Tuesday, May 3, 2011

Rob McEwen Claims People's Bank Of China Wants To Own More Gold Than U.S. Government

Although mainland China gold reserves are only about an eighth of the U.S. government's, Rob MvEwan believes that the mainland Chinese government is aiming at besting the U.S. in that department. Other developing-country central banks will keep buying gold too.
Rob McEwen, founder and former head of Goldcorp, now the world's fifth largest Gold Mining company, believes central bank purchases could help push the price of gold to $2000 an ounce by the end of the year.

"China is out to have more gold than America, and Russia is aspiring to the same," said McEwen, who is now chairman and CEO of junior miner US Gold. "When you have debt, you don't have a lot of flexibility. China wants to show its currency has more backing than the US."

They doing so would be quite the prestige coup, but PRC monetary officials are mindful of the effect they doing so would have on the price. If that's their goal, they'd be prudent to wait for the end of a vicious bear market like 1980-82's. Right now, the government of mainland China seems more interested in encouraging their citizens to buy gold.

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