Commodity-Backed Currencies? China Buys Huge Copper Mine; Russia Onshores Largest Gold Miner
Around the industry I have been hearing of wealthy Chinese investors looking to buy up mines or properties with their excess cash. I think this will become a much bigger story in a few years as people will start waking up and see that major hard asset production is dominated by the east. As these countries continue to buy physical metals on the open market the move to own producing mines simply makes sense. These countries know that if a currency crisis comes the countries that will come out ahead will be those that have physical metals as well as those that control future production.
There is something to be said for China entering in an agreement to buy Glencore Xstrata’s copper mine in Peru for $6 billion … in all cash! Can you say diversifying away from the US dollar.
Bird…I have being reading all your comments since you came to this site….& for the life of me , I can not understand why you are so bullish the US dollar….IMO its days as the worlds reserve currency are numbered…..Now tell me why I am wrong.
Yes, good question Tony. I watch it for trading opportunities mostly so I have gotten intimate with its daily ups and downs in a way most here probably don’t. There is a consensus amongst the gold community that it might (must) crash one day. That could be right but it is not happening in the here and now. Actually, if you read my post yesterday regarding devaluation you will know that it is my belief the dollar will be deliberately shaved simply because the level of public debt being carried is unsustainable. It is astronomical really relative to just about everything you measure it against whether GDP or tax revenues or demographic profiles. I had long been in the camp that felt a continuous level of modest inflation would eat away at the problem and eventually growth would kick in thus making the debt less of a concern. The age profile of the country and the fact that the debt keeps growing so rapidly have changed my mind though and increased the certainty that more dramatic outcomes lie ahead. By the way, most of the time I am talking about the dollar I am referring to the trade weighted dollar and how it is referenced against the other reserve currencies. This is not exactly the same thing as what the purchasing power of the dollar is in America itself.
B..Thanks for the reply.
Not smoking anything…or drinking Koolaid (which was invented in Nebraska BTW). BRICS has declared war on the US Dollar and whatever games the US Fed and other Western central banks play, they can’t keep it afloat forever. The IMF has proposed a revaluation of currencies and the US Dollar is not listed as the peg anymore.
The idea that they are buying mines to shut them down is intriquing, but is a short term play with the problems in their banking industry. I’m still in the camp that they want out of US Dollars in the long run. They want something tangible when they take the US Dollar down and out.
Gotta say…I’m still in the physical wealth storage camp rather than the electronic measurement camp. Don’t trust communists or socialist whether in Bejing, Moscow, or Washington DC.
CJV……I agree with everything you just typed , Anybody with have brain can see that the west’s days are numbered…..The sun rise’s in the east.
Ditto, I`m with Dr. Jim Willie, the Dollar`s days are numbered. Countries using their paper currencies on the world chess board to create an illusion, the magician can believe in, works. There is no work, its just smoke and mirrors at work. Endgame is a come`n.
Typo…..HALF…not have….Man these old fingers are not as accurate as they used to be.
China is a sovereign state. They have substantial dollar holdings. I am not sure we need be too surprised they paid for a mine all cash even if it was priced at 6 billion. What would have been a surprise is if the Chinese government had financed it!
By the way, i am reading a lot of articles on other gold sites that keep talking about dollar weakness. I have no idea what those guys are smoking. The dollar is in a bounce and it is a good buy in my opinion as it will be rising for some time. Is it just the gold agenda that wants the buck to fall or are those writers drinking their own Koolaid.
Crazy how we can look at the same charts and come to such different conclusions. This is the problem built into the thinking of those with a strong negative bias against the currency. Maybe they suppose that by talking the dollar down it will come true. Baffling.