The Quiet Revolution: Gold's Monetary Rehabilitation Is Building

Authored by Alasdair Macleod via GoldMoney.com,

There is a quiet revolution taking place in the monetary vacuum that’s developing on the back of the erosion of the dollar’s hegemony. It is perhaps too early to call what’s happening to the dollar the beginning of its demise as the world’s reserve currency, but there is certainly a move away from it in Asia. And every time the Americans deploy their control over global trade settlement as a weapon against the regimes they dislike, nations who are neutral observers take note and consider how to protect themselves, “just in case.”

Vide Europe over the Iran issue. And Turkey. These are rifts in NATO. Countries in Africa, and elsewhere are now taking China’s money. And to please the Chinese, Gambia, Burkina Faso, Panama and the Dominican Republic have all recently severed diplomatic relations with Taiwan. Small fry perhaps, but a weathervane showing which way the wind is blowing.

We’ve seen Russia set up an alternative to SWIFT in order to be free from American monetary interference in pan-Asian trade. We’ve seen China take major steps to exclude the dollar from her trade as much as possible and to enhance the role of her own currency. And now we have a schism over Iran between America and the Europe it set up after WW2 through the mechanism of the CIA-controlled American Committee for United Europe in 1948.

It is unprecedented, and today America obviously cares less for her relationship with European allies than she hates Iran. There can be little doubt that America’s undeclared war against the land of Omar Khayyam is intended to undermine its economy and create the conditions for internal revolution. The Iranian rial has continued its collapse, and the theocratic government has played into US hands by shutting down “unauthorised” money-changers, with Grand Ayatollah Nasser Makarem Shirazi calling for the execution of money changers to help end the currency crisis. The black-market rate for rials has rocketed as a result, and according to Professor Steve Hanke whose department at John Hopkins University makes a study of these things, the true rate of price inflation has jumped to 74.8%.

For the ordinary Iranian, gold has always been the ultimate money, while their government’s rials are to be rapidly passed on to someone else. America’s sanctions and the government’s actions merely reinforce that message. Time will tell whether America’s attempt to undermine Iran’s theocracy succeeds, but history suggests it is unlikely. And at a national level, Iran is driven by American actions into accepting anything but dollars in payment for her oil exports. She would like euros, and given the EU is still trying to sell her capital goods, that makes sense. But no commercial bank dares facilitate payment in any currency under the threat of US sanctions and penalties.

That leaves only three possibilities beyond America’s influence: Chinese yuan, Russian roubles, and gold, all independent from the West’s banking system. It is no wonder the new yuan for oil contract in Shanghai, perhaps with a little help from China’s state-owned banks, has got off to a roaring start. We can all understand the desire to lock in oil prices for future delivery, in this case it is in return for yuan issued by the People’s Bank of China. However, in the future Iran will be able to spend the bulk of her yuan on other raw materials, using a range of yuan futures contracts as a bridge to them from her oil.

Essentially, US sanctions are forcing Iran onto a yuan standard for her foreign trade. Furthermore, China is there to pick up the pieces the West abandons because of American sanctions, driving Iran into an increasing dependency on China. The new Silk Road, the Chinese-built 200kph railway between Tehran and the eastern city of Mashad, as well as other Chinese-led rail projects are opening up Iran in a purely Eurasian context, marginalising American power. Iran’s problem with this, if there is one, is international yuan markets are not yet developed enough to make full use of hedging instruments. But Iran’s demand for sophisticated financial tools, as well as from other nations in Asia turning their backs on America, is bound to hasten their development.

I have written several times in the past about the importance of yuan-denominated deliverable gold futures in this context, and the evidence that the two markets offering these contracts, Hong Kong and Dubai, are cooperating in establishing additional vaulting facilities in China, roping in other gold centres in South-east Asia as well. In the case of gold, where physical delivery measured in tonnes is tight, the Chinese are ensuring as far as possible that deliverable liquidity will be there.

Additionally, last week the London Metal Exchange, owned by the Hong Kong Exchange and Clearing (HKEX), admitted it is considering introducing yuan contracts for base metals as well. We can safely assume that while the HKEX is an independent commercial entity, its strategic objectives are closely aligned with and encouraged by the Chinese government. Not only do the Chinese dominate gold markets in Asia, but last year HKEX successfully introduced regulated precious metal contracts in London. There can be little doubt that HKEX will be an important platform for expanding international markets for the Chinese currency. And at some time in the future, a state like Iran will be able to use not only yuan contracts to sell commodities in order to buy other commodities, but to use them as a stepping-stone to mobilise state-owned gold for payments as well.

