ As historian Carroll Quigley wrote: 
   
  “The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
                
  In 1954, the Bilderberg Group was formed as a secretive global think tank, comprising intellectual, financial, corporate, political, military and media elites from Western Europe and North America, with prominent bankers such as David Rockefeller, as well as European royalty, such as the Dutch royal family, who are the largest shareholders in Royal Dutch Shell, whose CEO attends every meeting. This group of roughly 130 elites meets every year in secret to discuss and debate global affairs, and to set general goals and undertake broad agendas at various meetings. The group was initially formed to promote European integration. The 1956 meeting discussed European integration and a common currency. In fact, the current Chairman of the Bilderberg Group told European media last year that the euro was debated at the Bilderberg Group.
               
  In 1973, David Rockefeller, Chairman and CEO of Chase Manhattan Bank, Chairman of the Council on Foreign Relations and a member of the Steering Committee of the Blderberg Group, formed the Trilateral Commission with CFR academic Zbigniew Brzezinski.  That same year, the oil price shocks created a wealth of oil money, which was discussed at that years Bilderberg meeting 5 months prior to the oil shocks, and the money was funneled through western banks, which loaned it to ‘third world’ nations desperately in need of loans to finance industrialization.
               
  When Jimmy Carter became President in 1977, he appointed over two dozen members of the Trilateral Commission into his cabinet, including himself, and of course, Zbigniew Brzezinski, who was his National Security Adviser. In 1979, Carter appointed David Rockefeller’s former aide and friend, Paul Volcker, who had held various positions at the Federal Reserve Bank of New York and the U.S. Treasury Department, and who also happened to be a member of the Trilateral Commission, as Chairman of the Federal Reserve. When another oil shock took place in 1979, Volcker decided to raise interest rates from 2% in the late 70s, to 18% in the early 80s. The effect this had was that the countries of the developing world suddenly had to pay enormous interest on their loans, and in 1982, Mexico announced it could no longer afford to pay its interest, and it defaulted on its debt, which set off the 1980s debt crisis – collapsing nations in debt across Latin America, Africa and parts of Asia.
               
  It was the IMF and the World Bank came to the ‘assistance’ of the Third World with their ‘structural adjustment programs’, which forced countries seeking assistance to privatize all state owned industries and resources, devalue their currencies, liberalize their economies, dismantle health, education and social services; ultimately resulting in the re-colonization of the ‘Third World’ as Western corporations and banks bought all their assets and resources, and ultimately created the conditions of social genocide, with the spread of mass poverty, and the emergence of corrupt national elites who were subservient to the interests of Western elites. The people in these nations would protest, riot and rebel, and the states would clamp down with the police and military.
               
  In the West, corporations and banks saw rapid, record-breaking profits. This was the era in which the term ‘globalization’ emerged. While profits soared, wages for people in the West did not. Thus, to consume in an economy in which prices were rising, people had to go into debt. This is why this era marked the rise of credit cards fueling consumption, and the middle class became a class based entirely on debt.
               
  In the 1990s, the ‘new world order’ was born, with America ruling the global economy, free trade agreements began integrating regional and global markets for the benefit of global banks and corporations, and speculation dominated the economy.  
               
  The global economic crisis arose as a result of decades of global imperialism – known recently as ‘globalization’ – and the reckless growth of– speculation, derivatives and an explosion of debt. As the economic crisis spread, nations of the world, particularly the United States, bailed out the major banks (which should have been made to fail and crumble under their own corruption and greed), and now the West has essentially privatized profits for the banks, and socialized the risk. In other words, the nations bought the debt from the banks, and now the people have to pay for it. The people, however, are immersed in their own personal debt to such degrees that today, the average Canadian is $39,000 in debt, and students are graduating into a jobless market with tens to hundreds of thousands of dollars of student debt that they will never repay. Hence, we are now faced with a global debt crisis.     
            
  To manage the economic crisis, the G20 was established as the major international forum for cooperation among the 20 major economies of the world, including the major developing – or emerging – economies, such as India, Brazil, South Africa and China. At the onset of the financial crisis, China and Russia’s central banks began calling for the establishment of a global currency to replace the U.S. dollar as the world reserve currency. This proposal was backed by the UN and the IMF. It should be noted, however, that the Chinese and Russian central banks cooperate with the Western central banks through the Bank for International Settlements – which the President of the European Central Bank, Jean-Claude Trichet, recently said was the principle forum for “governance of central bank cooperation” and that the G20 is “the prime group for global economic governance.” In 2009, the IMF stated that the BIS “is the central and the oldest focal point for coordination of global governance arrangements.” The President of the European Union, appointed to the position after attending a Bilderberg meeting, declared 2009 as the “first year of global governance.” The 2009 Bilderberg meeting reported on the desire to create a global treasury, or global central bank, to manage the world economy. In 2009, prior to the Bilderberg meeting in fact, the G20 set in motion plans to make the IMF a global central bank of sorts, issuing and even printing its own currency – called Special Drawing Rights (SDRs) – which is valued against a basket of currencies. In May of 2010, the IMF Managing Director stated that “crisis is an opportunity,” and while Special Drawing Rights are a step in the right direction, ultimately what is needed is “a new global currency issued by a global central bank, with robust governance and institutional features.” Thus, we see the emergence of a process towards the formation of a global central bank and a global currency, totally unaccountable to any nation or people, and totally controlled by global banking interests.
               
