Western central banks and governments have been disparaging
gold-as-currency for the most of the past century. Their message -- that
gold is a 'barbarous relic' (Keynes) -- would be more persuasive if they
had been looking after their own national currencies more carefully.
Yesterday's news that the Hong Kong Gold Exchange has gone electronic and
that Chinese investors, for the first time, will now be able to buy gold
bars in all sizes from 10 grams to 1 kilo directly in their own national
currency, the renminbi, means that Hong Kong will almost certainly overtake
London and New York as the principal gold trading centre in the world
within the next 12 months. Shanghai is now opening a new gold futures
market in terms of the US dollar. At the same time, most of the leading
Western (non-central) banks, to the discomfiture of our governments, are
helping China to multiply the use of the renminbi into a major world
trading currency. Russia has already been roped in and Brazil will follow
soon. China is now giving us a triad of warnings that unless Western
governments shelve their printing-press-backed currencies -- particularly
the US dollar and the European euro -- and get onto a more secure
foundation, then the rest of the world will increasingly pass us by.
Keith
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2010/12/
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