Sri has several time put forward that should China attempt to make off with hard assets ( land, buildings, infrastructure) that the US had measures (taxes, policy) to make it painful for them to get back out.  Mostly, I had no response to this.. to be sure a smart US government could identify and head off such moves... or could they?

One would suspect that the $30 billion planned yearly trade amounts are severely under stated and actual trade amounts will be increasingly closer to $100 billion or possibly $1,000 billion or more, just as China never accurately discloses their gold holdings.  The Chinese people are simply sharp poker players, quiet and discreet, not proud, arrogant or ignorant to show their cards.  If they would such a play would inevitably raise even more anger and ire of the U.S. Fed, IMF and the World Banks and start a war overnight.

China also has figured out the Fed’s plan when Ben (Buzz Light Year) Bernanke instituted “Q-Infinity and Beyond” and the newly hinted “Q-Finity and Not Beyond”.  They have come to realize that either they would be paid with worthless dollars or quite possibly not at all.  When interest rates inevitably rise and the U.S. can no longer afford to pay back our “Chinese credit card” the U.S. will default on their bond debt repayments.  

China also has been amassing gold reserves quietly and only admits to owning 1000 tons. Most assuredly they now possess some ten times that amount or even more than 10,000 tons.  In just the 1st quarter of 2013 500 tons of gold was sold to China.  Gold is their insurance, an alternative to the U.S. dollar, and quite simply their back up plan.


Another part of the blog-
Now India and Turkey act as gold intermediary agents with established banking entities and will converge with the Chinese Yuan Swaps already in place.  These countries understand gold to be real money and an exchange for goods, services as well as an artistic art form to adorn themselves in as it has been for centuries.   They simply have no faith in the dollar as a store of value.

Now to be sure- this is gold hawker using scare tactics to drum up sales. I am not convinced of complete legitimacy. But however its spun, the fundamentals are mostly in place.

Link: http://www.gold-eagle.com/article/china-declares-war-us-and-gold-insurance

Come to think of it... what you may want to consider (Sri) is not that you are wrong... but that you misidentify what leverage India used... was it policy/tax or was it their ability to cover their debts (with physical assets, savings) versus the complete inability of the US to do so.

anyway food for thought...

Yea yea yea ... they will all now eat gold.
Same sheite different flavor.

India and china are big gold hoarders cos they make jewelry out of it.
Gold is almost as worthless as paper if you're starving.

I am getting real tired of shovelling the same sheiete over and over again every few months ...

They may convert USD to gold on the backs of other countries ...
We will not pay them in gold.
They can have a few million tons of gold .. .will make no difference.
They can insist we pay them in gold ... and we can watch as they rot with the garbage they have manufactured ...

In the real world, a US collapse makes gold worth a lot more than the USD. That is assuming nothing else happens ... In case of a world collapse gold and USD are completely worthless.

Like I said, same sheite different month, and the srinath tirelessly shovels again ...

Remember the srinath is from India, where its legal to own lots and lots of gold, and people do own it in all forms. jewelry, scraps, biscuits etc etc etc ... You think you're gold bugs ... I'd like to introduce you to a billion of my countrymen.

Cool.
Srinath.

In the scenarios that may unfold ... you have a million twists and turns that will have to go just right for gold to be worth something and the USD not ... and if you have a situation where some turns are not done the right way ... it can easily invert ...

Re construction doesn't atuomagically mean gold over paper ...

In the 95-2000 tech boom - the 2000's version of reconstruction, you had gold dropping ... in fact 1990-2000 - I cant pull that far back ... but in jan 95 gold started @ 381 and ended 2000 @ 275.

Economic expansion = gold drops.
Metals (Cu, Al, Fe) may rise ... but gold isn't likely to in the case of physical construction ...

Sorry man, your hope ... dont translate to reality.

In the "reconstruction" phase ... you might want to own stock in a construction company ... Like Centex, Blythe, etc etc. That will outstrip gold and USD combined.

Cool.
Srinath.

Gold has value when India and china expand ... cos Injuns and chinese wear it, pay dowry with it, etc etc etc ...

India and china expand because we are buying crap from them ...

We buy crap from em cos $$$ is strong ...

Change the last sentence and the pack of cards collapses ...

Cool.
Srinath.