  In 2010, Greece was plunged into a debt crisis, a crisis which is now spreading across Europe, to the U.K. and eventually to Japan and the United States. If we look at Greece, we see the nature of the global debt crisis. The debt is owed to major European and American banks. To pay the interest on the debt, Greece had to get a loan from the European Central Bank and the IMF, which forced the country to impose ‘fiscal austerity’ measures as a condition for the loans, pressuring Greece to commit social genocide. Meanwhile, the major banks of America and Europe speculate against the Greek debt, further plunging the country into economic and social crisis. The loan is granted, to pay the interest, yet simply has the effect of adding to the overall debt, as a new loan is new debt. Thus, Greece is caught in the same debt trap that re-colonized the Third World.
               
  At the recent G20 meeting in Toronto, the major nations of the world agreed to impose fiscal austerity – or in other words, commit social genocide – within their nations, in a veritable global structural adjustment program. So now we will see the beginnings of the Great Global Debt Depression, in which major western and global nations cut social spending, create mass unemployment by dismantling health, education, and social services. Further, state infrastructure – such as roads, bridges, airports, ports, railways, prisons, hospitals, electric transmission lines and water – will be privatized, so that global corporations and banks will own the entirely of national assets. Simultaneously, of course, taxes will be raised dramatically to levels never before seen. The BIS said that interest rates should rise at the same time, meaning that interest payments on debt will dramatically increase at both the national and individual level, forcing governments to turn to the IMF for loans – likely in the form of its new global reserve currency – to simply pay the interest, and will thus be absorbing more debt. Simultaneously, of course, the middle class will in effect have its debts called in, and since the middle class exists only as an illusion, the illusion will vanish.
               
  Already, towns, cities, and states across America are resorting to drastic actions to reduce their debts, such as closing fire stations, scaling back trash collection, turning off street lights, ending bus services and public transportation, cutting back on library hours or closing them altogether, school districts cutting down the school day, week or year. Simultaneously, this is occurring with a dramatic increase in the rate of privatizations or “public-private partnerships” in which even libraries are being privatized.
               
  No wonder then, that this month, the Managing Director of the IMF warned that America and Europe, in the midst of the worst jobs crisis since the Great Depression, face an “explosion of social unrest.” Just yesterday, Europe experienced a wave of mass protests and social unrest in opposition to ‘austerity measures’, with a general strike in Spain involving millions of people, and a march on the EU headquarters in Brussels of nearly 100,000 people. As social unrest spreads, governments will likely react – as we saw in the case of the G20 in Toronto – with oppressive police state measures. Here, we see the true relevance of the emergence of ‘Homeland Security States’, designed not to protect people from terrorists, but to protect the powerful from the people.
    
  So while things have never seemed quite so bleak, there is a dim and growing beacon of hope, in what Zbigniew Brzezinski has termed as the greatest threat to elite interests everywhere – the ‘global political awakening’. The global political awakening is representative of the fact that for the first time in all of human history, mankind is politically awakened and stirring, activated and aware, and that generally – as Zbigniew Brzezinski explains – generally is aware of global inequalities, exploitation, and disrespect. This awakening is largely the result of the information revolution – thus revealing the contradictory nature of the globalization project – as while it globalizes power and oppression, so too does it globalize awareness and opposition. This awakening is the greatest threat to entrenched elite interests everywhere. The awakening, while having taken root in the global south – already long subjected to exploitation and devastation – is now stirring in the west, and will grow as the economy crumbles. As the middle classes realize their consumption was an illusion of wealth, they will seek answers and demand true change, not the Wall Street packaged ‘brand-name’ change of Obama Inc., but true, inspired, and empowering change.

end

BS Alert: US Treasury Chief Timothy Geithner Says America Will Not Engage in Dollar Devaluation!

Can you smell it??

• If you believe what bankster Tim Geithner says, I have a bungalow on Jupiter I want to sell to you. It is sea front property and you can swim with Jovian dolphins.
   
