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Gold At $64,000 – Bloomberg’s ‘China Gold Price’
Gold At $64,000 – Bloomberg’s ‘China Gold Price’
- Bloomberg Intelligence suggest gold-backed yuan see gold at $64,000 per ounce
- “Chinese gold standard would need a rate 50 times bullion’s price”
- As China-U.S. relations deteriorate, gold-backed yuan possible
- Dollar and financial and monetary dominance of U.S. at risk
- U.S. and China war of words continues to escalate
- China rejects U.S. hegemony in Southeast Asia
- Currency war to escalate
If China were to partially back its yuan with gold it would require a gold price of $64,000 per ounce, 50 times gold bullion’s price today, according to a recent article from respected Bloomberg Intelligence.
It seems like an outlandish forecast. However, as tensions between the U.S. and China continue to escalate such a scenario is not actually as implausible as it may first appear.
If China were to back its yuan with gold it would require a price of $64,000 per ounce according to a recent report from Bloomberg.
While Bloomberg give no details as to how they arrive at this figure, our “back of envelope” calculations would confirm that at its current value relative to the dollar the yuan would indeed require gold – priced in dollars – to be priced in the tens of thousands of dollars.
Chinese M1 money supply is roughly 33.64 trillion yuan which at todays exchange rate equates to around $5.4 trillion.
Bloomberg conservatively estimate China’s gold reserves at around 3150 tonnes although many analysts believe the figure to be much higher.
In order to back $5.4 trillion yuan with 3150 tonnes of gold, the gold price would need to be in the region of $48,600 per ounce.
Bloomberg conclude that, at today’s prices, it would be “basically impossible” for China to fully back its yuan with gold. Indeed, at $1,200 per ounce, it would require over 126,000 tonnes to back $5.4 trillion.
Bloomberg states that “there’s no evidence” that China seeks to adopt a traditional gold standard. However, China’s appetite for gold in recent years has been voracious and it is clear that they and the People’s Bank of China (PBOC) place great strategic importance on the precious metal.
The Chinese have been quite overt in recent months in their ambition to establish the yuan as a rival reserve currency and it is likely that they intend gold to play a role in that ambition.
If China were to even partially back its currency with gold it would gain further favour across the world as a reliable reserve currency when viewed against the increasingly debased U.S. dollar. In order to maintain some semblance of credibility the U.S. would likely be forced to follow suit.
For the U.S. to back its gargantuan M1 with its stated, and almost certainly grossly overstated, gold reserves of 8,500 tonnes it would push gold prices to multiples of their current price.
There has been a definite heating of tone in the war of words between the U.S. and China in recent months. Only this morning, the Wall Street Journal reports on how details of 4 million federal employees were hacked in April. While the FBI have not directly accused China, the WSJ suggests that China is the prime suspect.
At the end of last month a Chinese state-controlled newspaper stated that if the U.S. continued to interfere with its activities in the South China Sea, war was “inevitable”. China are clearly not intimidated by the prospect of war with the U.S.
China rejects what it sees as U.S. “meddling” in South East Asia. At last years APEC conference, China’s president Xi had President Obama pointedly placed at the peripheries of the stage for the official photograph. President Putin was by his side. The message was subtle but quite clear – China views the U.S. as a peripheral nation in Southeast Asian affairs whereas Russia is at the centre.
If tensions continue to escalate – and with that the prospect of a “hot war” as recently warned of by many including George Soros – each side will seek to weaken its rival in a variety of ways. In January, Russia’s Prime Minister Medvedev stated that if his country were cut out of the SWIFT system, the “Russian response – economically and otherwise – will know no limits.”
In the event of an escalation in economic warfare it seems obvious that the achilles heal of the U.S. is the dollar and its erstwhile global reserve currency status. Many analysts believe that China would be reluctant to sink the dollar given it would undermine the value of their vast holdings of U.S. Treasuries and foreign exchange reserves.
However, there will be a tipping point where the advantage to be gained by badly impacting the dollar and positioning the yuan as new reserve currency will be greater than the disadvantage suffered by a collapse in the value of the dollar.
The tipping point is closer than many believe.
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Yep, gold at $64,000 and BIC Lighters at $53.....
well who says the chinese have only 3150 tonnes of gold?
what's Bloombergs agenda here?
