Leading Chinese Economists Urge Government To Dump U.S. Treasuries, Buy Gold

Leading Chinese Economists Urge Government To Dump U.S. Treasuries, Buy Gold

[link to www.prisonplanet.com]

Prominent economists in China are calling for their government to ditch vast holdings of U.S. Treasuries in favour of tangible assets such as gold, a move that would have a far reaching impact on the economy.

Reuters reports that Yu Yongding, a former academic adviser to the Chinese central bank has appealed to state representatives to move away from U.S. debt and invest in assets denominated in other currencies, as well as other financial instruments and real goods.

“Although assets in other currencies and forms are not an ideal replacement for U.S. Treasury bonds, diversification should be a basic principle,” Yu wrote in the China Securities Journal.

“When demand for U.S. Treasury securities is strong, it’s a rare opportunity for us to gradually pull back. That way, it will not have a big impact on prices and China will not suffer too much,” he said.

Another influential financial expert, Zhang Monan, of the powerful think tank The State Information Center, also commented to the journal that China should replace increasing amounts of its foreign exchange reserves with hard assets such as gold.

The move could send gold prices back toward record highs following a recent slide.

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