Showing posts with label balance of power. Show all posts
Showing posts with label balance of power. Show all posts

Monday, March 19, 2012

The 48 Rules Of Power And Leadership: REVIEW

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My friend and associate, MPower Brands entrepreneur and founder Daniel J. Sherman, is frequently referring to the legendary 48 Rules Of Power. Whether you have read the bestseller by that title (authored by Robert Greene), or whether you gave garnered this information by reading Niccolo Machiavelli's "The Prince," from which most of this material derives, it is worth knowing.

The paradox of command is that a life of power is a life of ceaseless questioning, judging and taking action. Leadership is a lonely business.

As Douglas E Castle, personally, I am not in agreement with all of what follows -- bu I believe that you can cull substantial benefit from reading through it, thinking about its implications, and shaping it to you personal style.

Nonetheless, a quick synopsis of these 48 Rules (or 48 Laws) follows as an essential study tool for every person who would presume to rise to power. In order to read this, you might wish to set your browser on a higher magnification level as I have reduced the font size to shorten this post and avoid being a causative factor in your carpal tunnel syndrome from excessive scrolling.

The framework follows for your use:






Law 1

Never Outshine the Master

Always make those above you feel comfortably superior. In your desire to please or impress them, do not go too far in displaying your talents or you might accomplish the opposite – inspire fear and insecurity. Make your masters appear more brilliant than they are and you will attain the heights of power.

Law 2

Never put too Much Trust in Friends, Learn how to use Enemies

Be wary of friends-they will betray you more quickly, for they are easily excited to envy. They also become spoiled and tyrannical. But hire a former enemy and he will be more loyal than a friend, because he has more to prove. In fact, you have more to fear from friends than from enemies. If you have no enemies, find a way to make them.

Law 3

Conceal your Intentions

Keep people off-balance and in the dark by never revealing the purpose behind your actions. If they have no clue what you are up to, they cannot prepare a defense. Guide them far enough down the wrong path, envelope them in enough smoke, and by the time they realize your intentions, it will be too late.

Law 4

Always Say Less than Necessary

When you are trying to impress people with words, the more you say, the more common you appear, and the less in control. Even if you are saying something banal, it will seem original if you make it vague, open-ended, and sphinxlike. Powerful people impress and intimidate by saying less. The more you say, the more likely you are to say something foolish.

Law 5

So Much Depends on Reputation – Guard it with your Life

Reputation is the cornerstone of power. Through reputation alone you can intimidate and win; once you slip, however, you are vulnerable, and will be attacked on all sides. Make your reputation unassailable. Always be alert to potential attacks and thwart them before they happen. Meanwhile, learn to destroy your enemies by opening holes in their own reputations. Then stand aside and let public opinion hang them.

Law 6

Court Attention at all Cost

Everything is judged by its appearance; what is unseen counts for nothing. Never let yourself get lost in the crowd, then, or buried in oblivion. Stand out. Be conspicuous, at all cost. Make yourself a magnet of attention by appearing larger, more colorful, more mysterious, than the bland and timid masses.

Law 7

Get others to do the Work for you, but Always Take the Credit

Use the wisdom, knowledge, and legwork of other people to further your own cause. Not only will such assistance save you valuable time and energy, it will give you a godlike aura of efficiency and speed. In the end your helpers will be forgotten and you will be remembered. Never do yourself what others can do for you.

Law 8

Make other People come to you – use Bait if Necessary

When you force the other person to act, you are the one in control. It is always better to make your opponent come to you, abandoning his own plans in the process. Lure him with fabulous gains – then attack. You hold the cards.

Law 9

Win through your Actions, Never through Argument

Any momentary triumph you think gained through argument is really a Pyrrhic victory: The resentment and ill will you stir up is stronger and lasts longer than any momentary change of opinion. It is much more powerful to get others to agree with you through your actions, without saying a word. Demonstrate, do not explicate.

Law 10

Infection: Avoid the Unhappy and Unlucky

You can die from someone else’s misery – emotional states are as infectious as disease. You may feel you are helping the drowning man but you are only precipitating your own disaster. The unfortunate sometimes draw misfortune on themselves; they will also draw it on you. Associate with the happy and fortunate instead.

Law 11

Learn to Keep People Dependent on You

To maintain your independence you must always be needed and wanted. The more you are relied on, the more freedom you have. Make people depend on you for their happiness and prosperity and you have nothing to fear. Never teach them enough so that they can do without you.

