This week's "worth pondering" idea on gold and silver...
The Chinese government presents itself as an all-powerful, all-knowing steward of its economy... and it's obsessed with keeping a good public image. Recently, it started encouraging citizens to invest gold and silver. So the government would look pretty foolish in the eyes of citizens if gold and silver suffered a big drop of, 10% or 15%.
Now, consider China also has the biggest pile of excess currency reserves in the world... several trillion dollars worth. If you were the Chinese government, wouldn't you squeeze a few billion dollars into the gold market if prices declined... rather than look like the worst financial advisor on Earth?
It would be a PR disaster for China if gold and silver took a big fall. If you're an owner of gold and silver, you now have a whopper of a backstop for your position.
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