Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold and Silver Investors Should Be Following China's Moves Into U.S. Banking Industry

Commodities / Gold and Silver 2011 Jan 25, 2011 - 08:40 PM GMT

By: Jeb_Handwerger


Best Financial Markets Analysis ArticleI coined a term called the "Chinamese Twins" for my readers. I advised my readers that two separate dinners were to be held at the White House, the feast receiving the most publicity was held as the "Grand State Dinner." I regarded this banquet as window dressing held for the benefit of the world press corp, assorted media channels and photo ops to gorge the public adoration of pomp and publicity.

The media did their job of selling adversarial news in the best tradition of sensational journalism, tv panel programs and assorted penny dreadfuls warning us of Chinese Stealth Bombers and aircraft carriers flying the "Red Star." However, I ask my readers to keep there eye on that other tete a tete labeled as an "intimate dinner". That soiree was being held in private with all the politicians, bankers and generals from both sides breaking secret bread. I could not help but muse: "Oh-to be a fly on the wall of that room." The dinners are over, the guests have left carrying home their bags of goodies. What a tasty take home they are. Reading between the lines it was Dylan who wrote: "You don't have to be a weatherman to see which way the wind is blowing."

  1. In my previous article I have covered China's new move to make the Yuan a world currency.
  2. Boeing (BA) has signed a pact to give the Chinese our aircraft technology secrets.
  3. We have agreed to share nuclear secrets to China.
  4. US and Chinese Energy Companies announced a variety of partnerships to share information. Alcoa (AA), Duke Energy, Chinese Power Investment Corporation and Shenhua Group for $7.5 billion dollars.
  5. General Electric (GE) announced a joint venture to China's Shenua Group to sell clean-coal technologies.
  6. The Chinese are entering the U.S sports apparel field and challenging Nike and Adidas.
  7. China has entered the retail banking industry where U.S. Citizen can invest in the Yuan.

The truth is that China and the U.S. realize that they need each other to survive. The U.S. markets are celebrating over the 60+ international deals in which China has agreed to buy some of our best technologies and secrets.

Everyone is leaving home happy except investors in precious metals and mining stocks. In October and November, major institutions sold their positions into the hysteria of QE2, where a major amount of retail and momentum traders entered into metals. At that time a lot of the fund flow was to basic commodities such as uranium, rare earths, copper, wheat, oil and gas and potash. Now the major gold stocks are on sale and I believe we will see a reentry into gold miners and gold and silver bullion as it returns to long term multi-year support. Major gold stocks such as Goldcorp (GG), Newmont(NEM) and Barrick (ABX) are reaching oversold levels not seen in the past two years at a time that they will be producing hefty returns and returning possibly large dividends to shareholders.

Profit taking is a natural process in a bull market which shakes out short term traders and provides opportunities for long term traders and institutions to add or initiate positions. Gold has done it every six months for the past two years since all the bailouts and Central Bank actions began. Don't be too surprised if gold reverses back into the limelight as investors hedge against further sovereign credit defaults out of Europe and within states and municipalities within the Unites States.

One of the most important deals I highlighted above which shows China's international interests in expanding its economic presence and promoting the Yuan as a major reserve currency is its expansion into the U.S. retail banking business. China signed a deal that would acquire retail bank branches in the U.S for the first time. Now U.S. residents can transfer their savings from cheap U.S. dollars to the strengthening Yuan. A deal has been made, China will allow the U.S. dollar to devalue to fund record breaking deficits, if China is allowed entry into the heart of American Capitalism, its retail banking industry. China's financial institutions are in a much stronger position to acquire failing toxic banks after 2008's financial crisis. This will promote the strengthening Yuan as an investment to a U.S. residents by offering the ability to convert and encourage savings. China is attempting to purchase more silver and gold to support the Yuan against other debt ridden and weak currencies. In fact this year they have purchased up to five times what they have been buying in previous years. They have also started funds to invest in ETF's and have just opened a branch in Toronto the epicenter of resource companies.

The U.S. dollar will continue to decline so the U.S. can pay its debts and provide the funds to bankrupt states and municipalities, if China is allowed access into the heart of the North American Financial Markets as outlined above.

This move could be the beginning of a major trend of Chinese financial institutions migrating into the U.S. to expand their global presence. I expect major deals to occur this year, which may be very lucrative for natural resource investors as China has shown an aggressive interest for foreign supplies of precious metals and basic commodities.

This major deal of entering the retail U.S. banking market was the most important event to Chinese officials. China needs to expand its presence globally. They are rapidly developing into the Western Hemisphere and this move is a first step in developing the Yuan as an International Currency. The average American will now have access to enter a bank and invest in the Yuan. This is a signal to my readers about the very grave danger of a U.S. dollar collapse into new lows. China wants to expand overseas with their huge foreign capital reserves and they need basic commodities to fuel its rapidly developing global economy. This could be the beginning of several major steps which could make gold and silver soar. Now mining stocks and bullion are providing interesting opportunities.

Grab your free 30-day trial of my Members-Only Premium Stock Analysis Service NOW at:

By Jeb Handwerger

© 2011 Copyright Jeb Handwerger- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules