China’s Yuan Set To Become Global Reserve Currency With Gold

[neilgin1]

"China’s Yuan Set To Become Global Reserve Currency With Gold Backing?"

(here's the ZH article...if this is true?......you might want to put some frns into a good stout sturdy bomb shelter that can take the psi's a nuke can kick off. This would definitely be the thing that gets the ball a rolling)

Recent media reports in China and Russia suggest that China is continuing to consider backing the yuan with gold. Since 2005, we have said that such a move by China was likely as China seeks to become a superpower and lessen and undermine U.S political dominance.

John Butler in his book ‘Golden Revolution’ and Jim Rickards in his book ‘Currency Wars’ have warned that China and or Russia could move to back their currencies with gold which would then lead to the U.S. and EU having to follow suit in order to prevent currency crises thereby leading to a new gold standard.

According to media reports, the People's Bank of China is considering phasing out the dollar as the reference currency or peg for the yuan, and to start using gold as the reference point.

The reports have not been confirmed officially, but there has been official comments to that effect in recent years and Chinese academics have advocated backing the renminbi or yuan with gold.

Beijing's possible move to back the yuan with gold would be a strategic move in order to, lessen the risk of inflation, increase the yuan’s attractiveness as an investment medium and create faith in the yuan as a reserve currency.

http://www.zerohedge.com/contributed/20 ... ld-backing

here's something VERY TELLING, and I wish our own policy makers would srat be smart LIKE THIS:

It would be a strategic gamble and while it would cause much short term economic pain for China and indeed the world - it could lead to long term benefits. The Chinese tend to think long term rather than quarter to quarter.

[silverflake]

Anybody here who reads Porter Stansberrys stuff (like me) knows that the Chinese becoming the default currency of the world is not only what the ChiComs are betting on but is also what will lead to a radical change in the quality of life here in America. Too extreme? Maybe, but the pieces are coming together now. Better to be prepared.

KEEP STACKING!!!!!!!!!!!!!

[Treetop]

Ive followed this greater topic for years. The yuan will not become THE global reserve currency. but the dollar will indeed loose the role as the sole reserve currency. For several years now there has been increasing talk of using a basket of currencies including the dollar and yuan and SDRs (special drawing rights of the IMF) as the reserve currency. One of the major ideas pushing this is that NO single currency should hold this role, and that the us dollar and the UK before us prove that no country can be trusted with such a role for their currency. They know very well what this change will do to america but if you follow the topic through the IMF especially its pretty clear they intend to phase this in, likely as the dollar is showing weakness for its own reasons. China clearly hopes to soak up as much of this exposure as possible but I dont think they expect to have the sole reserve currency. Several other countries currencies have been named as well, including a few you wouldnt necessarily expect, or I didnt anyway. Considering the number of countries pushing for this and the slow shift in global trade away from the dollar ALREADY, this is almost certainly inevitable and will indeed change our country in deep ways. the writing has been on the wall on this topic for atleast a decade if you followed it, with increasing moves and talk in this direction the entire time. I doubt its more then 2-5 years away at this point. I expect we will be feeling pain well before it happens, because this is obviously a BIG move that those pushing for know will hurt the global economy. So, though they are prepping for it, they dont exactly want to rush it. Rather then the catylist for the dollars demise it will be the "answer" to the dollar demise.

That is my take based on the way this topic is covered through the forces actually pushing for it anyway. Our issues are generational to put it mildly, and have barely begun. The baby boomers are going to be in trouble. for better or worse our country will reap what it has sewn.

[barrytrot]

What is the benefit to China to back their currency by Gold? Gold unlike the general self-worth of a country is finite.

That's why no one is on the gold standard because it's far too limiting.

I'm sure if the Yuan or "Gold Yuan" was official gold backed it would suddenly mean that they could never again print more money other than replacement of old money.

What country could get by with that?

[barrytrot]

NOTE: I think any gold backed official currency would be awesome for us though. I would be happier with the Gold Yuan than the "fake Dollar" any day!

I'm just asking WHY would China do it?

[IdahoCopper]

If the SDRs were backed with asteriodal platinum, there would be a huge "gold rush" to stake claims for resources in Space. That would be the best possible scenario for all of humanity and our progeny for centuries to come.

[mtalbot_ca]

What is the benefit to China to back their currency by Gold? Gold unlike the general self-worth of a country is finite.

That's why no one is on the gold standard because it's far too limiting.

I'm sure if the Yuan or "Gold Yuan" was official gold backed it would suddenly mean that they could never again print more money other than replacement of old money.

What country could get by with that?

I agree with your point of view and I would care to venture that because gold is so limited in supply that it could probably only be used to back a new reserve currency called the ''GOLD Dollar'' for example which could only be used in a basket of backing instruments to help countries get a sense of control over their own national currency system. This would not mean that I could redeem the same dollar that I have in my hand into physical gold. I would have to go through the same supply-demand chain as any other goods.

I think it is only a push to make countries more accountable of their balance sheets and force them to get a decent gold reserve in line with their economic power or in the chinese case ambition.

Nevertheless an interesting discussion.

Cheers,

[mflugher]

If the SDRs were backed with asteriodal platinum, there would be a huge "gold rush" to stake claims for resources in Space. That would be the best possible scenario for all of humanity and our progeny for centuries to come.

The thought of running a gold sluice box on an asteroid (low gravity) is too much to handle...

Wonder how they would do that.

Some sort of centrifuge?

[InfleXion]

What is the benefit to China to back their currency by Gold? Gold unlike the general self-worth of a country is finite.

