Tags: china | gold | copper

Copper Pressures Gold as Safe Haven

By    |   Friday, 17 Apr 2009 10:51 AM

While the Western media has been focusing on China’s verbiage about the need for an alternative to the dollar, the nation has quietly been snapping up copper and other industrial metals.

With fear rampant that the greenback will soon plunge, Beijing is trying to reduce its dependence on the U.S. currency as quickly as possible, says Nobu Su, head of Taiwan's TMT group, which ships commodities to China.

"China has woken up. The West is a black hole with all this money being printed,” he tells the London Telegraph.

“The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get 10 times the impact, and can cover their infrastructure for 50 years."

China already has loaded up on U.S. Treasuries to the tune of $744 billion and has expressed concern about the currency risk on those holdings.

Now Beijing may have decided to turn to copper and the other base metals as an alternative.

“They are definitely buying metals to diversify out of U.S. Treasuries and dollar holdings," Jim Lennon, head of commodities at Macquarie Bank, tells the Telegraph.

Not everyone thinks that China is running away from the dollar, though.

Nick Lardy, a China scholar at the Peterson Institute for International Economics, tells Moneynews the country will continue to spend a substantial portion of its trade surplus on Treasuries, though that surplus is shrinking.

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While the Western media has been focusing on China’s verbiage about the need for an alternative to the dollar, the nation has quietly been snapping up copper and other industrial metals.With fear rampant that the greenback will soon plunge, Beijing is trying to reduce its...
china,gold,copper
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2009-51-17
Friday, 17 Apr 2009 10:51 AM
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