Law 12

Use Selective Honesty and Generosity to Disarm your Victim

One sincere and honest move will cover over dozens of dishonest ones. Open-hearted gestures of honesty and generosity bring down the guard of even the most suspicious people. Once your selective honesty opens a hole in their armor, you can deceive and manipulate them at will. A timely gift – a Trojan horse – will serve the same purpose.

Law 13

When Asking for Help, Appeal to People’s Self-Interest, Never to their Mercy or Gratitude

If you need to turn to an ally for help, do not bother to remind him of your past assistance and good deeds. He will find a way to ignore you. Instead, uncover something in your request, or in your alliance with him, that will benefit him, and emphasize it out of all proportion. He will respond enthusiastically when he sees something to be gained for himself.

Law 14

Pose as a Friend, Work as a Spy

Knowing about your rival is critical. Use spies to gather valuable information that will keep you a step ahead. Better still: Play the spy yourself. In polite social encounters, learn to probe. Ask indirect questions to get people to reveal their weaknesses and intentions. There is no occasion that is not an opportunity for artful spying.

Law 15

Crush your Enemy Totally

All great leaders since Moses have known that a feared enemy must be crushed completely. (Sometimes they have learned this the hard way.) If one ember is left alight, no matter how dimly it smolders, a fire will eventually break out. More is lost through stopping halfway than through total annihilation: The enemy will recover, and will seek revenge. Crush him, not only in body but in spirit.

Law 16

Use Absence to Increase Respect and Honor

Too much circulation makes the price go down: The more you are seen and heard from, the more common you appear. If you are already established in a group, temporary withdrawal from it will make you more talked about, even more admired. You must learn when to leave. Create value through scarcity.

Law 17

Keep Others in Suspended Terror: Cultivate an Air of Unpredictability

Humans are creatures of habit with an insatiable need to see familiarity in other people’s actions. Your predictability gives them a sense of control. Turn the tables: Be deliberately unpredictable. Behavior that seems to have no consistency or purpose will keep them off-balance, and they will wear themselves out trying to explain your moves. Taken to an extreme, this strategy can intimidate and terrorize.

Law 18

Do Not Build Fortresses to Protect Yourself – Isolation is Dangerous

The world is dangerous and enemies are everywhere – everyone has to protect themselves. A fortress seems the safest. But isolation exposes you to more dangers than it protects you from – it cuts you off from valuable information, it makes you conspicuous and an easy target. Better to circulate among people find allies, mingle. You are shielded from your enemies by the crowd.

Law 19

Know Who You’re Dealing with – Do Not Offend the Wrong Person

There are many different kinds of people in the world, and you can never assume that everyone will react to your strategies in the same way. Deceive or outmaneuver some people and they will spend the rest of their lives seeking revenge. They are wolves in lambs’ clothing. Choose your victims and opponents carefully, then – never offend or deceive the wrong person.

Law 20

Do Not Commit to Anyone

It is the fool who always rushes to take sides. Do not commit to any side or cause but yourself. By maintaining your independence, you become the master of others – playing people against one another, making them pursue you.

Law 21

Play a Sucker to Catch a Sucker – Seem Dumber than your Mark

No one likes feeling stupider than the next persons. The trick, is to make your victims feel smart – and not just smart, but smarter than you are. Once convinced of this, they will never suspect that you may have ulterior motives.

Law 22

Use the Surrender Tactic: Transform Weakness into Power

When you are weaker, never fight for honor’s sake; choose surrender instead. Surrender gives you time to recover, time to torment and irritate your conqueror, time to wait for his power to wane. Do not give him the satisfaction of fighting and defeating you – surrender first. By turning the other check you infuriate and unsettle him. Make surrender a tool of power.

Law 23

Concentrate Your Forces

Conserve your forces and energies by keeping them concentrated at their strongest point. You gain more by finding a rich mine and mining it deeper, than by flitting from one shallow mine to another – intensity defeats extensity every time. When looking for sources of power to elevate you, find the one key patron, the fat cow who will give you milk for a long time to come.

Law 24

Play the Perfect Courtier

The perfect courtier thrives in a world where everything revolves around power and political dexterity. He has mastered the art of indirection; he flatters, yields to superiors, and asserts power over others in the mot oblique and graceful manner. Learn and apply the laws of courtiership and there will be no limit to how far you can rise in the court.