Our topic is now moving on to gold being actively used as money instead of fiat currencies. While this point is not yet being considered by Western commentators, we can be sure it is by the forward planners in Asian governments. It’s not for nothing India is trying everything to get hold of its citizens gold. To an extent, gold is already used as money by governments, which is why they are still included in monetary reserves. But they are there as a backstop, the money of last resort, no one’s liability. What we could be seeing with the development of international yuan currency markets is a platform that links the use of gold to trade settlement.

This insight means we must look at both the Chinese and Russian policies on gold in a new light. Assumptions in the markets seem to be that China and Russia only see gold as a dollar hedge, or alternatively their accumulation of gold is either to balance the US’s holding of 8,133 tonnes, or alternatively (if you believe the American’s are lying about their reserves) Chinese and Russian gold is there to be used like a sword of Damocles held over the dollar. It would be wrong to dismiss these theories out of hand, but surely, they miss the point. You don’t carefully plan to become a dominant world power, edging out the Americans and their dollars, without careful forward planning of monetary affairs.

There is irrefutable evidence that China has been planning for a post-dollar world since shortly after her leadership threw in the towel on communism and embraced free markets. The regulations appointing the People’s Bank with sole responsibility for gold and silver date all the way back to 1983, since when we can confidently assume the PBOC has quietly accumulated gold on behalf of the state at prices that varied between $250-500 over a nineteen-year period. We know this, because in 2002 the PBOC then permitted private ownership, setting up the Shanghai Gold Exchange to facilitate physical acquisition. This would only have happened after the state had had a clear run at accumulating sufficient physical gold for its future purposes. And, as the largest gold mining nation for many years by far, with state monopolies in refining domestic production, recycling scrap and refining imported doré, there should be no doubt over her policy towards her accumulation of gold bullion.

Since 2002, the Chinese government has actively encouraged its nationals to accumulate physical gold and judging by net withdrawals from the Shanghai Gold Exchange vaults, the public possesses roughly 18,000 tonnes from more or less a standing start. My estimate for state ownership of bullion, based on contemporary prices, an analysis of capital inflows in the 1980s, followed by trade surpluses in the 1990s and before the public were permitted to buy in 2002, is approximately 20,000 tonnes. Even so, that may be not be enough gold bullion owned by the state at current prices to operate a simple gold exchange standard, being the equivalent value of ¥5.22 trillion, compared with currency in circulation of ¥7.15 trillion. For comparison, when President Roosevelt devalued the dollar to $35 in January 1934, the US Treasury held gold worth $7.44bn at the new price against currency in circulation of $5.72bn. Therefore, if the Chinese government has 20,000 tonnes, and if it is to have the same currency cover as America had on 31 January 1934, at current exchange rates gold would have to be priced at $2,317.

Russia began accumulating gold only more recently and is now aggressively building her official reserves. Whether she has accumulated bullion “off balance sheet” is not known but should not be dismissed. Based on her official reserves at 1,910 tonnes worth RUB5.0 trillion, it does not cover M0 yet (RUB8.44 trillion) but a rise in the gold price to $2,200 will do so, and a gold price of $2,860 would be required to match the Americans in 1934. In fact, for both Russia and China if gold is to have a monetary role it would have to be at a far higher price than it is today.

A scheme for linking currency to gold

Comparing the value of bullion held to the narrowest expression of money is likely to prove insufficient upon which to base a future monetary policy. But, given a good base of monetary gold, it is possible to set up arrangements to discourage redemptions of currency for physical gold when a gold exchange standard is fully implemented. The suggested arrangement that follows is based on the issuance of irredeemable government bonds with a coupon payable in either gold or currency at the owner’s choice (the gold bond). Furthermore, an issue of this sort could be used to improve government finances at the same time.

By issuing the gold bond at a discount to par, early buyers get an enhanced yield. This rewards them for buying a new instrument which has yet to gain its potential market recognition. The market price of the bond will become linked to the yield on physical gold once the conversion rate is set, with an additional margin for issuer risk. And if currency balances invested in such a bond are rewarded with a yield payable in gold, demand for currency redemptions into gold are unlikely to be significant, so long as the public has confidence in the issue and the gold exchange standard. So, a country putting its currency on a gold exchange standard should, with a correctly priced bond, minimise redemptions.

