IâÂÂve been spending a lot of time this week talking to my sources in China, one of whom is inside one of the countryâÂÂs sovereign wealth funds (SWF).
He could not discuss the details of the Rio Tinto bribery scandal, but indicated that it was far more about saving face and establishing position than anything else.
He also indicated that the SWF analysts were working around the clock trying to put deals togetherâÂ¦ for China itâÂÂs a race against the clock for how fast they can convert their $2 trillion in US dollar holdings into strategic assetsâÂÂ namely oil and gold.
At todayâÂÂs deflated prices, putting together a really good billion dollar deal is a difficult thing to do. Putting together 2,000 of them is impossible. Doing it before the dollar collapses? No chance. And they know it.
So as a hedge, the govement appears to be pumping up demand for gold and silver among the public, possibly preparing them for an imminent dollar decline.