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Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

 
BullionDude
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04/16/2021 09:41 AM
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Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
In 2018, the Chinese launched a gold-backed, yuan-denominated oil futures contract. These contracts were priced in yuan, but convertible to gold, raising the prospect that “the rise of the petroyuan could be the death blow for the dollar.”

Two weeks ago, The IMF reported that the global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data released today. This matched the 25-year low of 1995.

And just last week, China became the first major economy to unleash a Central Bank Digital Currency, "cementing its trailblazer status in virtual currencies far ahead of other countries, after already recently experimenting with large-scale trials of actual payments by consumers, which was met with mixed results."

Also last week, Peter Thiel warned "Bitcoin should also be thought [of] in part as a Chinese financial weapon against the US... It threatens fiat money, but it especially threatens the U.S. dollar."





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BullionDude  (OP)

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04/16/2021 11:19 AM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
With all its gold, by monetising it China could kill off the dollar tomorrow. Undoubtedly, this financially nuclear option has become a backdrop to her strategy in the ongoing trade and financial war against America. But the idea that by using this undoubted power over the dollar China gains a simple victory if through her actions the dollar is destroyed understates a more complex situation. It is not in China’s interest on many levels, not least because of her ownership of dollars is about $3.4 trillion, of which only $1.5 trillion is invested in Treasuries, agency, corporate and short-term debt in the US. The balance is actively used in loan finance to China’s commodity suppliers, those involved with the belt and road initiatives and other states with which China desires to gain influence.

Destroy the dollar and China’s heft around the world is destroyed as well, because only a small proportion of China’s loan-influence is in renminbi. In that sense, if the dollar collapses America gains a geopolitical benefit over China, her means of international influence being crippled. The Chinese leadership will be acutely aware of the consequences of the dollar’s demise and therefore will do nothing to encourage it. Indeed, if the dollar begins its collapse in the foreign exchanges, we could find China increasingly calling out the Fed on its inflationary policies. But then the Fed’s problem is and will continue to be an inability to stop its addiction to unlimited inflationism.

Unfortunately, a banking crisis is embedded in the script, which will have fundamental effects on all fiat currencies, some more than others. And since international banking is overwhelmingly a dollar affair, after a short pause the consequences are bound to weigh heavily upon it as the reserve currency. This credit cycle unwind is a Category 5 compared with 2008—09’s Category 2 or 3. It is only after such a cataclysm that China will have no alternative to abandoning all attempts to support the dollar and its means of buying overseas influence. China will then need to secure its own currency.

It will require a return to gold backing — the nuclear option so far avoided. While the cost will be writing off trillions of dollars and its means of securing overseas influence, there will be a monetary vacuum to fill. And compensation will be found in an increase in the value of China’s declared and undeclared bullion stocks, as well as the enrichment of its gold-holding people.
Anonymous Coward
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04/16/2021 11:20 AM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
I hope China continues to fuck over the Central banks. Its funny watching the Gheews squirm.
Anonymous Coward
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04/16/2021 11:22 AM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
Chinas centeal bank isnt connected to the Gheew banks. Its fun to watch the Gheews stew in thier anger.
Hard Eight

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04/16/2021 05:40 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
China opens its borders to billions of dollars of gold imports

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2013-Gold
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BullionDude  (OP)

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04/16/2021 09:42 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
China opens its borders to billions of dollars of gold imports

[link to www.mining.com (secure)]


2013-Gold
 Quoting: Hard Eight


Thanks for posting this. Great read for us Gold/Silver tards.
Anonymous Coward
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04/16/2021 10:10 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
I have my entire life's wealth in Physical Silver. I care not about the value of the current paper debt dollar. Just waiting for the new money that replaces the one we use now.
Anonymous Coward
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04/16/2021 10:37 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
The problem is debt, that has entirely distorted the economy because it was used mostly for speculation. That's why the markets are at all time highs, it goes with the record bond bubble.

Their currency may be successful but a lot of their economy has been leveraged. I assume when the payment is finally due the CCP will take it out on the citizenry, happens most of the time.

We have to let all this leverage collapse, liquidate it in bankruptcy then allow prices to find equilibrium with demand and each other.
(**)(**)

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04/16/2021 10:42 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
There have been rumours for years that China has in excess of [10-20],000 tonnes of gold. The US alleges to have 8,000 tonnes of gold - but no one believes them!
BullionDude  (OP)

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04/16/2021 11:52 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
There have been rumours for years that China has in excess of [10-20],000 tonnes of gold. The US alleges to have 8,000 tonnes of gold - but no one believes them!
 Quoting: (**)(**)


We need a “you show me yours I’ll show you mine” moment to see who’s swimming naked!
Anonymous Coward
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04/17/2021 07:10 AM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
I hope China continues to fuck over the Central banks. Its funny watching the Gheews squirm.
 Quoting: Anonymous Coward 78400477


Squirming with delight... considering they own China. I guess you just can’t figure that one out. But while you are scratching your head at shit too hard to fathom...
(((They))) are literally making trillions out of the whole process.
Anonymous Coward
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04/17/2021 07:19 AM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
zerohedge always wrong. go ahead and try to convert even one yuan into gold. betcha cant do it!!!!

epiclol
BullionDude  (OP)

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04/17/2021 04:31 PM
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Re: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion
zerohedge always wrong. go ahead and try to convert even one yuan into gold. betcha cant do it!!!!

epiclol
 Quoting: Anonymous Coward 33122469


in the near future not now!





GLP