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Shocking Breakdown of China’s Foreign Reserves is Bullish for Gold

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Shocking Breakdown of China’s Foreign Reserves is Bullish for Gold

I want to focus on the composition of China’s foreign reserves, explain why the liquid portion of the reserves may be much smaller than widely believed, and how that situation is bearish for RMB and bullish for gold.

According to Wikipedia:

“The foreign-exchange reserves of China are the People’s Republic of China holdings of cash, bank deposits, bonds, and other financial assets denominated in currencies other than China’s national currency (renminbi). At the end of January 2016, the foreign-exchange reserves of China stood at US$3.23 trillion. The management of foreign-exchange reserves is governed by the State Administration of Foreign Exchange and the People’s Bank of China. The composition of foreign-exchange reserves is a state secret in China.“

We managed to retrieve the following financial data from the China State Administration of Foreign Exchange (SAFE) website:

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David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?

 

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