Hi Jim,
I found the reference to silver a bit surprising as I can’t recall hearing that chatter emanating out of China before.
Silver has been money in China historically though as you know… The last paragraph of the second article is interesting too:
"The CRI report said that China urgently needs to improve the formation mechanism of domestic silver price and seek appropriate trade modes to maintain values and avoid risks. It will be the general trend to introduce silver futures."
All the best,
CIGA Scott
China should increase precious metals
By Sungwoo Park (China Daily)
SEOUL – China should increase its gold and silver reserves, the Economic Information Daily reported on Monday, citing an interview with China’s central bank adviser Xia Bin.
Increasing gold reserves at the "appropriate time" is in line with the strategy of internationalizing the yuan, the report cited Xia as saying. "Related departments" should employ a "buy in the dip" strategy over a very long period of time, Xia said.
Bullion soared nearly 30 percent in 2010, advancing for the 10th year, as the dollar dropped and investors sought a store of value amid currency debasement. China is allowing greater use of its currency for cross-border transactions, seeking to reduce reliance on the dollar.
The report is "a positive factor for gold prices in the mid-and-long term," Hwang II Doo, a senior trader at Seoul-based Korea Exchange Bank Futures Co, said on Monday. Still "it didn’t have immediate impact on prices as gold’s gain has more to do with the unrest in Egypt at the moment."
Total gold consumption in China, the second-largest buyer, may gain 15 percent in the first-half, fueled by growing demand for alternative investments and a hedge against inflation, the China Gold Association said last week.
Imports of gold by China jumped almost five-fold in the first 10 months of last year from the entire amount shipped in 2009, the Shanghai Gold Exchange has said. Shipments were 209 metric tons compared with 45 tons for all of 2009, said exchange Chairman Shen Xiangrong.
China to raise gold, silver reserves in 2011
Published on: February 01, 2011 at 16:45
By David Lew
BEIJING (Commodity Online): China is taking several initiatives to raise the country’s reserves in gold and silver in 2011 in an attempt to globalize the Yuan. The main strategy is to buy gold and silver reserves when prices of these precious metals fall.
According to a report published by the Economic Information Daily, the Chinese central bank, the People’s Bank of China, is chalking out plans to buy gold and silver reserves these days considerably as their prices are currently down.
Gold prices have come down by nearly $100 in the last few days. Silver prices that have been also following gold prices in the last one year have fallen thanks to the rise in US dollar value.
China has ambitious plans to make its currency Yuan globally competitive. Several analysts have been predicting that in few years the Chinese Yuan will overtaken the US dollar as the global currency. Recently, global commodities investing legend Jim Rogers said that the Chinese Yuan will eventually dominate the global currency market, overtaking the US dollar.
More…
Jim,
They’ll have to make an adjustment to the indenture that states “only the original purchaser can redeem their purchase.”C
IGA JB Slear.
Dear JB,
That is already inherent in all treasuries. It is called inflation, recognized or not.
Regards,
Jim
UPDATE 1-U.S. Treasury urged to consider 100-year bond
Wed Feb 2, 2011 12:42pm EST
By Rachelle Younglai
WASHINGTON, Feb 2 (Reuters) – Top Wall Street firms are urging the U.S. Treasury to create new products for American investors and have suggested an ultra-long bond with a maturity of 100 years, according to minutes from an advisory committee meeting released on Wednesday.
The Treasury’s debt advisory panel, which includes executives from JPMorgan Chase (JPM.N) and Goldman Sachs (GS.N), recommended at a meeting on Tuesday that the government develop products for three different investor classes: banks, pension funds and insurers, and retail investors.
The new offerings would be a way to pump up domestic demand for the government’s securities. Although around half of U.S. debt is held by domestic investors, heavy reliance on foreign creditors such as China, with just under $900 billion in U.S. Treasuries, is causing some concern in Washington.
The minutes said one member of Treasury’s Borrowing Advisory Committee panel, who was not identified, said that expanding the share of domestic investors was desirable and would reduce overall funding risk, noting that Italy’s, Japan’s and Britain’s debts are largely funded domestically.
Fed passes China in Treasury holdings
CIGA Eric
What does the Fed know that financial TV does not? The entire Western world financial community is broke. The fragile recovery is Happy Juice from the Dow.
Jim
The Fed knows that primary dealers, the credit broker for the Fed and Treasury, have steadily withdrawn from bond and note auctions since 2008. Indirect buyers, such as foreign monetary authorities, and anonymous direct buyers have filled the void created by their withdrawal. The latest 5-year bond auction illustrates this trend that financial TV cannot recognize.
5-Year Bond Auction 
Headline: Fed passes China in Treasury holdings
The Federal Reserve has surpassed China as the leading holder of US Treasury securities even though it has yet to reach the halfway mark in its latest round of quantitative easing, according to official figures.
Based on weekly data released on Thursday, the New York Fed’s holdings of Treasuries in its System Open Market Account, known as Soma, total $1,108bn, made up of bills, notes, bonds and Treasury Inflation Protected Securities, or Tips.
According to the most recent US Treasury data on foreign holders of US government paper, China holds $896bn and Japan owns $877bn.
Source: ft.com
