It's simple

China knows there's going to be a huge correction in gold and silver prices in the near future. As such, they have been aggressively getting their people to buy as much as possible. They have even opened their own commodities exchange in Hong Kong so their people can buy the stuff in Yuans rather than exchanging it for dollars. Now what do you suppose is going to happen when 2 to 3 hundred million Chinese with some precious metals are on the receiving end of this wealth transfer? They're going to go from poor to middle class overnight. As such, they'll want to live in middle class housing rather than hovels and basements. As such, I see the Chinese government getting these new homes in place ahead of time. Let's face it, you're dealing with a society that has existed for thousands of years. They know how to think long term. We don't. Long term for us is the next election cycle.

China's maneuver could easily double their country's money supply at 0% inflation and create a huge new consumer base to sell their stuff to at Wall Mart. From there, they could easily just dump the US Treasury Notes and tell the Americans where to get off and there won't be anything the Americans can do about it.

Paul