Chinese Have $5.2 Trillion Bank Deposits--More Than GDPs Of Brazil, India, Russia Together

Imagine what $5.2  by the newly wealthy Chinese will do to the price of gold, of consumer products, of property inside and outside China. These deposits are growing at a nominal rate of 14% annually– leaving a wide margin above the 5.5% current rate of inflation. As this pool of $5.2 trillion earns interest income that is below the 5.5% inflation rate, the Chinese must avidly look for investments that can make up that differential and increase their wealth. Take a look at the chart below which shows that gold has increased  some 24% so far this year, while hogs are up 29% and cattle up 25%. That’s inflationary for food. And as there are limited outlets inside China for that $5.2 trillion, I think you can make a vigorous argument for gold and silver to continue climbing– fueled by the most extraordinarily fast increase in purchasing power in world history.

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