‘Will US annul China’s share in it’s debts?: Former Chief of The Bank of England questions

US will not refute the issue of loans they have taken from other countries. This is the truth. But if times change, China’s business in US can go to dust.  China, along with  other countries should diversify their investments to avoid the increase of debts. The former Chief of the Bank of England has suggested to make lesser investments in American dollars.

The “Gold investor”, written by Mervyn King, ex-governor of Former Chief of The Bank of England questionsthe Bank of England, which includes an article named “The End of Alchemy Money Banking and Future of Global Economy” has become verypopular lately.

In this article, he has criticized the policy of “zero interest” of smaller banks and has advised investment in gold instead. He praised the policy of smaller banks   in many countries that were investing in gold despite the criticism from the well-known  economists.

gold investorWhile warning of the unstable financial future, Mervyn King claimed that China and other big countries would never like to depend on US for their investments and business. Last month, we have seen countries like China, Russia, Brazil reduce their share of bonds with US. In the past one year, China has reduced its investment in US bonds by 1.3 %. At present, China has bonds worth 1.245 lac crores of dollars. At the same time, americas-debt-china_US treasuryChina, along with Russia and other Latin American countries have started to increase their investments in Gold. Mervyn King has also mentioned in his article that by investing in Gold, countries can easily deal with the rising expenses and inflations. When a regime collapses or a new one rises (comes up), everyone is ready to accept gold as an exchange. That’s why small banks never cease to have investments in gold, says King in his article. In the last few days, the price of gold has risen in the international market. We have seen international investors like George Soros increasing the investment in gold.

The former chief of The Bank of England has also warned about the US dollar and has advised investment in gold and this has grabbed the attention of everyone.