Asian Gold: Michael Checkan explains how it works

In this video podcast Asset Strategies International’s Michael Checkan, and Alasdair Macleod, discuss the role of gold in Asian countries such as Vietnam, China, India and Turkey.

Checkan explains that gold is the ultimate safe haven as far as wealth is concerned. He demonstrates this point by telling of how Vietnamese refugees who escaped the country in 1975 with gold coins and jewellery could transfer their wealth out of the country while people who took national currency with them were left holding the bag as the Vietnamese currency became worthless.

Both men also talk about the ongoing wealth transfer from west to east and how precious metals are viewed in different Asian countries. In China gold is mainly seen as a means of wealth preservation rather than as an investment. Interest in silver in mainland China is still low, but silver dealing in Hong Kong is increasing. Checkan believes that the higher the price of gold goes, the more small buyers will seek the “poor man’s gold” — silver — as an alternative.

Checkan points out that a lot of money is currently sitting on the side-lines, and that people are holding off on making metal purchases in anticipation of further price declines. But once those buyers are finally emboldened to enter the precious metals markets, he expects a rather significant move to the upside which could take place later this year.

Both men discuss strong public gold demand in China, where the government encourages citizens to buy precious metals. The Chinese government is buying resources all over the world in an effort to diversify their foreign exchange holdings — which is partly why China has become the world’s biggest gold importer, a title previously held by India. Indian gold demand has however slowed due to weakness in the rupee and increased gold taxes.

Finally, they discuss the rise of Turkey’s economy and how Turkish gold accounts are helping to diversify financial use of the metal.

This video podcast was recorded on May 9 2012 at the 2nd Precious Metals Conference in Zagreb, Croatia.

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Alasdair started his career as a stockbroker in 1970 on the London Stock Exchange. In those days, trainees learned everything: from making the tea, to corporate finance, to evaluating and dealing in equities and bonds. They learned rapidly through experience about things as diverse as mining shares and general economics. It was excellent training, and within nine years Alasdair had risen to become senior partner of his firm. Subsequently, Alasdair held positions at director level in investment management, and worked as a mutual fund manager. He also worked at a bank in Guernsey as an executive director. For most of his 40 years in the finance industry, Alasdair has been de-mystifying macro-economic events for his investing clients. The accumulation of this experience has convinced him that unsound monetary policies are the most destructive weapon governments use against the common man. Accordingly, his mission is to educate and inform the public in layman’s terms what governments do with money and how to protect themselves from the consequences.

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