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Thread: Chinese to Gold Back YUAN?

  1. #1

    Default Chinese to Gold Back YUAN?

    http://kingworldnews.com/kingworldne...cked_Yuan.html

    “This is actually a hedge fund named Pacific Group, which is converting 1/3 of its hedge fund assets into physical gold. They have already taken delivery of $35 million worth of gold bars. The head of the fund was quoted by Bloomberg as saying, “In our judgment we are in the early stages of what would likely be the world's largest short squeeze in any instrument.”


    I believe the world will see that short squeeze in gold. The Germans have given the U.S. 7 years for a small portion of their gold, which is supposedly stored at the Fed, to be repatriated. But I'm sure that if it starts to look difficult to get it back the Germans will accelerate the process. This will simply add fuel to the massive squeeze which lies in front of us. This will literally cause a feeding frenzy as the gold market explodes higher.

    The second thing I want to make KWN readers aware of is the report which was commissioned by the World Gold Council. This is an incredible document, especially coming from the World Gold Council because it's basically saying that the Chinese are going to back their currency with gold. This would, in turn, displace the US dollar and make the Chinese yuan the world's reserve currency.

    The Chinese are sitting on piles of dollars right now, and while the US continues its decline, the reality is that all of the fiat currencies are in a race to the bottom. We just saw the Bank of Japan yesterday talk about opening up QE and printing vast sums of money. This will be an attempt to reverse their deflation with inflation. This move by the Japanese is very, very bullish for gold.

    But between what is happening with the set up for the coming short squeeze in gold, coupled with the Chinese moving to back the yuan with gold, and the shortages we are seeing in the silver market, the outlook for gold and silver going forward are spectacular. Quite frankly, the gold and silver bulls are going to begin to trample the bears at some point in the near future.”



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  3. #2

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    Interesting....Cui bono?
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  4. #3

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    The article claims this is a confirmed intention...if so WOW...here comes WW3.
    "Like an army falling, one by one by one" - Linkin Park

  5. #4

  6. #5

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    Wow, China might pull of world domination in the next 50 years if they have half of the world's manufacturing base and the world reserve currency. Being that their gov't doesn't even pretend to govern for the people, they can afford to buy gold with no reprucussions from the populace. Ironically, if their currency becomes the world reserve currency, it will guarantee them prosperity.

  7. #6

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    China's current practice is currency devaluation to boost exports.

    A gold standard would put that into reverse, and halt China's easy money high.

  8. #7
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    Quote Originally Posted by SpreadOfLiberty View Post
    China's current practice is currency devaluation to boost exports.

    A gold standard would put that into reverse, and halt China's easy money high.
    Which would have a very negative impact on their economy since it is still highly export based. I doubt they would want to do that.
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  9. #8

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    All savings based economies convert to consuption based at some point.

    Capital flows.

    Quote Originally Posted by Zippyjuan View Post
    Which would have a very negative impact on their economy since it is still highly export based. I doubt they would want to do that.
    "Like an army falling, one by one by one" - Linkin Park

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    At this rate China will pave the streets of their ghost cities in gold.

  11. #10

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    So will the price of eggs double before GOLD? In a SHTF scenario you sell GOLD to eat.
    Buy a farm.

  12. #11
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    http://www.businessinsider.com/russi...eserves-2012-8

    China is continuing to quietly accumulate their reserves and diversify out of their massive $3.24 trillion of foreign exchange reserves.

    China’s gold reserves remain miniscule as a percent of their overall foreign exchange reserves – less than 2%. In marked contrast to the US, Germany and even France and Italy when gold’s share of national forex reserves is over 70%.

    China’s undeclared official gold reserve purchases remains an elephant in the room in the gold market with very little coverage of or analysis of the People’s Bank of China’s quiet and untransparent accumulation of gold.

    In the coming months, one can expect that China will announce that they have doubled their gold reserves to over 2,000 tonnes. This announcement may again shock the market and drive prices higher as did their announcement in April 2009 which surprised those less informed about the gold market.

    The People’s Bank of China will not telegraph its intentions or purchases to the market as doing so would lead to a surging gold price and to a further devaluation of its foreign exchange reserves.

    China is trying to position the yuan or renminbi as an alternative global reserve currency and large gold reserves are essential if this is to be achieved.


    Read more: http://www.businessinsider.com/russi...#ixzz2J8NWaFOb
    For comparison, the US has over 8,000 tones of gold reserves. http://en.wikipedia.org/wiki/Gold_reserve
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  13. #12

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    Quote Originally Posted by Zippyjuan View Post
    Which would have a very negative impact on their economy since it is still highly export based. I doubt they would want to do that.
    No point in exporting if you never import.

  14. #13

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    Quote Originally Posted by Johnnybags View Post
    So will the price of eggs double before GOLD?
    Maybe, maybe not. But it will decuple(x10) before eggs.

  15. #14

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    King World News has posted "imminent" news about gold and silver forever. I guess I am just jaded by now.

  16. #15

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    i like how china is going to conquer the world without invading any countries with military....

    i doubt US will allow this and will threaten China with missiles in taiwan, japan, phillipines and south korea.

