India and China Increase Gold Holdings

The 220 kg Gold brick displayed in Taiwan

LCG reported the following in its latest World Ahead Weekly Update:

India and China Buying Gold. Gold prices are a powerful indicator of national trust in world currencies. As confidence in national currencies increases, the price of gold falls. However, gold prices increase as confidence in national currencies falls. As confidence in the U.S. dollar declines, other nations are increasing their gold holdings and using them to replace their stock of U.S. dollars. This week, India purchased 200 tons of gold from the International Monetary Fund—even though gold was selling at a near all-time high. This transaction was worth almost US$7 billion. Economists expect China to follow suit in the very near future as it works to convert some of its US$2 trillion of foreign currency reserves into a safer source. All of this translates into declining confidence in the U.S. dollar and its continued decline in value on the world stage (MSN.com, November 3, 2009). The “greenback” (U.S. dollar) and British pound were once the coveted currencies of the world, but as these and other Israelite-descended nations move further afield from God’s way, these currencies are approaching the value of “just” the paper that they are printed on. God encouraged the Israelite nations long ago, that if they would be obedient to Him, they would be the head and the nations of the world would be the tail—they would be the lenders and the rest of the nations would be the borrowers (Deuteronomy 28:12-14).

Historically, nations do not tend to buy massive amounts of gold when it is at or near all time highs. Taiwan is also a major holder of gold.

Also notice the following news item:

“To have India step in and buy half of the IMF gold was a big surprise,” said Joe Foster, a precious metals analyst at Van Eck Global. “It shows that other central banks are looking to buy gold.”

Analysts say many monetary policy makers are looking for ways to reduce their exposure to the U.S. dollar, which is the traditional reserve currency of choice for many foreign central banks…

Traders say gold could emerge as the “new dollar” when it comes to reserve currencies.

(Rooney B. Gold hits a record near $1100. CNNMoney, November 4, 2009 http://money.cnn.com/2009/11/04/markets/gold/?postversion=2009110415

So why are certain nations buying gold now?

Certain nations like India are correctly convinced that even if gold drops in value, ultimately, the dollar itself will dip much further. The Bible is clear that after the Great Tribulation begins, gold will still have value. And it will until sometime during what the Bible calls “the day of the Lord”.

Some articles of possibly related interest may include:

India, Its Biblical Past and Future: Any Witness? The Bible discusses the origins of those of Indian heritage and discusses some of the witness to them (including those in Bangladesh, Pakistan, and Sri Lanka).
China, Its Biblical Past and Future, Part 1: Genesis and Chinese Characters This article provides information showing that the Chinese peoples must have known about various accounts in the Book of Genesis up until their dispersion after the Tower of Babel.
China, Its Biblical Past and Future, Part 2: The Sabbath and Some of God’s Witness in China When did Christianity first come to China? And is there early evidence that they observed the seventh day sabbath?
Asia in Prophecy What is Ahead for Asia? Who are the “Kings of the East”? What will happen to nearly all the Chinese, Russians, Indians, and others of Asia? China in prophecy, where? Who has the 200,000,000 man army related to Armageddon?
Who is the King of the North? Is there one? Do biblical and Roman Catholic prophecies point to the same leader? Should he be followed? Who will be the King of the North discussed in Daniel 11? Is a nuclear attack prophesied to happen to the English-speaking peoples of the United States, Great Britain, Canada, Australia, and New Zealand? When do the 1335 days, 1290 days, and 1260 days (the time, times, and half a time) of Daniel 12 begin? When does the Bible show that economic collapse will affect the United States? Why does he accumulate gold?