US Is 'Practically Owned' by China: Analyst
Published: Monday, 27 Sep 2010 | 6:08 AM ET
By: Antonia Oprita
CNBC.com
The US supremacy as the top world economy will end sooner than many people believe, so gold is a better investment than the dollar despite it hitting a new record, Tom Winnifrith, CEO at financial services firm Rivington Street Holdings, told CNBC.com Monday.
Gold [XAU=X 1347.25 4.00 (+0.3%) ] hit a new record high Monday and silver [XAG=X 23.2 0.01 (+0.04%) ] rose to another 30-year peak as investors were worried about the dollar weakening further after the Federal Reserve hinted at more quantitative easing last week.
The US trade deficit and debt continue to grow and the authorities are reluctant to address the problem, preferring to print money, Winnifrith said.
"America is practically owned by China," he said.
He reminded of the fact that in 1900, sterling was the world's reserve currency but by 1948, that was no longer the case as the British Empire collapsed.
"America is doing what Britain did," Winnifrith said. "America spends much more than it can afford and it's not addressing the issue."
In 1832, China and India were the world's two largest economies and by 2032, they will regain that status, he predicted.
"The 200 years when Britain and the US were the top two economies were an aberration and that will change," Winnifrith said.
"The decline of empires has happened much faster than folks think. I believe that gold will be a far better bet in 20 years than the dollar," he added.
