2012-03-25

Chinese villagers demand gold; 100g of gold and 100g of silver in dividends delivered to every resident


Changjiang village and its residents are the collective owners of the Jiangsu Xinchangjiang Group, a top 500 company in China, and have raked in benefits in the past including private villas for every family, stock dividends, and a previous silver and gold giveaway in 2010. Last week’s giveaway fulfills the promise made by party chief Li Liangbao to get gold into the hands of every villager. Gold was specifically requested by the villagers given its investment purposes and reputation.

At around 400 RMB ($62.50) per gram of gold at today’s market price, each resident received a windfall of roughly 40,000 RMB ($6,250). The largest amount given to a single household was 700 grams, or roughly 280,000 RMB ($43,750).

Given the precious cargo of the barge used to ferry the precious metals up the Yangtze, the entire operation was shrouded in secrecy. Before the gold arrived, villagers received a secretive message along with a safe, sparking rumors their gold was arriving soon. Sure enough, two days later the barge arrived and villagers quickly queued to receive their share.

H/T: ChinaSmack. Jiangsu Village Gives Every Villager Gold and Silver Bars
Original Chinese article: 江苏长江村给每个村民派发100克黄金100克白银

It is stories like these that serve as a good reminder to Western people that they are not the center of the world anymore. One can often find anti-gold standard sentiment from the likes of Warren Buffett and Ben Bernanke, to name two of the most prominent. This post from Marignal Revolution and the ensuing comments Selgin reviews Bernanke on the Gold Standard show much of the negativity surrounding gold. The purpose here is not to debate the merits of a gold standard and how it would work, only that as 2.5 billion Indian and Chinese people make their way up the development ladder, what they think matters more than what economists and leaders in relatively declining Western powers think. If the Asians overvalue gold, it may be that Western nations would be wise to sell overvalued gold into Asian hands and rely on other monetary standards, but at this point, the anti-gold sentiment, from an investment standpoint is overdone. (Though short-term we could see a significant reversal if Chinese buying is hampered by slower growth.

No comments:

Post a Comment