torsdag 17 september 2009

Kinesisk guldhysteri

Ur den utmärkta bloggen/nyhetsbrevet The Sovereign man kommer följande mycket intressanta rapport från Mittens Rike. Om de intensiva ryktena om ett par amerikanska investmentbankers rekordstora short positioner i guld och silver, ja då gissar jag att sådant här får dom på mycket dåligt humör. Osolidariskt av kamraterna...

Gold is quickly reaching the mania phase in China, and there are clear signs of it on the ground.

About a month ago, we reported that for the first time ever, the Chinese government is promoting gold and silver as investments. And by "promoting," we meant cramming it down people's throats. We knew this was ground-breaking news at the time-- a clear indication of long-term demand growth, as well as a sign that the government will be accepting higher inflation in the future.

Ironically, this story was little noticed in the gold industry at the time, mostly because the information was only being circulated in China (in Chinese, for that matter). Fortunately, my friend and China insider Christine Verone was able to get me the scoop, and we ran it here first.Since that report, three things have happened;

First- the mainstream media has latched on to the story about Chinese gold... Forbes, Moneyweek, Reuters, the blogosphere; it's out there now, and adding a bit of extra buzz to the gold market.

Second- the government has stepped up its promotional campaign, and Chinese consumers have responded on cue. Gold demand has grown dramatically just this year, particularly as savvy local investors are starting to view Chinese stocks suspiciously.

You can buy gold in China at any bank-- even tiny banks in tier-3 cities sell gold. More importantly, however, the government is setting up official Chinese Mint stores all over the country.

On the inside, they look like jewelry shops-- armed guards, glass viewing cases, etc. But instead of diamond crusted earrings and white star sapphires, you see bars. Lots of bars.

The government mints bars in sizes ranging from 5 grams (which are so tiny they're actually cute) to 1 kilogram. The prices are updated instantly-- they have a Bloomberg screen which tracks the spot price, generally indexed to the Renminbi price in Shanghai rather than New York or London (another sign of Chinese financial independence).

The bars are all serialized and 9999 purity, the same as you would get from Switzerland. They are also certified by the gold exchange, which validates the quality. There is no tax, and the premium runs 10 renminbi per gram, or roughly $30 (US) per ounce.

We went into several stores and saw Chinese people buying like crazy... all with cash. The most popular denominations were 10 grams and 50 grams-- and I'm surprised the mint shops didn't sell out at the rate those bars were flying off the shelf.

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