• America’s debts are well over US$100T when you include in Social Security, Medicare, bankrupt pension funds, state obligations….. The US$13T bandied about as the national debt is not a true reflection of the deep shit the country is in. These debts and obligations will never be paid back. Where do you get the money to finance or pay off these debts? You do economic hocus-pocus, Quantitative Easing, creating money out of thin air. Obviously, it is currency devaluation. The USD is toast.
   
• The populace will realize this and there will be a currency event: the overnight collapse in the USD. Hyperinflation will race around the world as everyone dump USD for hard assets. A global monetary crisis is inevitable! Got Gold yet?
    
  US Treasury chief Timothy Geithner says America will not engage in dollar devaluation
  Timothy Geithner, the US Treasury Secretary, said the United States would not engage in a currency war by devaluing the dollar to boost the country’s flagging economy.
    
  “It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to [be] competitive,” he said. “It is not a viable, feasible strategy.” The dollar strengthened against a basket of currencies after his comments to business leader in California’s Silicon Valley on Monday, including the yen, euro and sterling.
    
  This is the first time since February that Mr Geithner – who helped create the “strong dollar mantra” in the 1990s – has broken his silence on the weakening US currency. It also comes ahead of this weekend’s meeting of finance leaders from the Group of 20 wealthy and emerging nations in South Korea, which is expected to be overshadowed by a dispute between China and the US over the valuation of the yuan and growing fears of protectionist currency wars.
   
  The weak dollar has already led export-focused Japan to launch an unsuccessful intervention to strengthen the yen, while Brazil has warned that an “international currency war” was hurting his country’s competitiveness – a weak dollar causes more funds to flow into Brazil and other emerging market economies, pushing up currencies.
   
  The dollar has fallen 7pc since late August when Fed chairman Ben Bernanke hinted at the possibility of fresh stimulus to stoke the world’s largest economy. Answering audience questions before the Commonwealth Club of California in Palo Alto, he said the US needed to “work hard to preserve confidence in the strong dollar.”
   
  On Friday, the dollar index hit a 10-month low against a basket of major currencies, while the greenback has been plumbing fresh 15-year lows against Japan’s yen.
   
  Brazil on Monday moved to cool a strong rally in its currency by raising taxes for foreigners buying local bonds and trading in foreign exchange derivatives. Finance Minister Guido Mantega said the move was aimed at reducing foreign investment into Brazil, and he urged other countries to take coordinated action against the weak dollar.
   
  Argentina’s Minister of Economy and Public Finance Amado Boudou on Monday called on developed nations to focus on creating jobs rather than actions that weaken their currencies, saying a “true currency war” was underway.
   
  However, the US say the problem is China’s restrictive exchange rate regime, which until recently had kept the yuan largely pegged to the dollar. It wants China to allow the value of the yuan to rise.

end

South Korea’s Central Bank Looks to Gold !

• More and more central banks are waking up to the fact that the USD is toast! As much as 60% of foreign exchange held by central banks are in USD. Imagine when they start to dispose of their USD holdings. What is the choice? Can you buy wheat or corn and store them as money? Can you accumulate copper and iron as substitute for fiat currencies? Imagine the amount of warehouses you have to build. Think about the decay of agricultural commodities, the rats and mould, fungus problem. What is the choice? Can you use copper or iron as money as settlement for international trade? What is the choice?
   
• It is a matter of when the world begins to dump its USD holdings for gold. China alone with its US$1.5T will cause the price of gold to go to the moon. Throughout 5000+ years of history gold has been money. It was only when Nixon defaulted on US obligations and delinked the USD from gold that currencies around the world became funny money. The world will head back to a gold standard sooner or later.
    
  South Korea’s central bank looks to gold
  South Korea, holder of the world’s fifth-biggest foreign exchange reserves, is considering expanding its small holdings of gold to diversify its dollar-heavy portfolio. “We need to give careful consideration to the matter of increasing gold volumes in the foreign reserves,” Kim Choong-soo, governor of South Korea’s central bank, told a parliamentary committee on Monday.
   
  Such a move would have a powerfully bullish effect on the gold market. With just 14 tonnes of gold — or 0.2 per cent of $290 billion reserves — Seoul is one of the smallest holders of gold among large economies. The world average is about 10 per cent, according to the World Gold Council, while countries such as the US, Germany, and France hold well over 50 per cent of their reserves in gold.
    
  South Korea would join other Asian countries including China, India, Thailand, and Bangladesh in adding gold to its reserves. With emerging market countries buying gold and central banks in Europe halting their programmes of sales, central banks are set to become net buyers of gold this year for the first time since 1988, according to GFMS, the precious metals consultancy. 
   
  That trend is one of the most important changes in the gold market in recent history, and has helped drive the metal’s rally to a series of fresh highs. On Thursday it touched $1,387.10 a troy ounce, an all-time nominal record.
   
