Gold News

China "Should Buy Gold to Hedge Against Debt Crises"

CHINA'S central bank should Buy Gold as part of a strategy to defend the value of its reserves, according to Zhang Tingbin, founder of leading Chinese financial consultancy CNYUAN and author of the book Gold Defends China.

In an article for China Daily entitled 'Time to boost gold reserves', Zhang argues that there is a "compelling reason for China to increase its gold investments", and that China should Buy Gold "to hedge sovereign debt crisis" and avoid the kind of losses suffered by Chinese reserves in the recent past.

"After the US subprime crisis," writes Zhang, "it was reported that China incurred losses of over $450 billion from worthless Fannie Mae and Freddie Mac securities."

Zhang fears that the Eurozone crisis could lead to a similar outcome.

"Debt risks are increasing in Europe. The 600 billion Euros worth of debt purchased by China in Europe has started to lose its shine, while in the Greek debt restructuring the losses were around 30 billion Euros."

China's central bank, the People's Bank of China, last year co-published a report entitled 'Opinions on Promoting the Development of the Gold Market' – which looked at creating new channels for people in China to Buy Gold. 

Want to Buy Gold at the lowest possible price? See how BullionVault could dramatically cut your costs...

See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals