Mrs. Lee, the traditional Chinese housewife buys gold now more than ever. Similarly, Mrs. Tanaka in Japan is doing the same, and Mrs. Rangan in India has been doing it for centuries. Aren’t you curious to understand why?
Mrs. Lee was born and raised in the most populous and largest country in the world, and one of the oldest too. Since 1949, after a civil war and a war with its greatest rival, Japan, China became a single-Communist party state ruled by an Iron hand. Today, the Iron grip loosened, but still the Great Fire Wall exists and language barrier isolated the Chinese society from the western society. The economic state of China is the same as any communist state, dividing the people into poor peasants and a rich government.
It wasn’t an iron wall like that of the USSR; some Chinese emigrated in waves through modern history to the U.S. since California Gold Rush till today, passing through the waves in the 70’s and 2000’s. They came out of the mainland seeking a better opportunity in the western job market.
This is not a debate about communism and its social impact or China’s economic performance; we are merely trying to understand why Mrs. Lee buys gold and why now.
Here is something: whenever and wherever the people are facing financial problems, they buy or sell gold according to their needs. No one can eat gold, but it could buy me what money can’t buy during inflation or deflation. Plus, gold is a key to all gates and a universal language. We inherited these habits from our ancestors.
Back to Mrs. Lee, she saw an opportunity when gold prices dipped last month a considerable amount. She spent her savings in bank accounts and fiat money in exchange for the precious yellow metal. She saw, even if she didn’t say it out loud, that not only her government doesn’t deserve her trust, but the whole monetary system is crumbling. She did what any wise housewife would do; hedge her hard-work and hard-earned savings with something she can trust, PHYSICAL GOLD. She bought jewelry and her husband, Mr. Lee, bought gold coins and gold bullions.
Women have always been clever economists; they were the ones that rebuilt Germany after WW2, they were the support and backbone of the American Revolution, and they were the ones who won the war in the U.K. against the daily bombing while there men were away fighting on the frontlines.
A piece of advice, she is a better model I’d follow and trust rather than a Wall Street broker or a news anchor. She experience everyday world problems firsthand and lives to tell the tale.