  South Korea’s central bank stressed any moves would have to be “cautious” and “prudent” because of the high gold price. One person familiar with the Bank of Korea’s stance on the metal said it was “receptive to the idea” of buying gold but stressed that there remained “differences of views” within the central bank.
   
  Historically, Seoul has favoured Treasury bills over commodities because they are more liquid and can be used as a weapon to control the notoriously volatile won. However, this reliance on the dollar, which makes up 63 per cent of reserves, has attracted widening criticism in recent years as commodity prices have soared. The rest of Seoul’s reserves are in euros, sterling, and yen.
   
  Lee Ji-pyeong, senior researcher at the LG Economic Research Institute, said South Korea should have started building up gold stocks last year. Increasing its holdings now would be difficult but worthwhile, he said.
   
  “The bank is likely to remain hesitant, waiting for gold prices to come down, which is unlikely,” he said. “Although gold prices have risen sharply in recent months, the upward trend is likely to continue for now as the dollar is likely to remain weak, with Ben Bernanke talking about additional easing measures and central banks worldwide likely to keep buying gold amid ultra-low interest rates.”
   
  Another issue for central banks looking to diversify into gold is the size of the market. Relative to the size of foreign exchange reserves, the gold market is tiny, meaning any large purchases could drive up the price. An increase in Seoul’s gold holdings of just a few percentage points would translate into 100-200 tonnes of purchases — a significant additional source of demand compared to annual production from mines of just 2,500 tonnes.

end

Silver Shipments From China, Biggest Exporter, May Plunge by 40% This Year!

• This is very bullish news for silver investors. Industries can do without gold. Even for jewellery, you can use platinum. But this is not the case for silver. All electronics gadget need silver. At current prices a notebook uses about US$1-2 of silver, each handphone/IPhone uses about US$0.50-1.00 of silver. Silver is a must for alot of batteries and even the newer generation of batteries for electric cars. Silver has many new applications as a biocide in the healthcare industry. The industrial applications of silver are enormous. Investment demand is just starting to rise.
    
  Silver Shipments From China, Biggest Exporter, May Plunge by 40% This Year
  Silver exports from China, the world’s largest, may drop about 40 percent this year as domestic demand from industry and investors climbs, according to Beijing Antaike Information Development Co.
   
  Shipments may decline from about 3,500 metric tons in 2009, said Feng Juncong, chief analyst at the state-owned Antaike, without providing a specific forecast. Customs data show exports plunged almost 60 percent to 970 tons in the first eight months. Cancellation of an export rebate in 2008 is also hurting shipments, she said.
   
  Reduced exports may bolster prices that are trading near a 30-year high on speculation that governments worldwide will take further steps to stimulate their economies, weakening currencies and increasing demand for assets that are a store of value. China, the third-largest producer after Peru and Mexico, revoked export rebates in August 2008 to curb use of natural resources.
   
  “There is huge demand in China this year and that has affected exports, which were already hurt after the tax rebate was abolished,” said Ng Cheng Thye, head of bullion at Standard Bank Asia. “The demand is coming from all areas, including jewelry, investment and fabrication and this has resulted in a physical market shortage in the Far East.”
   
  The metal for immediate delivery touched $24.92 an ounce on Oct. 14, the highest price since September 1980, and traded at $24.2750 at 2:28 p.m. in Singapore. Industrial applications for silver, including electrical conductors and batteries, represent about half global demand.
   
  Silver Rally
  “China may sharply reduce its silver exports this year following the scrapping of the rebate and as domestic demand picked up amid expectations for higher inflation,” Feng said. This year’s 5,100-ton quota is unlikely to be fully used, she said.
   
  Silver has rallied 44 percent this year, outperforming gold and copper. In the short term, prices will be between $20.50 and $25.50, GFMS Chairman Philip Klapwijk said on Oct. 16. “Silver is likely nearing a top now, and that it has more downside in the short term than upside,” he said. “But we remain bullish in the long term.”
   
  China’s silver production, including mined, by-product output and recycled material, grew by an average 14.9 percent every year in the 20 years since 1990 to 10,348 tons in 2009, Feng said. Growth was mainly because of the fast-growing production of lead, zinc and copper, which generates silver as a by-product, Feng said.
   
  Output Drops
  The country’s silver output dropped 1.9 percent in the first eight months to 7,445 tons, she said. About 60 percent of China’s silver mined output is in the form of by-product of base metals, according to Antaike estimates. An expected drop in lead and zinc concentrate supplies will affect domestic smelter production, weighing on China’s silver output growth, she added.
   
  “There are Chinese investors now hoarding silver, along with other resources, amid anticipation of higher inflation,” Feng said. “China is short of resources so these investors believe the metals will be more valuable in the future.”

end