Hello Joe, It is unlikely that it would change anything on the currency situation, really. The Chinese (Japanese, Koreans, Taiwanese, ASEAN, South Africa -take your pick) are interested in a weak currency in dollar terms and will continue to buy all dollars as soon as they enter the country (outright if the currency is pegged, China, Malaysia, etc. or through the market if it isn't, Japan, South Africa, etc.).
This keeps their currencies low and the US dollar high. But it also means that it keeps gold under some pressure because they can't use the dollars to buy gold with it. Instead they have to buy something that keeps the dollars in dollars, which is, of course US bonds, bills, even mutual funds and stocks. One of the things the press was never too keen on saying is that the current 'interim bull' on Wall Street is almost entirely foreign funded. The reason for that is that Asia doesn't have a choice (yet). They can only invest dollar income into dollar denominated assets, paper for paper if you will. Of course, China is the most striking example for this, but it holds true in many other countries as well. A strong dollar keeps things cheap in Asia. A falling dollar would be a disaster, because in the end, it would increase domestic prices in China as well. A market were the consumer base is still being built. Yes, many Chinese are likely to buy 'some' gold. But if they want the actual metal and there is a lot of them, then things become tricky, 'cause it ain't there and China can't buy it in large quantities because they would use dollars for that, wich would increase the dollar supply internationally, which would cause the dollar to drop, which... you get the picture, unless of course, they barter it from Malaysia, South Africa or Russia... Cheers, Robert. budget & privacy website hosting http://www.cyberica.net e-commerce & e-business services http://www.cyfrocash.net budget domain registrations http://www.u2planet.com --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