Law 25

Re-Create Yourself

Do not accept the roles that society foists on you. Re-create yourself by forging a new identity, one that commands attention and never bores the audience. Be the master of your own image rather than letting others define if for you. Incorporate dramatic devices into your public gestures and actions – your power will be enhanced and your character will seem larger than life.

Law 26

Keep Your Hands Clean

You must seem a paragon of civility and efficiency: Your hands are never soiled by mistakes and nasty deeds. Maintain such a spotless appearance by using others as scapegoats and cat’s-paws to disguise your involvement.

Law 27

Play on People’s Need to Believe to Create a Cultlike Following

People have an overwhelming desire to believe in something. Become the focal point of such desire by offering them a cause, a new faith to follow. Keep your words vague but full of promise; emphasize enthusiasm over rationality and clear thinking. Give your new disciples rituals to perform, ask them to make sacrifices on your behalf. In the absence of organized religion and grand causes, your new belief system will bring you untold power.

Law 28

Enter Action with Boldness

If you are unsure of a course of action, do not attempt it. Your doubts and hesitations will infect your execution. Timidity is dangerous: Better to enter with boldness. Any mistakes you commit through audacity are easily corrected with more audacity. Everyone admires the bold; no one honors the timid.

Law 29

Plan All the Way to the End

The ending is everything. Plan all the way to it, taking into account all the possible consequences, obstacles, and twists of fortune that might reverse your hard work and give the glory to others. By planning to the end you will not be overwhelmed by circumstances and you will know when to stop. Gently guide fortune and help determine the future by thinking far ahead.

Law 30

Make your Accomplishments Seem Effortless

Your actions must seem natural and executed with ease. All the toil and practice that go into them, and also all the clever tricks, must be concealed. When you act, act effortlessly, as if you could do much more. Avoid the temptation of revealing how hard you work – it only raises questions. Teach no one your tricks or they will be used against you.

Law 31

Control the Options: Get Others to Play with the Cards you Deal

The best deceptions are the ones that seem to give the other person a choice: Your victims feel they are in control, but are actually your puppets. Give people options that come out in your favor whichever one they choose. Force them to make choices between the lesser of two evils, both of which serve your purpose. Put them on the horns of a dilemma: They are gored wherever they turn.

Law 32

Play to People’s Fantasies

The truth is often avoided because it is ugly and unpleasant. Never appeal to truth and reality unless you are prepared for the anger that comes for disenchantment. Life is so harsh and distressing that people who can manufacture romance or conjure up fantasy are like oases in the desert: Everyone flocks to them. There is great power in tapping into the fantasies of the masses.

Law 33

Discover Each Man’s Thumbscrew

Everyone has a weakness, a gap in the castle wall. That weakness is usually an insecurity, an uncontrollable emotion or need; it can also be a small secret pleasure. Either way, once found, it is a thumbscrew you can turn to your advantage.

Law 34

Be Royal in your Own Fashion: Act like a King to be treated like one

The way you carry yourself will often determine how you are treated; In the long run, appearing vulgar or common will make people disrespect you. For a king respects himself and inspires the same sentiment in others. By acting regally and confident of your powers, you make yourself seem destined to wear a crown.

Law 35

Master the Art of Timing

Never seem to be in a hurry – hurrying betrays a lack of control over yourself, and over time. Always seem patient, as if you know that everything will come to you eventually. Become a detective of the right moment; sniff out the spirit of the times, the trends that will carry you to power. Learn to stand back when the time is not yet ripe, and to strike fiercely when it has reached fruition.

Law 36

Disdain Things you cannot have: Ignoring them is the best Revenge

By acknowledging a petty problem you give it existence and credibility. The more attention you pay an enemy, the stronger you make him; and a small mistake is often made worse and more visible when you try to fix it. It is sometimes best to leave things alone. If there is something you want but cannot have, show contempt for it. The less interest you reveal, the more superior you seem.

Law 37

Create Compelling Spectacles

Striking imagery and grand symbolic gestures create the aura of power – everyone responds to them. Stage spectacles for those around you, then full of arresting visuals and radiant symbols that heighten your presence. Dazzled by appearances, no one will notice what you are really doing.

Law 38

Think as you like but Behave like others

If you make a show of going against the times, flaunting your unconventional ideas and unorthodox ways, people will think that you only want attention and that you look down upon them. They will find a way to punish you for making them feel inferior. It is far safer to blend in and nurture the common touch. Share your originality only with tolerant friends and those who are sure to appreciate your uniqueness.