A sinking fund should be established at the same time as the bond is announced to buy physical gold to cover anticipated demand for coupons paid in gold. Some gold from reserves can be allocated for this purpose initially but additional gold should be bought to establish sufficient cover to add conviction to the scheme by winding down existing foreign currency reserves where they are unbacked by gold, immediately.

From here on, we shall assume this scheme to introduce a sound, gold-exchangeable currency is taken up by the Chinese government. Government finances can be expected to improve from the arrangement, to the extent that borrowing costs are reduced. For example, China’s 30-year bond currently yields 4.1% having been as high as 4.4% earlier this year. A gold-linked irredeemable Chinese bond, even allowing for issuer risk would probably yield no more than 3% at the outset, which is slightly less than the current yield on 1-year maturities. If it was issued with, say, a 2.25% coupon, it would be priced at 75.00, giving the attraction of a capital gain to private citizens as the risk premium on Chinese government bonds declines.

This will also lend support to the currency in the foreign exchanges. The gold bond should be listed in Shanghai, Hong Kong, Tokyo, Singapore, Dubai, London and Moscow so that sovereign wealth funds and other conservative long-term investors have ready access to it. New York is not on the list because it is Chinese policy to exclude the American banking system from her monetary affairs as much as possible, and the conflicts that necessarily would arise with the US government. Ultimately, for funds based outside America, the gold bond itself would come to be regarded as a gold substitute for investment purposes, integrating gold into both Chinese-led monetary and investment reforms.

There can be little doubt that if these measures are taken gold convertibility would rapidly promote the yuan to foreigners in Asia and beyond as an acceptable store of value in exchange for trade. In time, all foreign currency held in China’s monetary reserves not backed by gold would have to be disposed for gold or yuan, as being inconsistent with the new monetary policy. As stated above, China’s gold buying using dollars would start immediately and continue until the price of gold has risen to the point where the gold exchange rate is finally established.

Furthermore, with no final redemption on the gold bond, there would be no need to make any repayment provisions. This model is the one that was adopted by the British government for financing the Napoleonic Wars by issuing Consolidated 3% Annuities at a deep discount, so that investors providing war finance not only got an enhanced yield, but also a substantial capital gain when peacetime returned. The fortunes created on the return to peace played an important part in financing the industrial revolution in the early nineteenth century.

In this sense, there are good parallels between Britain’s war financing two hundred years ago, and China’s current position. In both cases government expenditure exceeded and exceeds respectively tax income by a significant margin, and neither were and are on a gold standard. Britain had temporarily abandoned her gold standard in the 1790s, before reinstating it a few years after Waterloo.

In China’s case, excess government expenditure is due to planned infrastructure spending, which is likely to be ongoing for at least another ten years and extending well beyond her borders. However, Chinese instigated capital expenditure throughout Asia will increasingly be covered by project financing through the Asian Infrastructure Investment Bank, releasing the Chinese government from much of the financing burden.

The British came out of the Napoleonic Wars with an estimated debt to GDP of about 260%. In cash terms it was considerably less, because the debt figure is the total of nominal debt in issue. This was the beauty of irredeemable Consols, because they never need to be repaid, which meant a more accurate debt to GDP figure was 180%. As an historical footnote, it is interesting they were repaid only recently.

China’s government debt is considerably less at just under 50%, but still rising. China is blessed with a savings rate of close to 50% of GDP as well, so further issues of a gold-linked bond into the domestic market should be heavily subscribed. Once the current expansion of infrastructure spending diminishes, the Chinese government will easily return to a budget surplus, paying down its debt more rapidly than the British did in the 1800s.

I would suggest China undertakes the monetarisation of gold in two stages. The first would be to issue the new gold loan outlined above. Proceeds of the new gold bond would be used to finance government expenditure, to purchase existing bonds in the market for cancellation, and to build a sinking fund to provide cover for future coupon demands in gold. The price relationship between coupons paid in gold and yuan will be fixed at a later date and will be the rate for the gold exchange standard once it is set. It cannot be set at the outset, because it is clear that for gold to be rehabilitated into China’s monetary system, and consequently the likelihood it will be elsewhere, will require a far higher gold price than at present. In price theory, it is the introduction of a new use that will set a higher marginal price. That will be the second step, which is announced in advance when the new gold bond is first issued but at a rate yet to be decided.

