China will buy up the gold and silver markets.

The Chinese government is encouraging its citizens to put at least 5% of their savings into gold and silver.They are telling their people that gold and silver are good investments and that will safeguard their wealth.Since the stock market crisis last year, the Chinese believe it.In China there is no government retirement and no pension plans like many countries in the world.

People are lining up outside of Chinese banks, post offices and the new official mint stores to buy gold and silver.

The Chinese attitude toward gold and silver is very different than the American attitude right now.Gold and silver investing in the U.S. is nowhere near the mainstream.

The Future

Market analysts project that the Chinese middle class will increase 70% by the year 2020.Over the next 10 years the number of gold and silver purchasers will increase dramatically in Asia.American’s will also eventually join the modern-day gold rush.However, by the time the majority of Americans recognize the value of owning gold the prices will have risen significantly from where they are today.

How small is the gold market?

Annual world gold production is 80 million oz.The price of Gold is over $1100 an ounce.So the annual gold production in dollars is $88 billion.

To put this in perspective the annual world oil consumption is just over 31 billion barrels.The price of a barrel is now about $75.So the annual world oil usage in dollars is $3.3 trillion. That is 35 times more dollars of annual oil consumed than of annual gold produced.