China Puts Gold Where Its Money Is
VANCOUVER, Canada (Bullions Bull Canada) -- Since the Crash of 2008 exposed the global financial system as simply one big Ponzi scheme ticking down to implosion, one of the most public and emphatic economic policies of China's government has been the rapid/relentless accumulation of more gold reserves to "back" its own monetary system.
This economic priority has become an even greater imperative as China steadily replaces the U.S. dollar with the renminbi as the world's new reserve currency. Stage I of that process has seen trillions of dollars in bilateral trade agreements and currency-swaps.
Stage II was the establishment of a "renminbi trading bloc among seven of 10 of Asia's most prosperous economies, where the renminbi is now the reserve currency for these nations.
What is unclear is whether "Stage III" involves any overt action by China to spread the renminbi's official,reserve currency status or whether it simply involves passively waiting for the West to complete its self-destruction of the dollar-based system.What is clear is that a central part of China's mission to have the renminbi assume the global mantle of "reserve currency" is to have massive gold reserves backing that currency. China should add to its gold reserves to "ensure national economic and financial safety, promote yuan globalization [i.e., the renminbi as reserve currency] and as a hedge against foreign-reserve risks [i.e., a dollar meltdown]," according to Gao Wei, an official from the Chinese Department of International Economic Affairs of Ministry of Foreign Affairs. Wei made the above comments in the China Securities Journal Friday, according to a Bloomberg report. And later in the same article: "... In 2009, a State Council advisor in China stated that a group of officials and economists from Beijing and Shanghai established a "task force" to discuss measures to add to the nation's gold holdings. "We suggested that China's gold reserves should reach 6,000 tons in the next 3-5 years and perhaps 10,000 tons in 8-10 years," the advisor noted. This is where the question of how much gold China has (and how much gold China wants) becomes interesting. "Officially," China's gold reserves stand at 1,054 tons, and (also noted in the above source) this number has not been "updated" since 2008, when "it disclosed [emphasis mine] that its reserves had increased" from 600 tons.
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