Tags: US | Practically | Owned | China | Buy | Gold

Analyst: US 'Practically Owned' by China so Buy Gold

By Dan Weil   |   Friday, 01 Oct 2010 01:35 PM

The Chinese economy is poised to surpass the U.S. economy later this century, and that makes gold a much wiser investment than the dollar, says Tom Winnifrith, CEO at financial-services firm Rivington Street Holdings.

"America is practically owned by China," he told CNBC. China is the largest foreign holder of Treasuries, with $847 billion as of July.

The U.S. government isn’t addressing the trade deficit and the exploding debt burden, Winnifrith says. There’s a parallel to the collapse of Britain’s empire in the 20th century, he says.

"America is doing what Britain did," Winnifrith said. "America spends much more than it can afford, and it's not addressing the issue."

China and India represented the world’s two biggest economies in 1832, and that ranking will repeat itself by 2032, he says.

"The 200 years when Britain and the U.S. were the top two economies were an aberration, and that will change," Winnifrith said.

"The decline of empires has happened much faster than folks think. I believe that gold will be a far better bet in 20 years than the dollar."

Winnifrith isn’t the only expert bullish on gold, which has reached a record high of $1,322 an ounce. Hedge-fund legend John Paulson holds 80 percent of his assets in the precious metal.

Given his expectation – and that of others – that the Federal Reserve will expand its quantitative easing, Paulson says gold could hit $2,400 an ounce, Gold Alert reports.

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The Chinese economy is poised to surpass the U.S. economy later this century, and that makes gold a much wiser investment than the dollar, says Tom Winnifrith, CEO at financial-services firm Rivington Street Holdings. America is practically owned by China, he told CNBC....
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