Silver jumps .84 at the open of world spot market on new China debt policy
April 24th, 2011 6:24 pm ET
Kenneth Schortgen Jr
Silver jumped .84 to open at $47.47 on the world spot market this evening as a new China policy on US debt and dollar reserves reververates through the global markets.
As the Asian pre-market trading begins on Monday, April 25th, news of this weekends change in monetary policy by the Chinese central bank is pushing precious metals, particularly silver and gold, higher at the open. Silver closed at $46.63 on Friday afternoon, up more than $1.35 for the day. The continuing pressure on the devaluing dollar is directing many investors and central banks to move to metals for wealth protection, and not government bonds.
China on Thursday, and again on Saturday, spoke about a new monetary policy direction of lessening their ownership by nearly two-thirds of their US debt holdings, and this would effect the US economy by dumping $2 Trilion in treasuries onto an already limited market. About a month ago, the world's largest bond insurer Pimco divested itself of all US bond holdings, and is now in fact shorting the bond markets. It appears that their gambit was correct, and if China follows through with their new policy, the bond insurer will profit greatly at the behest of governemt debt.
Last week, gold reached a new high of $1510 an ounce, while silver continued to achieve new 30-year highs. The all-time high for silver is just a shade over $50, and it is quite possible that this level could be reached within a few days.
As world spot markets open, and silver rises nearly a dollar at the start of Asain trading, the effects of China's new monetary policies are already creating consequences well before the start of US trading.
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