  17. #16
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    Quote Originally Posted by cubical View Post
    No point in exporting if you never import.
    In terms of dollar value of goods, China is the world's third biggest importer (behind the US and the European Union- if you don't count all those countries together, then China is #2) https://www.cia.gov/library/publicat.../2087rank.html


    This entry provides the total US dollar amount of merchandise imports on a c.i.f. (cost, insurance, and freight) or f.o.b. (free on board) basis. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.

    Rank Country Imports Date of Information

    1 United States $ 2,236,000,000,000 2011 est.

    2 European Union $ 2,000,000,000,000 2010 est.

    3 China $ 1,660,000,000,000 2011 est.

    4 Germany $ 1,333,000,000,000 2011 est.
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  18. #17

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    Quote Originally Posted by Zippyjuan View Post
    In terms of dollar value of goods, China is the world's third biggest importer (behind the US and the European Union- if you don't count all those countries together, then China is #2) https://www.cia.gov/library/publicat.../2087rank.html
    Germany imports 2/3 of all EU imports?

    Edit: Ok, forget it, in the data for Germany imports from other European countries are include and the EU-data is just about imports from non-EU countries...

    Still, China consistently exports more than they import:

    https://www.cia.gov/library/publicat...e=aus&rank=219

    In the long run trade balances always have to be balanced, in one way or another. There is no historical case of a country consistently having a trade surplus or negative balance and it wouldn't make sense according to economic theory. So one day China has to import more than what they are exporting and the opposite is true for the US (and to some degree to many EU member states). And that's going to be painful.
    Last edited by Danan; 01-26-2013 at 07:59 PM.

  19. #18
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    In the long run trade balances always have to be balanced, in one way or another. There is no historical case of a country consistently having a trade surplus or negative balance and it wouldn't make sense according to economic theory.
    Not necessariliy true. Let us take two countries. One large, one small. The large one will have a huge demand for goods and services- the smaller one, a well, smaller demand. The larger country is likely to be importing more goods from the smaller one imports from the bigger one even if they have identical per-capita economies. Or let is take another example. Say the US and Saudi Arabia. Saudi Arabia has a small population but they have something we need and don't have enough of- oil. We will (and do) import a lot of oil from them. Even though they are now rich, they have a very small population. They don't need a lot of stuff from us- not as much in value as what we buy from them. This imbalance can continue for a very, very long time- until we don't need their oil anymore or they run out of it.
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  20. #19

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    Quote Originally Posted by Zippyjuan View Post
    In terms of dollar value of goods, China is the world's third biggest importer (behind the US and the European Union- if you don't count all those countries together, then China is #2) https://www.cia.gov/library/publicat.../2087rank.html
    Balance of trade is relevant, not gross import numbers.

  21. #20

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    Quote Originally Posted by Zippyjuan View Post
    Not necessariliy true. Let us take two countries. One large, one small. The large one will have a huge demand for goods and services- the smaller one, a well, smaller demand. The larger country is likely to be importing more goods from the smaller one imports from the bigger one even if they have identical per-capita economies. Or let is take another example. Say the US and Saudi Arabia. Saudi Arabia has a small population but they have something we need and don't have enough of- oil. We will (and do) import a lot of oil from them. Even though they are now rich, they have a very small population. They don't need a lot of stuff from us- not as much in value as what we buy from them. This imbalance can continue for a very, very long time- until we don't need their oil anymore or they run out of it.
    Of course it can, because it has. But that doesn't mean it can last forever. The only reason Saudi Arabia accepts paper dollars rather than real goods is because those dollars are seen as a store of value which can one day in the future be used to purchase something real. Eventually those dollars will make it back to US shores and someone in the US will have to produce something real(or provide a service) for that dollar.

  22. #21

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    LOL Cubical, that's an old picture of Schiff in your avatar...

  23. #22

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    http://www.libertygrotto.com/blog/?p=2692

    Largest Withdraw from Large US Banks since 9/11

  24. #23

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    For some reason US banks were seeing massive inflows of depositor cash (despite gaining no yield on savings and the banks speculating with the depositor savings).

    It could be as simple as the cash was put in the banks for short term liquidity and much of it has simply been withdrawn as planned OR depositors are starting to see just how corrupt their banks are and are withdrawing their cash for safety reasons.

    I have a feeling its the first, hoping for the 2nd.

    Quote Originally Posted by Arklatex View Post
    http://www.libertygrotto.com/blog/?p=2692

    Largest Withdraw from Large US Banks since 9/11
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    If someone backs a currency with any type of metal , would it not become the preferred currency ?

  26. #25

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    Yes. It would immediately lower the interest rate of that country (except for the G8 - who would only lend enough credibility to keep their interest rates where they are if they were to peg to gold).

    If the country that went to the gold standard were large enough (or a bloc of courtries...think BRIC) - it would see capital flow there and likely lessen the demand for G8 bonds and their interest rates would rise as a result.

    Quote Originally Posted by oyarde View Post
    If someone backs a currency with any type of metal , would it not become the preferred currency ?
    "Like an army falling, one by one by one" - Linkin Park






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