Chinese Demand For Gold Officially Encouraged By PRC Government

This article, written by gold bull Jeff Clark, points to new demand from China:

As you read this, the Chinese government is doing an extraordinary thing... something nearly unheard of in the modern world.

It is encouraging citizens to put at least 5% of their savings into precious metals.

The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year's meltdown in the stock market, people believe it. After all, Chinese citizens don't receive government retirement money... and they don't have company pension plans like people in many other countries do.

This is why folks in China are lining up outside of banks, post offices, and the new official mint stores to buy gold and silver (they especially like silver because it's cheaper per ounce).

The Chinese attitude toward gold and silver is a striking contrast to the American attitude right now. I don't recall a TV or radio ad from my congressman or President Obama encouraging me to buy gold or silver. Does your bank sell silver bars? Are gold mints popping up in your neighborhood? Are any of your friends, family, or coworkers scrambling to buy precious metals?...

The author has a point, even if his case is easy to laugh at as yet another "vast market in China" fantasy. The PRC government is mercantilistic, which means that it has assumed responsibility for its subjects' well-being. I don't see how this official exhortation can be shot down as a mere ploy. At the very least, it taps into Chinese resentment at the U.S. government devaluing away its massive obligations, much of which is held by "China."

The rest of the article is here: "Gold, silver investment frenzy sweeps China."