1) As the world looks to “reflate” their economies, fiat currencies (dollar, euro etc) are being deliberately devalued by governments worldwide as a way to get out from massive debt burdens that were run up during “credit bubble” and continue at ever higher levels with “stimulus” plans. The US very much wants and needs a weaker dollar and low interest rates as deficits and unemployment continue to soar. Fiat currencies will likely continue to be aggressively devalued over the next decade.2) China has $2 Trillion in Foreign Currency reserves (Fiat Currency) and only 2% in gold, vs. 75% for US and 10% worldwide average. With every .5% drop in the dollar, drops the value of China foreign currency reserves by $10 billion dollars (a move happening daily recently). If China wisely decides to increase its gold reserves and reduce it fiat currency exposure to even just the worldwide average, gold prices could move substantially higher and stay at higher price levels.
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