Law 39

Stir up Waters to Catch Fish

Anger and emotion are strategically counterproductive. You must always stay calm and objective. But if you can make your enemies angry while staying calm yourself, you gain a decided advantage. Put your enemies off-balance: Find the chink in their vanity through which you can rattle them and you hold the strings.

Law 40

Despise the Free Lunch

What is offered for free is dangerous – it usually involves either a trick or a hidden obligation. What has worth is worth paying for. By paying your own way you stay clear of gratitude, guilt, and deceit. It is also often wise to pay the full price – there is no cutting corners with excellence. Be lavish with your money and keep it circulating, for generosity is a sign and a magnet for power.

Law 41

Avoid Stepping into a Great Man’s Shoes

What happens first always appears better and more original than what comes after. If you succeed a great man or have a famous parent, you will have to accomplish double their achievements to outshine them. Do not get lost in their shadow, or stuck in a past not of your own making: Establish your own name and identity by changing course. Slay the overbearing father, disparage his legacy, and gain power by shining in your own way.

Law 42

Strike the Shepherd and the Sheep will Scatter

Trouble can often be traced to a single strong individual – the stirrer, the arrogant underling, the poisoned of goodwill. If you allow such people room to operate, others will succumb to their influence. Do not wait for the troubles they cause to multiply, do not try to negotiate with them – they are irredeemable. Neutralize their influence by isolating or banishing them. Strike at the source of the trouble and the sheep will scatter.

Law 43

Work on the Hearts and Minds of Others

Coercion creates a reaction that will eventually work against you. You must seduce others into wanting to move in your direction. A person you have seduced becomes your loyal pawn. And the way to seduce others is to operate on their individual psychologies and weaknesses. Soften up the resistant by working on their emotions, playing on what they hold dear and what they fear. Ignore the hearts and minds of others and they will grow to hate you.

Law 44

Disarm and Infuriate with the Mirror Effect

The mirror reflects reality, but it is also the perfect tool for deception: When you mirror your enemies, doing exactly as they do, they cannot figure out your strategy. The Mirror Effect mocks and humiliates them, making them overreact. By holding up a mirror to their psyches, you seduce them with the illusion that you share their values; by holding up a mirror to their actions, you teach them a lesson. Few can resist the power of Mirror Effect.

Law 45

Preach the Need for Change, but Never Reform too much at Once

Everyone understands the need for change in the abstract, but on the day-to-day level people are creatures of habit. Too much innovation is traumatic, and will lead to revolt. If you are new to a position of power, or an outsider trying to build a power base, make a show of respecting the old way of doing things. If change is necessary, make it feel like a gentle improvement on the past.

Law 46

Never appear too Perfect

Appearing better than others is always dangerous, but most dangerous of all is to appear to have no faults or weaknesses. Envy creates silent enemies. It is smart to occasionally display defects, and admit to harmless vices, in order to deflect envy and appear more human and approachable. Only gods and the dead can seem perfect with impunity.

Law 47

Do not go Past the Mark you Aimed for; In Victory, Learn when to Stop

The moment of victory is often the moment of greatest peril. In the heat of victory, arrogance and overconfidence can push you past the goal you had aimed for, and by going too far, you make more enemies than you defeat. Do not allow success to go to your head. There is no substitute for strategy and careful planning. Set a goal, and when you reach it, stop.

Law 48

Assume Formlessness

By taking a shape, by having a visible plan, you open yourself to attack. Instead of taking a form for your enemy to grasp, keep yourself adaptable and on the move. Accept the fact that nothing is certain and no law is fixed. The best way to protect yourself is to be as fluid and formless as water; never bet on stability or lasting order. Everything changes.

-----

Some brief comments are in order regarding the content above. Note them and take counsel. Consider what I am about to say seriously --

1) Many of the rules are in partial or complete conflict with each other - they are imperfect and inconsistent;

2) If you were to follow the guidelines as set forth above, you would be acting as a full time automaton or a totally sociopath;

3) There are no absolutes which always work; some of these tools should be used sparingly, in moderation, and shaped to conform with your natural character.

4) If you are obvious in your rigid adherence to these rules, people will tend to dislike you and see you as too manipulative and too controlled/ controlling.

5) Nothing in your commander's arsenal can substitute for good instincts, intuition, creativity and spontaneity. You must be an individual, partially of your own innate nature, and partially as a result of training and practice.

Be an original.

May your greatest objectives and achievements coincide with the agenda that best benefits all of Humankind. That "harmony of righteousness" can multiply your powers.

