"Who's got the debt? The West. Who are the biggest creditors? The East."
Europe will be forced to sell its gold
reserves to cover its debts and a resurgent China is poised to snap them up, according to Close Brothers' Chris Bailey.
The Chinese government is likely to start buying up gold
soon, according to Bailey, and the giant economy's debt-free position means a recovery for Chinese equities is inevitable.
He thinks that history has shown gold
reserves equate to a strong economic position, and this combined with China's balanced books make it the best place for investors' money.
"Investors should follow the gold
. Who has the gold
has the power," he said.
He added: "Current cash-strapped European and Western governments still have a lot of gold
. Therefore I can see there being, effectively, a bailout to sort out their debt with China doing a big purchase of gold
off them; and we are already seeing this happen. ...
"All this funny money or quantitative easing is good news for emerging markets, where the consumer continues to be so important. In very simple terminology, who's got the debt? The West. Who are the biggest creditors? The East."Read Article