Socio-Economics History Blog

Socio-Economics & History Commentary

Chinese Silver Demand Surges Incredible Four Fold in Just One Year!

Table Courtesy of Mitsui.

  • Do not be too concerned with the current take down of gold and silver prices on the Comex. They are just the usual manipulation by the bullion banksters. They are fighting a losing battle. It is basically a retrograde action to get out as fast as they can before the gold and silver price explosion upwards!
      
    Chinese Silver Demand Surges Incredible Four Fold in Just One Year
    The fact that silver is again in backwardation at the front end of the curve suggests that tightness in the physical bullion market continues and may even be deepening. Indeed, the massive increase in silver bullion demand from China (confirmed overnight – see above) suggests that silver’s bull market remains very much intact despite becoming overvalued in the short term towards the end of 2010. 
     
    Surging inflation in China, India, wider Asia and much of the world is of course positive for gold and silver as it will likely lead to an even greater appetite for the precious metals in order to protect against the ravages of inflation and the further depreciation of paper currencies.
     
    A theme we have written about for many years is China’s growing importance to global financial markets and the global economy. As the most populous and largest creditor nation in the world, China’s influence and power continues to grow. Chinese power is being seen in currency, bond, commodity and other financial markets.
     
    It is particularly seen in China’s huge appetite for precious metals and this is only being appreciated gradually. Many in western markets and finance continue to not realise the profound changes and long term ramifications of China’s emergence as a global superpower. The world has changed and we are not reverting to the financial, economic and geopolitical conditions of the late 20th Century. 
      
    China’s influence and massive appetite for precious metals is important both from a monetary and a geopolitical perspective. We warned of this some years ago – specifically writing about how the Chinese would gradually attempt to position the yuan as the global versus reserve currency, thereby replacing the petrodollar. We also wrote how the Chinese could use precious metals, and gold in particular, as a geopolitical weapon against the US and the west. Recently analysts, including the respected Jim Rikards, have eloquently outlined this real and growing risk.
     
    China’s impact on the gold and silver markets will likely have ramifications for the western monetary and financial system and that is why China’s impact on the silver market is increasingly important. This is something we have wrote about for some time and one of the important factors driving silver’s bull market.

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January 22, 2011 - Posted by | Economics | , ,

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