7/20/2015
By Charles Payne, CEO & Principal Analyst

China has increased its gold hoarding by 57% since 2009, it brings back those same questions- why so much gold?

As much as we braced for and even celebrated the fall of the Chinese stock market, which included the   implosion of that nation, they are moving full steam ahead. Programs that speak beyond a stock crash, to stepping up on the world’s economic stage. The new Silk Road, the alternative to the International Monetary Fund (IMF), major energy and security deals with Russia, and even propping up its stock market. However, that gold speaks to the notion that all its dollars and Euros are going to go through a painful period of devaluation.

Furthermore, not only have we seen a glimpse via the Greece drama of how tenuous the Euro has become, but we also know central banks have been loathing the idea of reversing their course despite claims of victory over the economic implosion.

Personally, I think it is too early to panic, but at some point, we will have to make moves similar to the Hungarian Central Bank and buy silver, real estate, and even old masters if you can afford it. Actually, it could be years from now before we would have to take such actions, but it is good to know the game plan. If you are looking for a buy signal, other than central banks, just watch gold, which failed to pop in the throes of Greece/China.

Last week, gold collapsed.

Maybe I will consider buying above $1,220…but there is no sense of urgency.

In the meantime, China wants its currency to be the world’s reserve, so it is unlikely they will allow anything beyond a run-of-the-mill economic correction to happen anytime soon.

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Charles Payne
Wall Street Strategies

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