{UAH} Do you know that China buying so much gold? Why?

Because basically the USD is sitting on a mountain of debt ($18 trillion) and nobody believes the US will ever pay it back. Everybody believes that the US will inflate the USD until the debt is worthless. It's only a question of velocity of the inflation.

China is sitting on $4 trillion dollars of foreign reserves - USD, Euro, Japanese Yen, etc. Euro does not have a common treasury to support it so it's in even worse shape than USD. Japanese Yen is on the back of a shrinking economy and a graying population. So the Foreign reserve China is sitting on will become a pile of worthless paper, and because of her vast trade network, she has to hold a significant amount of foreign currency no matter what. She can't just dump them.

So what are her options? Get something that will hold its value no matter what. One of them is gold. Most countries have 3 - 4% of their reserves in gold. The US has close to 80% reserve in gold because, well, she prints her own money and she can print as much as she wants, so there's no sense holding USD as reserve. China has 1.6% in gold and the rest in foreign currency. So she wants to add a bit to her gold hoard as a hedge against foreign currency inflation.

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