“Since 2007 China has mined and purchased more gold than any other country on earth”
We have been documenting China’s insatiable appetite for gold for the past several years. When you realize how much gold China has acquired it puts gold in a completely different light. Gold is money and nothing else. It is used to create jewelry, however, this is nothing more than a centuries old tradition as a means to display and transport of wealth. If your wealth is wearable you can easily move around the region while freeing up space in the trunk or baggage for other items.
I have long argued that if you’re “hoarding gold like a dragon“, as China has been doing since 2007, you are doing so for the purpose of being able to control the currency markets around the world. The golden rule still applies “the one with the gold makes the rules”. Always has, always will.
China is now acquiring gold still in the ground as the above ground supplies are now strained and the open market may not have the capacity to satisfy China’s actual demand they have set in their ongoing “plan”. In 2016 China acquired $27 BILLION in gold mines alone. This gold is no longer part of the global supply as every ounce mined will go to China and never be traded on the open market. This seems to be a big part of China’s future plans as their gold acquisitions in 2016 were TRIPLE those in 2015. That’s a significant increase.
Why is China amassing all this gold? Why is China now amassing some of the largest gold mines in the world? Could it be that China is planning for the future and gold will be part of the global or regional (along the New Silk Road – OBOR) trade? High ranking officials from the Shanghai Gold Exchange have already met with the Director of International Financial Center from Kazakhstan for the specific purpose of introducing gold along the New Silk Road. Will the renminbi/yuan be backed with some gold?
I have long argued that China will reintroduce gold to the currency market and back the renminbi/yuan with gold. When China will make this move is the only remaining question. It is very clear China has their sights, in an official capacity, set on acquiring as much as gold as possible for the purpose of being the global economic power and one of the ways to dominate every market on the planet is to offer a gold backed currency.
Another question would be – how will China’s acquisitions of these major gold mining companies impact the global gold market and the LBMA and COMEX’s ability to be the pricing mechanism for the global gold trade? If China is removing ton upon ton of gold from the open market, at what point will the open market be China? My guess is the LBMA and COMEX have very limited time remaining.
Some people will argue there is not enough gold in the world for China or any other country to back their currency with gold. They are 100% correct – if you use the current nonsensical “price” associated with gold. If golds value were more aligned with reality it would trade somewhere between $9,000 and $25,000 per ounce. At these levels a gold backed currency is most certainly in the realm of reality. Gold is money and nothing else. The Chinese understand this and it seems they are putting everything in place to notify the world of this never ending truth.
For all the naysayers claiming China has too much debt and their economy is in trouble I offer this – what if China, with the Shanghai Gold Exchange and gold priced in renminbi/yuan, introduced all of the gold from the various unofficial accounts and backed the renminbi/yuan with 20% gold?
One of the most credible sources to discuss China’s gold hoard is Alasdair Macleod, Head of Research at GoldMoney. Alasdair has estimated that China has in the neighborhood of 20,000+ tons of gold in holding (here, here and here are three examples supporting his idea). If China does in fact hold 20,000+ tons of gold and does in fact have her sights set on reintroducing gold to the monetary system tell me again who’s economy is in real trouble.
The short video below supports this entire idea.
In the past few years, China has been buying up and mining massive amounts of gold from around the world. Soon it will have the largest gold reserves on the planet. It seems to be distancing itself from the U.S. dollar and building a strong Renminbi/Yuan. Yet China denies these accusations. Is China trying to take over the world’s currency? Video Source
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