China is the ideal jurisdiction for the reintroduction of gold into a monetary system by way of a gold exchange standard. To briefly summarise:
 

  • China has been secretly accumulating gold since regulations appointed the PBOC to do so in 1983. Not only has the state accumulated significant quantities of gold, but the citizenry has as well. China and its population is therefore fully attuned to the use of gold as money.

  • The Chinese government has no need to resort to the illusory benefits of inflationary financing. Her budget deficits are the consequence of infrastructure spending, which will diminish in time, and her citizens have a savings rate of nearly 50%, which is the real engine behind her economic progress and wealth creation. Furthermore, government debt to GDP is relatively low at about 50%, and she is not burdened by the costs of a Western-style welfare state.

  • China’s success is driven by a political requirement to improve the standards of living for everyone in as many as 42 diverse ethnic groups, representing an unwritten contract between the state and its people in lieu of democracy. A gold standard and a savings vehicle that gives ordinary people a yield on gold will increase personal wealth and guarantee the cohesion and economic strength of the Chinese nation, at a time when America’s finances are relying increasingly on the destruction of private wealth through inflation. There has to be a parting of the ways for the two currencies.

  • The introduction of sound money by way of a gold exchange scheme will ensure China’s economic dominance will develop and continue for a considerable time, much as it did for Britain in the nineteenth century.

Russia is also manoeuvring towards a gold standard, which given her partnership with China at the head of the Shanghai Cooperation Organisation, will most likely build on the Chinese model. The differences are one positive and one negative. The positive is the Russian government’s finances are in excellent order, the negative is Russia has only relatively recently begun to accumulate significant gold reserves. She is therefore likely to want to accumulate more gold before embarking on a gold exchange standard and may therefore encourage China to delay her plans until she is ready.

The consequences of Asian gold exchange standards

The economic cost of a change to sound money is that the transfer of wealth from lender to borrower, which is the dominant feature of unsound money, ceases. Inevitably, overindebted businesses as likely to experience difficulties. Furthermore, Chinese exporters to countries with pure fiat currencies will have to invest in more efficient production to remain competitive.

This is less of a problem than first appears. In her current five-year plan, China is moving away from relying on competitive export models towards developing high-tech and service industries aimed at satisfying a growing middle class. Furthermore, Asia represents a new semi-captive market for China, where the yuan is likely to become the standard foreign currency.

The effect on the dollar, euro and Japanese yen could be ruinous, depending on how the relevant central banks develop their monetary policies. They would have to realise that the era of pure fiat is over, and currencies which depend entirely on confidence in their value are no longer fit for purpose. The PBOC could smoothen this process by giving the other major central banks advance notice of its intentions, to minimise the risk of bullion banks being badly wrong-footed with undeliverable bullion obligations.

In the wider context, financial markets are themselves completely wedded to neo-Keynesian economics and may take some time to adjust to why a successful gold exchange standard is a threat to unbacked fiat currencies. But by providing a globally-acceptable sound-money alternative to the current fiat money system, those that do adapt will avoid the hyperinflations that are the logical destiny for governments that rely on inflationary finance. The eventual prize will be for the Shanghai Cooperation Organisation to have two gold-backed currencies for cross-border trade for use throughout Asia, Eastern Europe, sub-Saharan Africa and parts of South America. The Middle East as well will find these currencies attractive in payment for oil, and countries that stay purely fiat will be marginalised.

Those countries whose currencies have been recently destabilised by the dollar’s rally should be among the first to realise that being tied to a Chinese-led sound money regime is a better option. In the course of only a year or two, in theory over half the world’s population could have access to a currency exchangeable for gold, or at least tied to it.

If the whole scheme of Asian revival through economic power is to progress and survive long into the future, it will be a precondition that gold is central to monetary policy. Indeed, given the increasingly certain fate for the inflationary dollar, which is likely to drag down the rest of the world with it, it should no longer be a matter of choice, only of timing. And unless the welfare-driven nations, whose governments have waxed on the destruction of their citizens’ wealth through deliberate monetary inflation reform their ways, they will deserve to slide into obscurity.

Comments

Dickweed Wang J S Bach Sun, 06/03/2018 - 18:03 Permalink

What we could be seeing with the development of international yuan currency markets is a platform that links the use of gold to trade settlement.

 

For at least a couple of years Dr. Jim Willie has been predicting that the reintroduction of gold into the monetary system will begin with what he's been calling the "gold trade note". Once that's in place the next step is for gold to resume its place as the premier form of money world wide, like it was before the Feral Reserve came on the scene over 100 years ago.

