The next big driver of gold's bull market – China's middle classes

There have been three main drivers to the secular bull market in commodities, be it copper, crude oil, or corn. First, a chronic lack of investment throughout the bear markets of the 1980s and 1990s has led to a shortage of supply. Second, this shortage of supply has come just as eastern Asia, particularly China, is modernising and rebuilding its infrastructure. And, third, our modern fiat system of money and credit makes inflation and speculation inevitable, especially when it is subjected to the insanely loose monetary policies of our central bankers. Generally speaking, most people cite driver number two, China, as the reason for the rise in the price of raw materials – base metals, grains, energy – the commodities that are being consumed voraciously as China's middle class grows. Gold, on the other hand, we are told, is rising mainly because of inflation and fears 'about the system' – driver number three. But what if you took 'driver number two' and applied it to gold? What if the Chinese middle class all wanted gold?