For as long as anyone can remember, India has been the largest gold bullion buyer. But, for 2012, China may overtake it. In 2011, gold bullion demand in China surged 20% to 769.8 tons, while in India, demand dropped slightly, to just over 933 tons (Source: Asia Today , February 17, 2012). Another 20% or so run up in demand for gold bullion in China this year and it could easily overtake India as the largest buyer of gold bullion. Over the last few years, the government of China has created television ads encouraging its citizens to buying gold bullion. In 2011, China introduced its first ATM gold-bar vending machine. The country is rolling out 2,000 of them. The machines update the price of gold bullion every 10 minutes, and people can exchange their currency for an equal value amount of gold bullion. There is no question that China’s central bank has put its money where its mouth is. It is not only encouraging citizens into buying gold bullion, but, in terms of central banks around the world, it is the largest purchaser of gold bullion. It is important to note as well that, in China, which is true for citizens in most Asian countries, buying gold bullion is seen as a protection against economic turmoil, inflation, and the debasement of currencies. I’ve been talking about the fact that, in China, along with other countries in Asia, the people have experienced the textbook definition of inflation. That is food prices, commodity prices, and real wage inflation; where the general prices of everything within their economies have gone up over the last few years. Historically, these nations have experienced many currency depreciations and collapses, where often their money can buy a lot less than what it could just days before. Because of these experiences, the people of the East view buying gold bullion differently than the people here in America. Therefore, when the average Chinese citizen sees inflation rampant everywhere, they know from stories passed on to them that it is time to be buying gold bullion. This is reflected in comments by the central bank of China itself, which stated that it is basically buying gold bullion because it is the only hard currency in the world. It is any wonder then that many expect China to become the largest buyer of gold bullion in 2012? While there are those who continue to proclaim that gold is in a bubble, the people of Asia—with China leading the way—are buying gold bullion in record amounts, as they seek to protect themselves from inflation. Couple this with the fact that Asian central banks continue to be the largest …