In reply to by J S Bach

OpenThePodBayDoorHAL Dickweed Wang Sun, 06/03/2018 - 18:51 Permalink

The article is just fantasy thinking. Last ones to leave the gold standard got screwed, similarly the first to get back on one will be screwed. Go put your thinking cap on and come on back.

Got your cap on now?

China has a gold-backed yuan. America prints unlimited USD and exchanges them for yuan. America just printed gold.

Kinda like how America prints oil today.

In reply to by Dickweed Wang

snblitz Sun, 06/03/2018 - 17:35 Permalink

If you do not hold the gold in your hand all you have is someone else's liability.

Unless the instrument is redeemable on-demand 100% in gold you have nothing.

https://finitespaces.com/2018/04/07/why-we-create-sound-money-and-governments-wreck-them

More important than gold is respect for the citizens on the part of their elected representatives.  The reason being is that the ones with the power can simply take the gold, as FDR did in 1934, and Nixon did in 1971.

So how to do you  get respect as a citizen?

How about consider who you elect to public office?

  • Vote independent
  • Do not vote for candidates with family members with foreign interests or "foundations"
  • Do not vote for candidates with intelligence credentials (FBI, NSA, CIA)
  • Do not vote for candidates with political experience
  • Help your friends to understand what is going on and how to fix it
  • Turn off the TV
MoreFreedom snblitz Mon, 06/04/2018 - 11:04 Permalink

I agree with the author, that by moving to gold backed currency, China reduces demand for dollars and creates an alternative reserve currency.  But then, China can't print money for government spending without risking a run on their gold reserves.  Both of these are good for Chinese citizens, and not so good for Chinese politicians and their politically connected friends that depend on deficit spending for their income (or just fear that spending cuts to maintain the value of Chinese fiat will hit them).  Though they might plan on pulling a Roosevelt and confiscating gold at a discount from citizens later.  Still, if you were a Chinese citizen, would you prefer to hold fiat or gold coins?  I'd bet many would go for the gold.

Seems to me, the Chinese politicians have decided they're against a gold backed currency; otherwise they'd have done it already.  Still, the Chinese party leadership may force it on the country.  Seems unlikely to me, given that Chinese citizens will likely coin gold in preference to fiat, undermining the ability to confiscate gold.  China will have to have a gold backed currency for at least a decade before people fully trust it, and I don't see the politicians going for it.

In reply to by snblitz

BankSurfyMan Sun, 06/03/2018 - 17:39 Permalink

They were butchers, maids, fish cutters, seamstress and the like of local villages and central squares. All their men were off to war. Put heads on sticks and storm, they rampaged! The women of "REVOLUTION"! 2019! Doom Porn!

marx Sun, 06/03/2018 - 17:47 Permalink

Let me state this as clearly as I can.

The Chinese will Never ever be the World leader in currency or anything else.

The main reason is that China is a Totalitarian regime.

As such, No free nation will ever trust their future with them.

Man up.

 

Jungle Jim Sun, 06/03/2018 - 18:10 Permalink

I wanted to go out but instead I sat here until the market opened. As fully expected, the instant the market opened, gold plunged straight down. It never fails to fail. 

everything1 Sun, 06/03/2018 - 19:29 Permalink

Gold never left the monetary system, you can get an oz. of gold for about $1300 U.S.

The monetary system left gold.  Nobody is going on a gold standard, but with many central banks hoarding gold is ..

To say the least .. different.

 

JoJo Kracko Sun, 06/03/2018 - 19:34 Permalink

What the author REALLY should have done to go along with their comments below is to show what gold would have to be priced at to get the US back to the same dollar to gold backed ratio.

 

Isn't the whole point of this to illustrate that the US needs $25,000/ounce gold to make up for the absolutely insane money printing going on under Obama and now Trump?

 

So hell yeah, China and Russia are racing to load up on gold.  Once they have enough they will be able to tell the world that the US buck is worthless and watch how quickly the world starts switching to gold backed currencies instead.

 

On top of that, they are buying while the US is doing everything they can to hold the price down for them.   When the reality of it's scarcity starts to dawn on people, scarcity in real gold, not fake paper gold, then that will also contribute to driving the price up above $2000/oz right into the range China and Russia would like to have it at.