Proceed with caution and with wisdom.

Douglas E Castle for The Taking Command Blog

You can access Douglas E Castle's Personal Blog by clicking on http://aboutDouglasCastle.blogspot.com  


TAKING COMMAND!
by Douglas E Castle




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Thursday, December 17, 2009

Leveraging "Emerging" Adversaries: Pre-Emptive Strategies

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Leveraging Adversaries: Pre-Emptive Strategies
Written by Douglas Castle (http://aboutdouglascastle,blogspot.com/)  and first published in Taking Command! (http://takingcommand.blogspot.com/).

Dear Friends:

Hyper-conservative publishers like Robert Livingston (whose articles I often disagree with, but always enjoy reading -- I read the "lefty liberal" stuff as well as the "right-wing conservative stuff" -- this keeps me "fair and balanced" [ahem]) are increasingly pointing to China's rising prominence in the global economic arena as a threat to the United States and other industrialized western nations. Tagging China as an "enemy" is useless. Viewing China as a prospective "resource" opens up a world of possibilities. Once again, perception proceeds action.

Many supposed "enemies" can be strategically positioned as assets, instead of liabilities, if we remember the following principles:

1.    An adversary can be directed to either distract or attack your other enemies. Let them fight it out while you sit on the sidelines and sip lemonade. This requires simple rumor-mongering and baiting. It is invariably effective because it feeds every sovereign power's paranoia about being defeated, either in economic reality or in international perception. The sin of pride screams out to be used as a manipulative tool, especially when it is founded upon insecurity.

2.     An adversary can become our supplier or our customer through a purely-economically themed strategy. In either case, we can be successful in using greed (another one of those doggoned sins) to manipulate an adversary into working with us if we can demonstrate a direct economic advantage without becoming entrapped in political or philosophical debate. We can create an interdependence, or the semblance of an independence which would cause our adversary to view our commerce as an integral part of its benefits and security. That having been said, we must caution ourselves against letting the other party become a sole source provider or customer...we must quietly hedge our bet by diversifying suppliers and customers. This is crucial. we do not want to be desperately dependent -- we want to appear politely dependent.

3.     Investing in an adversary (financially and/or politically) can help us to own a piece of a possible winner, much like hedging a bet or selling a stock short. Having an adversary invest in us (preferably as an equityholder and not as a creditor in corporate or governmental debt instruments) also defuses an adversary's temptation to attack us...even if this is only in the interest in safeguarding their own portfolios and positions.

If we sense an adversary's rising to prominence, we can either attack them in the earliest stages in their demonstration of intended harm, or, failing that, we can entangle them in one of the three strategies delineated above. If we are completely successful, we may find ourselves with a trading partner instead of a threat of fiscal or physical war.

On this subject, some interesting news follows, with appropriate attribution. The tone of the article and its political implications are interesting and significant. The investment consideration being promoted in the article do not necessarily represent my views. I don't give investment advice. Nowadays, I don't request any either.

In Peace and Prosperity,

Douglas Castle
______________________________________

China’s Century: The Impending Threat to America and the Dollar

December 16, 2009 by John Myers for PERSONAL LIBERTY DIGEST
China’s Century: The Impending Threat to America and the Dollar

“India conquered and dominated China culturally for 20 centuries without ever having to send a single soldier across her border”—Hu Shih, 20th Century scholar.

We are a little more than two weeks away from the second decade of the 21st century. More and more it is beginning to look like China’s century.
It’s been 60 years since the Communists seized power. According to Fareed Zakaria, the host of CNN’s Fareed Zakaria’s GPS, “Mao Zedong dragged the country through a series of catastrophic convulsions that destroyed its economic, technological and intellectual capital.”

But in December 1978 Mao’s successor, Deng Xiaoping, gave his famous cat speech which marked the fulcrum upon which the giant nation turned. At a Communist Party meeting he urged economic development over ideology. “It doesn’t matter if it is a black cat or a white cat,” said Deng. “As long as it can catch mice, it is a good cat.”

The question three decades later is what exactly is the Chinese cat hunting? Is it cooperation with the United States and the continued development of the global economy, or is it the relentless pursuit of global power and resource wealth? All the evidence is not yet in, but what we do know seems to indicate the latter with all its chilling ramifications.

