China is now overtly pushing for the US dollar to be replaced as the
worlds reserve currency
Xinhua, Chinas official press agency on Sunday ran an op-ed
article which kicked off as follows:
As U.S. politicians of both political parties are still shuffling back
and forth between the White House and the Capitol Hill without striking a viable
deal to bring normality to the body politic they brag about, it is perhaps a
good time for the befuddled world to start considering building a
de-Americanized world.
China does have a broad strategy to prepare for this event. She is
encouraging the creation of an international market in her own currency through
the twin centres of Hong Kong and London, side-lining New York, and she is
actively promoting through the Shanghai
Cooperation Organisation (SCO) non-dollar trade settlement across the
whole of Asia. She has also been covertly building her gold reserves while
overtly encouraging her citizens to accumulate gold as
well.
There can be little doubt from these actions that China is preparing herself for
the demise of the dollar, at least as the worlds reserve currency.
Central to insuring herself and her citizens against this outcome is
gold. [SILVER IS BETTER for the “little
guy”!] China has invested heavily in domestic mine production
and is now the largest producer at an estimated 440 tonnes annually, and she is
also looking to buy up gold mines elsewhere. Little or none of the domestically
mined gold is seen in the market, so it is a reasonable assumption the
Government is quietly accumulating all her own production without it becoming
publicly available.
Recorded demand for gold from Chinas private sector has escalated to
the point where their demand now accounts for significantly more than the rest
of the worlds mine production. The Shanghai Gold Exchange is the mainland
monopoly for physical delivery, and Hong Kong acts as a separate interacting
hub. Between them in the first eight months of 2013 they have delivered 1,730
tonnes into private hands, or an annualised rate of 2,600
tonnes.
The world ex-China mines an estimated 2,260 tonnes, leaving a supply
deficit for not only the rest of gold-hungry South-east Asia and India, but the
rest of the world as well. It is this fact that gives meat to the suspicion that
Western central bank monetary gold is being supplied to keep the price down,
because ETF sales and diminishing supplies of non-Asian scrap have been wholly
insufficient to satisfy this surge in demand.
So why is the Chinese Government so keen on gold? The answer most likely involves geo-politics. And here it is worth
noting that through the SCO, China and Russia with the support of most of the
countries in between them are building an economic bloc with a common feature:
gold. It is noticeable that while the West’s financial system has been
bad-mouthing gold, all the members of the SCO, including most of its prospective
members, have been accumulating it. The result is a strong vein of gold
throughout Asia while the West [with its
multi-Trillions of worthless toxic paper “assets”] has left
itself dangerously exposed.
The West selling its stocks of gold has become the biggest strategic
gamble in financial history. We are committing ourselves entirely to fiat currencies, which our
central banks are now having to issue in accelerating quantities. In the process
China and Russia have been handed ultimate economic power on a
plate.—END
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