That's why no one is on the gold standard because it's far too limiting.

I'm sure if the Yuan or "Gold Yuan" was official gold backed it would suddenly mean that they could never again print more money other than replacement of old money.

What country could get by with that?

The gold standard is only limiting in that it prevents a nation from spending beyond its means, or more accurately, beyond their ability to produce or acquire more gold.

It's not that they can't print more money. It's that in order to print more money they must supply gold to maintain buying power, which is the trade off. When you print money without adding gold your money loses buying power. In my view that is actually worse because you are not only robbing people by increasing the price of goods and services, but also hurting small businesses that lose more customers due to this. The abuse of power and subsequent imperialism enabled by money printing is secondary but also worth noting.

Gold (and silver) was the standard for thousands of years and society didn't have a problem with it. The poor state of things we are in today is a direct result of what going off of the gold standard has allowed to occur.

To answer your question - what is the benefit to China? Simply put, it would make their currency more desirable than anyone elses. People across the globe would flock to acquire it, and with a strong currency comes a strong consumer base, a strong economy, and subsequently power.

The only reason that fiat currencies provide power is because nobody has a gold backed currency. As soon as one shows up it's game over for fiat as people will rush into the stronger and safer currency. The first nation to go for gold will have the greatest advantage.

SDR's will not be desirable unless they are backed by gold. Once people get stung with the pain of failing fiat currencies and relive what our great grandparents did which we have now largely forgotten it will take a few more generations to get suckered into debt based money again.

[68Camaro]

I think inflexion describes a rationale. What else might they have in mind? They might hold a large amount of gold in hard reserve without committing it to currency. This would allow them margin to expand currency. Plus they are nearly (if not actually) the largest gold producer in the world so they have some further ability to continue to expand. Once setup as the new model by the largest economy in the world it becomes self perpetuating.

[Treetop]

SDR's will not be desirable unless they are backed by gold. Once people get stung with the pain of failing fiat currencies and relive what our great grandparents did which we have now largely forgotten it will take a few more generations to get suckered into debt based money again.

What world do you live in, I wanna move there. I wish I could believe that, and many will indeed know better. However we would be vastly out numbered Im afraid, besides its a global initiative not a national one. I hope you're right.

[68Camaro]

It's not hard to see where we are going if you have conviction.

Fiat is either viable or it's crap and destined to fail. Pick one or other. Short term is a wildcard. But long term there are only the two choices. If it's crap, then it's crap. Not just a little stinky, but genuine sewer fodder.

History says fiat is crap.

[John_doe]

The Yuan has shown solid growth over the past few years.

[InfleXion]

SDR's will not be desirable unless they are backed by gold. Once people get stung with the pain of failing fiat currencies and relive what our great grandparents did which we have now largely forgotten it will take a few more generations to get suckered into debt based money again.

What world do you live in, I wanna move there. I wish I could believe that, and many will indeed know better. However we would be vastly out numbered Im afraid, besides its a global initiative not a national one. I hope you're right.

I should quantify that I am looking at things over the longterm. SDR's would be desirable without being backed by gold in the current state, but my thought process is that SDR's would only need be implemented as the world reserve currency if there is loss of faith in the USD which would most likely coincide with a loss of faith in fiat in general. I don't know what China's plans are, but they are certainly positioning bilateral agreements to bypass the USD and have the gold necessary to fulfill the role of sound money if the world demands it, or at the very least to profit from a return to sound money if they aren't the ones to do it.

You are right, we are vastly outnumbered, however I don't think it would take much to bring people over to our side of the fence once they start getting burned, which could easily happen on a global scale since all national currencies are fiat, and intertwined due to coordinated central bank policy set in Basel, dollar swap lines, global banking systems such as SWIFT, and so on.

BitCoin is a wildcard and could circumvent some of the demand for metal if confidence is lost in fiat, however I have a feeling it will do its share of burning folks as well as an unregulated market. The key issue is trust, and as I see it only metals can be trusted. It's just a matter of waiting for perceptions to catch up which won't happen until it needs to, when trust becomes an issue. Right now most people are content with trusting the money we have.

Granted most of this is just my opinion / perception through the lense of my choosing, but I do try to explain my thought process so you need not take my word for it, but rather understand where I am coming from and decide for yourself whether it makes sense.

[Treetop]

When do people ever learn from mistakes? individually we do, collectively we rarely do. If that was true with fiat this country wouldnt have fiat issues today. Every group thinks, We will do it right this time!!! Thus far none has. This talk of SDRs is literally from people who understand the looming issues with the dollar and have been proposing this increasingly for a decade or so.

Gold and commodities and currencies backed by them have been discussed a being part of the basket of currencies but the big bankers seem to have no wish to limit themselves in that wa and instead want fiat SDRs to be the binding force on the baskett of currencies to replace the dollar as reserve currency. when do we ever get a say in what the power brokers do? They discuss it behind closed doors with us getting just snippets then later they use media and elected officials to push it on us.

Perhaps this will indeed be the issue that breaks these cycles, but Im not holding my breath on that personally, just trying to find the best way I can take my family through it with less pain.

[68Camaro]

When do people ever learn from mistakes? individually we do, collectively we rarely do.
...

Never, for any length of time. That's why history (more or less) repeats. Humanity is inherent corrupt, and corruptness put into the background eventually rises to the surface again.

The existing fiat will eventually die. Something else will replace it. Eventually it will be something of value (historically always a PM), which will be king for a time, until such time as it needs to be corrupted to serve someone's purpose - then it will be, and the downhill slide to the next form of fiat starts. Repeat this over and over, and we have history.