Is China The Next Superpower?

By Peter Costa

With such an enormous decline in the global economy I can’t help but notice the consistent growth occurring in China.

China has expanded at an astounding rate of 7.9% announced recently by the government and has inflation down 1.1% from a year ago. According to many news publications China is very worried about emerging inflation in the global economy but more importantly the United States. With over $2.13 trillion dollars of foreign reserves at least $763 billion is pure US debt.

How is China combating the plummeting US economy more importantly the devaluation of our currency? Well let’s take a look… Since 2003 China has picked up 600 tons of gold without telling anyone and has grown their reserves 75% since then. With the IMF frantically selling gold off into the global economy China has recently purposed to purchase the whole 403 metric tons they plan to sell this time around. In addition China has expressed its interest in purchasing $80 billion in gold which amounts to about 2600 tons of gold. With the IMF being one of the largest holders of gold, China and India have teamed up and publicly pressed the IMF to sell its entire 3200 ton reserve. From 2002 to 2009 China has added over 1,054 tons of gold to its already plentiful reserve and will be rapidly expanding that number in the coming times.

Is this increasing gold reserve a reaction to the current state of the US currency? Li Lianzhong, head of the economic bureau of the Communist Party of China Central Committee’s Policy Research Center, came in a statement recently saying ‘Should we buy gold or US Treasuries?’ he asked, ‘The US is printing dollars on a massive scale, and in view of that trend, according to the laws of economics, there is no doubt that the dollar will fall. So gold should be a better choice.’ With China shying away from the US currency we can expect a global chain reaction. Ronald Fricke president of Regal Assets says ‘With the IMF stating recently that the outlook for the US is even bleaker then the world as a whole we can guarantee that US Treasuries won’t be a popular purchase in the global economy for awhile’

China is diversifying outside of the US currency and has recently provided $45 billion to Russia, Brazil, Venezuela and Kazakhstan in exchange for long-term crude supply deals. With such a plentiful amount of currency in circulation what is China purposing next? At the recent G-20 summit in London China was calling for a gold linked currency to replace the dominant dollar and become the new world’s reserve currency. With such bold moves and propositions it really makes one think is China really becoming the next global superpower? Truly only time will tell but in the meantime we should all be learning from China and should purchase some gold of our own. If you are a savvy investor or just someone looking to preserve what money you have make sure you visit RegalAssets.com to get the best prices in precious metals.

 Print This Post

Related posts:

1. China Wants to Overpower The U.S.
2. 3 Reasons Why Gold Could Hit $1300
3. The IMF Is Driving Up Gold Prices
4. Where Gold Prices Will Be Before Year End
5. Recession Sale