pimpjui

China Urges Citizens to Buy Gold and Silver

The comments about the eventual chinese currency peg removals make sense. The only low-cost, low risk hedge is gold. About the part of encouraging chinese citizens to buy physical; that is pretty much a ponzi scheme. Step 1: the governemnt is buying gold or has already bought lots of it. Step 2: Get the largest pool of retail suckers in the world to continue to bid up the price by encouraging them to buy it with their savings. Step 3: devalue the chinese currency. Step 4: conficate chinese citizen's gold (sort of like how the USA did it in the 1930's. This will occur probably in conjunction with some economic crisis in the USA, where the chinese government can blame the barbarians for destroying their wealth; ditto for the US governemnt....they can blame the chinese for something that will require a huge government devaluation e.g. military invasion is the most probable at the moment...

Revisiting the Weimar Gold and Silver Ratio

One does not buy silver or gold as a store of wealth if he thinks that infrastructure around him (e.g. banking system, political system, legal system, etc) is stable. It is only when these systems fail, that physical gold becomes valuable as money. So if you really think the system is going to fail, then it is pointless to buy non-physical gold. These paper accounts you mentioned will vanish upon the failure of the legal system. When systems fail, particularly the legal system, self-defense becomes a requirement for holding gold. So you should first buy lots of guns, food, and a safe place to hunker down. Then, if you have anything left, buy gold, and protect it with the guns you just bought.