But any discussion of China has to be first and foremost about its incredible economy, for the nation has risen towards superpower status in such little time. It is an economy that has doubled every eight years for the past three decades!
Just consider the following:
  • China has foreign exchange reserves totaling almost $2.2 trillion, double the next largest holder, Japan.
  • The number of cars driven in China doubles every three years.
  • China is the world’s largest producer of coal, steel and cement.
  • Twenty of the world’s fastest growing cities are all in China.
  • China manufactures two-thirds of all the world’s photocopiers, microwave ovens, DVD players and shoes.
  • Starbucks predicts that sometime next year it will have more cafes in China than in the U.S.
  • China is the world’s second largest defense spender (behind the USA).
It’s the final item that reveals the claws in China’s carefully crafted Panda Bear self-portrait.

A 2006 U.S. Department of Defense assessment of China was chilling. According to that report the Pentagon viewed China as the next big military threat to the U.S. “There are some real concerns about China’s military modernization,” said Adam Segal, senior fellow for China studies at the Council on Foreign Relations.

Then in 2009 a report from the Council on Foreign Relations said that China has been steadily building up its strategic and conventional capabilities since the 1990s.

According to U.S. defense experts, in 1990 China had a “bare-bones” military: basic capabilities, but nothing sophisticated or top-of-the-line. But two decades of double-digit spending increases have completely changed that picture.
The Pentagon estimates China’s total military spending for 2007 to be between $97 billion and $139 billion, as compared to $52 billion reported by China.

According to the Council on Foreign Relations most of that spending has gone to building a sophisticated, modern military: a large, increasingly capable fleet, an air force stocked with Russian warplanes, and technical strides which have improved China’s ballistic missile arsenal, as well as satellite surveillance, radar and interception capabilities.

“(U.S.) Hawks insist that the Chinese are seeking to drive the U.S. military out of the Pacific, and make it Beijing’s lake rather than what it has been for decades, an American pond,” said Time Magazine in an April 2009 issue.
China is constructing a nuclear aircraft carrier with a lethal and global reach to support its growing fleet of technologically advanced nuclear submarines.

Why is Beijing arming itself to the teeth? Perhaps for global dominance. Perhaps just for the natural resources it needs to sustain its growth: Core among them being oil.

This year Asia will have consumed about 50 percent of Middle East exported oil. China understands it might have to count on its military to lock-in future supplies.

That could mean another arms race or worse. That is something the U.S. can ill afford.

Another Golden Empire

China is also arming itself with gold.

According to the China Gold Association, Chinese demand for gold could total more than 16 million ounces this year, up from 12.9 million ounces in 2008.

China has also become the world’s largest gold producer, having surpassed South Africa in 2007.
“China is likely to become the number-one supplier and consumer of gold this year,” said Rozanna Wozniak, investment research manager at the World Gold Council.

On Nov. 31, China’s Economic Information Daily published remarks by a senior Chinese official indicating that Dubai’s debt crisis could be a good opportunity for China to purchase gold and oil assets.
Ji Xiaonan (Chairman of the Supervisory Committee overseeing large state-owned enterprises) was quoted as saying that the Dubai debt crisis "could give China an opportunity to put some of its foreign exchange reserves into gold or oil."
Just two weeks ago Ji Xiaonan said that China should increase the amount of gold it holds in reserves to reduce potential losses from a depreciating dollar. Currently China has relatively small gold reserves, just 1,200 metric tons or about 7 percent of the world total.

But Ji Xiaonan wants to change that. He wants China gold reserves to reach 6,000 metric tons within three-to-five years and possibly to 10,000 metric tons in eight to 10 years. (Ten thousand metric tons represents 350 million ounces of gold or about four years of global gold production.)

Money is Not a Problem

China has a lot of money to invest in gold and other real assets. It has foreign currency holdings of $2 trillion which include $800 billion in U.S. Treasury debt. With that kind of dollar exposure it is little wonder that China wants to increase its gold reserves 10-fold.
This will be an unprecedented national build-up of official gold reserves (in fact for the past 50 years most nations have been net sellers of gold). China’s radical increase in its bullion reserves is likely a harbinger for much higher prices for the Midas metal. How high is anyone’s guess, but I wouldn’t be surprised to see gold above $1,500 by next spring.

Action to take: Don’t be surprised by a correction in the price of gold going into January. I think that over the very short-term the bull is tired. Over the long-term the bull market in gold is very much alive. I recommend you use any correction to add to your physical gold holdings in anticipation of considerably higher prices in 2010.

Yours for real wealth and good health,
John Myers
Myers’ Energy and Gold Report

_________________________________________________

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