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Why wouldn't China make a play for Italy's gold and say 'we want that 2,500 tons of gold and in exchange we'll float some kind of lending facility to you'?

22 Nov 2011

Commodity Online
The following is an excerpt of an interview conducted by Press TV with Dan Collins, founder of thechinamoneyreport.com

Press TV: I'm making a prediction that China makes a play for Italy's gold because Italy has 2,500 tons of gold. It's the biggest position in Europe. Why wouldn't China, who's starving for gold bullion with 1,000 tons since they're looking to acquire 5,000 tons to be competitive with the US . Why wouldn't China since they were rumoured to be bailing out Greece at some point but, of course, Greece only has 110 tons of Gold. So, why wouldn't China make a play for Italy's gold and say 'we want that 2,500 tons of gold and in exchange we'll float some kind of lending facility to you'? What are your thoughts on that?

Collins: If we look at history, that's happened many, many times. You know, right before the Lend-Lease Act in World War II, the first thing the US did was have the British send all their gold over. So we could easily see that happen today. I don't know if we'll ever hear about it in the press but it could easily happen.

And you could easily make the case that America will have to send gold reserves over to China at some point as well.

Press TV:The big news coming from China in the past few weeks is that investment demand for gold and silver is up. Give us the numbers.

Collins: Yeah, real big news, Max. Shanghai Gold Exchange reported last week, starting with silver, silver demand's up 750 percent for silver forward contracts. The major buyers here are the large commercial banks of China.

First of all, I'll talk a little bit about silver. They're following the gold pattern here in China which is average Chinese citizens here now can buy silver in their bank account. So, you don't need to keep cash in your bank, you can go online and move your cash into silver or you can move it into gold. And that's really what's driving the increase in gold and silver prices here.

They started the gold trade in the major commercial banks about three years ago. Silver started last year in August, 2010. But what was really shocking is the numbers that have come out. I mentioned the year over year increases.

But if we look at just one Chinese bank, the ICBC, Industrial and Commercial Bank of China, first half of this year they sold over 300 tons of silver. 300 tons is roughly about 10 million ounces. So, this year they'll do roughly 20 million ounces of silver which is roughly 2 percent of all the silver mined in one year.

So, we look at the Chinese banking system just starting these new products in China, this year they could take nine or ten percent of all the silver mined in the world. And these products are just getting started. Two, three, four years from now, the Chinese banks could be selling 20, 30, 40 percent of all the silver mined globally. And that's really why we're seeing huge increases in silver.

The above is only a brief transcript .For the full interview, go to: presstv.ir


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