 

...that may be not be enough gold bullion owned by the state at current prices to operate a simple gold exchange standard, being the equivalent value of ¥5.22 trillion, compared with currency in circulation of ¥7.15 trillion. For comparison, when President Roosevelt devalued the dollar to $35 in January 1934, the US Treasury held gold worth $7.44bn at the new price against currency in circulation of $5.72bn. Therefore, if the Chinese government has 20,000 tonnes, and if it is to have the same currency cover as America had on 31 January 1934, at current exchange rates gold would have to be priced at $2,317.

Russia began accumulating gold only more recently and is now aggressively building her official reserves. Whether she has accumulated bullion “off balance sheet” is not known but should not be dismissed. Based on her official reserves at 1,910 tonnes worth RUB5.0 trillion, it does not cover M0 yet (RUB8.44 trillion) but a rise in the gold price to $2,200 will do so, and a gold price of $2,860 would be required to match the Americans in 1934. In fact, for both Russia and China if gold is to have a monetary role it would have to be at a far higher price than it is today.

 

If this is the plan, it is brilliant.   Not only will it marginalize all fiat currencies backed only by the faith in the value of the people who use them, it will also have the same negative effect on the alt-coin currencies.

Sadly the North American countries will suffer greatly from this unless they start taking control of their runaway deficits, vastly over priced health care systems, and also start buying back their gold (in Canada's case).

PS, keep hodling my balls bashers.

Bond Wizzerd Sun, 06/03/2018 - 19:59 Permalink

There isn't an urgency for hard assets in America the way there was/is in Romania,Turkey, Zimbabwe, Venezuela, Argentina,etc. When demand comes, nobody will have predicted it, not even you. Your throwing in the towel would be a good pre-condition though.

Perma-bulls always have zero credibility. When was the last time you called a bear market in gold?

Omega_Man Sun, 06/03/2018 - 20:48 Permalink

My dear Alasdair,

 

Why would China take perfectly good precious gold to back current BS bonds they have already issued?

 

Better to  (and I recommend to other nations such as Canada - Justin you hear me after buying Kinder Morgan pipeline) if your GDP to debt is less than merica, borrow up to that limit, spend on projects that are real, and tangible and give value to the land to which  the jurisdiction controls, then when the whole fiat shithouse burns down your nation will be left with real assets of value...

 

Of course with my advice comes with the caveat that you cannot borrow from jewish bankers - aka  money changers, such as goldman who have nothing but leased office space, yet create vast sums of BS merican dollars....  nations must create a national currency away from jews where no foreclosure can take place by way of default ...

 

Then later rename, revamp the national currency... it shall be fashionable at that point and all the rage.... when the new a la bretton woods commences... I think Trump has something such as this in mind up his sleeve... he is more clever than a used car salesman. 

 

Looking forward to more of your excellent work Alasdair..,

 

all the best, and best regards to you and yours..

 

yours truly, 

Omega man

Captain Nemo d… Sun, 06/03/2018 - 21:15 Permalink

The economic cost of a change to sound money is that the transfer of wealth from lender to borrower, which is the dominant feature of unsound money, ceases. Inevitably, overindebted businesses as likely to experience difficulties.

Why? Because they will no longer transfer wealth to lenders? Or because lenders will no longer lend?

galant Sun, 06/03/2018 - 21:24 Permalink

The author Alasdair Macleod, Goldmoney research director, commented last year:

"For years the gold price has been suppressed in American markets through the expansion of un-backed gold derivatives.

That control is likely to be first challenged by a weakening dollar and ultimately wrested from U.S. futures and London's forward markets, if only because physical gold markets are now firmly under Chinese control."

MacLeod avoids click-bait sensationalism but his predictions remain on target.

TradingTroll Sun, 06/03/2018 - 22:22 Permalink

While a trader might be attracted by gold delivery options embedded in a Chinese futures contract, one wonders if the attraction might dissipate dramatically if Trump slapped a tariff on that gold.

 

You can’t blame Trump. The money to rebuild the reserves at Ft Knox has to come from somewhere!

InnVestuhrr Mon, 06/04/2018 - 07:27 Permalink

More shiny-shit cult delusion.

The trend IS away from the USD, but it is to the Yuan, NOT shiny shit.

The Chinese Communist Party regime wants the Yuan to be the world's currency, not shiny shit, for CONTROL, it is always about CONTROL.

Does not matter what shiny shit & baubels the proletariat buy, fiat is the only thing that regimes will allow.