I just read an article today that states that the Chinese have bought more gold in the last three months (July-October) then in all of 2010. A few things come to mind about this. Have they finally awakened to the fact that we aren’t going to repay them and are dumping their US dollars into something of value? Some may claim that they’re just gearing up for the Chinese New Year, which typically is a bullish season for gold. If you’ve read my Aftershock review though you’ll see that their housing market is SEVERELY in a bubble right now and the way it got there was through government and excess (inflation via printing).
Well the Chinese citizens are the ones on the ground and they are the ones that feel the effect of rising prices through inflation and they would be the ones protecting themselves from inflation not only domestically, but abroad as well through the purchase of gold and silver, which aren’t devalued when currency loses its value through inflation.
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