With a name like Bloomberg, you should know it's to sucker as many folks as possible. That means another leg down in gold price. Maybe, very short lived below $1000.
The word game being played here involves the word 'backed'.
In the gold standard countries promised gold for paper. They 'needed' a certain amount in case there was a panic into gold...but gold and paper were claimed to be equal.
The ECB has a different approach. They simply hold gold (10,800 tons of it!!) on their balance sheet. In this way the world can decide how much the Euro is worth by deciding how much gold they will pay for a Euro. This is a more elegant way to have gold in the monetary system and yet not limit the currency with the need for a semi-rare metal.
It also allows the Euro's balance sheet to expand if the dollar dies. At that point gold would have a high dollar price and the ECB balance sheet would rise enormously in dollar terms. Their treasuries might be worthless but their gold would still 'back' the Euro.
Having gold on you balance sheet and actually having the gold, are distictly two different things.
that's exactly what I was just thinking, China can say they have a lot of gold, but unless they let people inventory it and make sure it isn't lead filled, I am not believing it. History shows us that commies are good at lying.
China has been refining all their gold
into 9999 kilo bars ..
been there done that....
?You mean, commies like the USSA government?
The ECB does audit their gold. Lasvegas is right.
The ECB floats gold on the asset side of its balance sheet at marked to market prices.
http://fofoa.blogspot.ca/2011/07/euro-gold.html
Better figure in all the precious metals that the yaun is minted in, but the real question is will the Bank of China also do Uranium 235 and Plutomium (although I consider these expendable commondities and then the clean up cost of using such), but I do think that Silver is not out of the picture and the other semi-expendables such as Titanium, Tungstun, etc can also be considered, thus pushing the gold value down. It would be interesting even if the yaun is only 10% gold backed.
it doesnt matter of everything gets "re valued up or down" or gold goes through the roof, the metal will hold ultimate value either way & its still your best hedge against "anything paper or electronic" ( all suedo money ).
Paper is for wiping your arse on,
Electric is for the wifes iron,
Gold is for storing value...
a friend of mine is holding $30,000 in cash at his home in a shoe box. I have been after him to buy silver or at least gold necklaces for his wife but not yet. I finally told him if he is going to hold it in cash at least make it $1 bills. He gane me a funny look and asked why, I told him he would have lots of toilet paper just in case.
Your friend told you that there is $30,000 cash, specifically in a shoe box, in his home? Either you hang out with the dumbest people on the planet... or you are making this up.
he is a black belt and 20 year vet of the airborne rangers, his son is a golden gloves boxer and they are heavily armed. but, yeah, I wonder about their intelligence.
definitely bullshit then.
Unfortunatley, paper/electric fiat is also for paying the morgage, truck payment, groceries, diapers etc. Its a crappy situation. I know Fiat is doomed so want to hold AU/AG, but cashing it in at this time of refinancing my home can save the family hundreds per month, and make a 5 year pay off very realistic.
If we hold the AU/AG and within 5 years it skyrockets we can pay off the mortgage by converting a few ounces.
If the economy tanks and AU/AG dont skyrocket, I could wish I had gone "all in" and pushed that mortgage lower than the trcuck payment, let the truck go "repo" and do whatever it takes to keep the home.
upvote to hold my AU/AG, down vote to cash it in an have a $575 per month 5 year payoff mortgage.
To us it looks like the the elite will supress the price of metal until the very end, or we have another 1933esque executive order to turn it in, and then overnight its revalued at $40-64k per oz to back the "new dollar."
Or
Will Jade Helm just sort it all out for us and we ZHeads are off to "Camp Arbiet Macht Frei" anyway?
I would buy my G, and pay your house off slower, with devalued dollars.
Every year the Fiat loses more of it's purchasing power but the bank has agreed to accept it at the same value yoy to pay your mortgage, so the bank loses.
On the other hand, if the economy really goes for shit and you lose your job and cannot pay your mortgage, it may not be the way to go.
How much faith do you have in the system?
Hmmm...
I say hold some PMs!
When the 'price' recently was smashed again, I picked up some Canadian Au.
LC says:
Keep Stackin'
Keep Packin'
piling
is the new stacking ...
So if the yuan revalued not totally gold backed but rather as basket of commodities, what percentage of that basket would gold represent?
Maybe 30% plus or minus say 10%??
Its my understanding that the IMFs SDR cannot ever have gold. Only paper currencies.
You really think the chinese are going along with IMF, WB or any western banking initiatives when global banking is in flux at the precipice of failure??
Whatever mr. global was planning for china's future role while transferring industrial power from west to east, is now out of mr. global's hands.
Watch closely, china is about to set its own golden course to the future despite mr. global's plans and manipulations.
But IMF Ranks as #3 Holder in the world by Tons of Gold
#3. International Monetary Fund, 2,814.0 Tons of Gold
https://en.wikipedia.org/wiki/Gold_reserve
Also notice the private banking industry/funds have increased holdings of Gold for Investors... greatly increased, big trend.
True because the SDR is just a basket of FIAT!
Yes exactly. This is also a dilema. Holding bullion, then needing to use it. Having a way to use it. Do you convert to currency to spend some, or use actual gold bits. Context will determine I guess.
Govts can also control taxes and exchange of bullion through legislation.
I think a good way to also own gold as a hedge against govt controls on bullion exchange at the domestic level is to also have shares in a quality low debt low cost gold miner. But of course I think at some stage all shares will crash again, so cautious about buying in too soon. Though I have an excellent candidate lined up.
My exact thoughts.
I have made several small purchases of 1g "bars" especialy for gifts.
Whole sheets of these are available for not much more than the ounce price.
Each little bar is like $50 (except it will never lose value like a $50 bill)
That's why you hold silver as well as gold. Pay for that expensive item in gold and get given change in silver.
Which is exactly what they did 150 years ago. And copper too for the lowest denominations.
My suggestion - buy gold only after you have some silver stashed away.
And buy copper water pipe/fittings and lead ammo in a popular size too. 22LR is the most popular size and still dirt cheap.
22 Longs "still dirt cheap"? Where?
I have not seen any in the stores for 4 years, except in some backwoods hole in WV.....
"Crazy John" had a gleam in his eye as I asked how many cases he had left.....The place was bristling with guns, every kind imaginable, even when every gun shop in the nearest 4 states to me was empty..... I even took pics to show my friends! That sold me on WV in a heartbeat....they already had so many guns per capita, that there was no reason to panic buy.
And how many pounds of silver do you recommend before purchasing gold?
P.S., Am I on the NSA watch list now?
http://www.patriciabriggs.com/articles/silver/silverbullet5.shtml
a kilo of silver
and an oz of gold
worth about 2 thousand bucks now
seems like a nice ratio..
were all on the nsa watch list
I haven't seen any 22lr (besides subsonic) for a while. I was in ohio a few months back and found a box of 22lr. You can get it but it's a lot more expensive than it was before the ammo scare.
I kinda think gold is near its bottom, having been holding at this level for so long and always bouncing back from hits.
So $1000 to $1200 is probably the floor, with lots of up room to refill that $1900
And of course any hits to the confidence in currency or banks or major countries...then gold price can be anything.
Once a panic sets in the dominoes fall, all rush to get hands on 'real' money before its gone may well pay anything, than have money in a failed bank or currency.
If gold went a long way down it would be bought up so fast that it wouldn't go down so far before rebounding.
Sub $1000 gold would see mines shut down, supply reduced, strong hands holding and anything availble bought up very quickly.
'They' whomever they are if they have a do or die interest in having a low gold price may well try to smash gold down to reduce confidence in it. However since gold is by now in strong hands, and the hands of those afraid, I don't see much be shaken lose. And with the China gold exchange around, those knocking down the Comex price of gold too low would so all business go to China.
Sub-$1000 is within reach. Then, a bunch of NYC MSM stories about the death of the gold bug, right at the bottom of course.
Gold has been stuck at around $1200/oz for some time now. Either it is the result of a titanic tug of war between bulls and bears or it is being held in that region by certain powers that be. My guess is that this situation will change once we see the Fed try to raise interest rates....and fail. This should be the catalyst for a buying surge. Sometime in the Fall? Or I could be completely wrong and the economy truly is on a path to recovery and interest rates will be able to rise naturally. And the Congress could be full of upstanding lawmakers with the interests of the common man at heart.
TPTB have been trying to smash gold for decades but the recent several years their efforts are as great and obvious as ever. They do it openly now so you have to ask why? I think it as low or near as low as it will ever get. There will be a time where the price of gold and silver will be disconnected and there will be opportunities to take advantage. But the Chinese don't need to back their currency 100% with gold anyway. They can use a fractional system. Not everyone who trusts they system will want to hold gold when they are assured that if they take their paper money to the bank they can get gold just like before the FED came a calling. It will still need to go up but 48k or 64k is way too high IMHO.
It will still need to go up but 48k or 64k is way too high IMHO.
It's called relativity. Give up this idea of a dollar being a dollar. The dollar will fluctuate in price - not the gold. Gold won't be repriced in dollar terms it will be the dollar that will be repriced in gold terms.
48k.... 64k... who the fuck knows? It may well be $69 quadrillion dollars an ounce before it's all over.
.
"f China were to back its yuan with gold it would require a price of $64,000 per ounce according to a recent report from Bloomberg.
Chinese M1 money supply is roughly 33.64 trillion yuan which at todays exchange rate equates to around $5.4 trillion.
Bloomberg conservatively estimate China’s gold reserves at around 3150 tonnes although many analysts believe the figure to be much higher.
In order to back $5.4 trillion yuan with 3150 tonnes of gold, the gold price would need to be in the region of $48,600 per ounce.
Bloomberg conclude that, at today’s prices, it would be “basically impossible” for China to fully back its yuan with gold. Indeed, at $1,200 per ounce, it would require over 126,000 tonnes to back $5.4 trillion. "
1. Unofficially, as in not yet announced, China now hold around 30,000 tonnes of gold reserves, far exceeded the amount of ~20,000 tonnes when USA was at it peak.
2. So, we all agreed that it is not possible to have price of gold at $48,600 per ounce. So what does this mean if China still want to back its Yuan with gold? It can mean only ONE THING, ONE WAY, and that is for gold price to go down down down down under $50(based on today US greenback fake value) per ounce while at the same China continue to acquire and accumulate as much gold as it can but will not be anywhere near the said 126,000 tonnes!
Well, never say never, but if given a 3 year window frame, it is possible for China to by then hold 60,000 tonnes of goldies. The mentioned 3 years time frame is also when President Xi's Silk Road network is expected to reach over 80% of its completion and well into major operations between the entire Eurasian continent that stretch from Britain in the West across and down to Singapore in the East.
In 3 years time, USA will live in the most interesting time in its history.
Very soon Russians and Chinese will be start their currencies with gold. And all the world will be very surprised how it be.
Grandmaster Putin's Golden Trap (Part III)
Only the Russian language, I'm sorry.
You people are fools.
You want gold to be pegged by 'fixing' it's price to a State Currency ?
Hilarious , I suppose you would even actually trust Russian or Chinese gold certificates and not convert it straight away ?
Gold does not work well as an international form of money , it may have worked very well in the days of sailing ships but we are way more advanced than that .
Claro. Many articles I have read say they are quite near 30K; they are also buying gold mines everywhere. I just left an African country where they were working an Au mine. They rotated out every 3 mos.
That's the key. They are buying up the mines. Not bitcoin mines, either.
The biggest bitcoin mines are already located in China
How does the chinese curse go, 'May you live in interesting times.'?
If gold ever reaches this astronomical price ($64,000), the amount of dollars needed to live a normal life will also skyrocket. Thus, it is important to remember the wisdom of owning the precious metals (i.e. real money)... they MAINTAIN their value and cannot be counterfeited into existence. So don't let your eyes bug out with greed when you see "gold at $64,000". At that point, it will cost $200 for a loaf of bread (if dollars are even still used as currency). But, if you have the PMs in a tradeable form, you'll still be able to trade them for an equal amount of goods as today.
About that 'tradeable form'...Don't neglect gold jewelry. Sure, it isn't a coin or bar, and purity varies, but jewelry is definitely a tradeable form.
Today I got 2 antique 14k gold charms, total weight 9.5 grams. They were in an old dollhouse I just bought, being used as dolly 'knickknacks'. The house cost me 20 dollars, and came full of nice miniatures...
So, for 20 bucks I got a dollhouse full of minis, and over 300 dollars worth of gold. (Though the charms are even more valuable as charms...real nice too, a moveable traffic light, and a tiny working safe...)
I'd definitely be able to trade those...
well spent
fiat funnie money
enjoy
gold sucks as a global reserve money. Bitcoin is far superior in today's world.