Wikinvest Wire

Rep. Mark Kirk on China's gold buying plans

Thursday, July 02, 2009

Here's the video to go along with yesterday's item about the Chinese wanting to exchange lots more U.S. dollars for gold. Skip directly to 3:20 to hear about their future buying plans.

There doesn't seem to be any uncertainty from Rep. Kirk who notes, "...they plan to buy $80 billion worth of gold - that's two Fort Knoxes", though it's not clear how he figured that Fort Knox has about 1,300 tonnes of gold. Wikipedia says it's about three times that amount.


ip said...

This discussion is strikingly disingenuous by all parties involved. Our government is asking the Chinese for two mutually exclusive things: to keep buying Treasuries (they are safe here) and to stop holding yuan down (by buying Treasuries). Dean Baker is fond of pointing out this absurdity.

I think the Chinese fully understand they will loose a lot of money on their dollar investments, but they are buying two things that are more valuable to them: industrialization and technical progress of China and de-industrialization of the US, with clear implications to the future balance of world power.

Given where the US is right now, we should be more concerned about saving and rebuilding our industry than the strong dollar. As much as a weak dollar would hurt me personally, it is clear that a large country without strong industry cannot have a strong currency in the long term.

Anonymous said...


Actually, we would like them to buy Treasuries to keep financing us and allow the yuan to rise by printing at a lower rate than we print dollars. The argument about a weak currency being better for domestic industry is crap. A weak currency does temporarily lower labor costs on an international level. But ultimately, it fosters inflation, price/planning instability and capital flight. A strong currency works fine as long as we allow competition and productivity gains to drive down prices naturally.

Anonymous said...

I get a giggle everytime I see one of these screenshots that say something like 'Geithner: The U.S. is committed to a strong dollar' on the scroll.


Good stuff! Laughter lowers the blood pressure. Thanks for the boost!

Anonymous said...

Fort Knox has only $40 billion wirth of Gold? The official statistics show 8000 tons so he must have just made a mistake.

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