China Plans Yuan-Denominated Gold Fix

China, also the top producer of gold, feels its market weight should entitle it to be a price-setter for bullion and it is asserting itself at a time when the established benchmark, the century-old London fix, is under scrutiny because of alleged price-manipulation.  (LINK)

I have suggested for over eight years that the eventual financial “reset” will involve China rolling up out a gold-backed currency. As the world’s largest importer/exporter, China would be in position to dictate a requirement that countries trading with China would be required to China’s new currency for trade settlement. This would establish China’s gold-backed yuan as the de facto global reserve currency.

Any country which issues a currency not backed by gold would see the value of its currency plummet. On the assumption that China would require a full audit of any country converting its currency into the new yuan, the U.S. would be forced to open the Fed’s gold vault for Chinese inspection. I think we all know how this exercise will end…

I thus believe that China’s plan to launch a yuan-denominated gold fix is the next step in the direction of a longer term grand plan to eventually launch this new gold-backed currency. And perhaps that explains this billboard, the photo of which was taken by Simon Black (James) of The Sovereign Man website:

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It’s almost as if China is taunting the U.S. with that billboard – especially given the use of gold coin instead of an “O” in the phrase “the world currency.” I’m sure China is well aware of the fact that the U.S. has at most a fraction of the 8100 tonnes of gold it reports on the Treasury balance sheet.

I think we all know that the dollar will eventually collapse. China’s introduction of a gold-backed yuan as the world’s reserve currency would be the catalyst that would trigger the collapse of the dollar and completely strip the U.S. of its global superpower status.

18 thoughts on “China Plans Yuan-Denominated Gold Fix

  1. If this becomes reality, would it not be wise to hold some yuan currency now ? Or would a new yuan be introduced making the prior obsolete?

  2. This billboard is really kind of shocking. I would assume a gold backed Yuan is supposed to be introduced years if not decades from now esp. in a post-collapse environment. But why are the Chinese having this billboard now in a very public place? It could also make sense in a serious pre-war phase. Maybe we are already in that department. To me this is very puzzling.

    1. James Turk has shown that between 1983 and 2002 China probably accumulated 25,000 tonnes of gold before allowing its people to themselves buy gold.
      Alasdair Macleod has shown that the Chinese authorities have hoarded another 9,500 tonnes between 2002 and 2014.
      Having deep pockets, the central banks of the East have been able to buy this gold cheaply and in the last 3 years at the All In Sustainig Cost of gold for producers.
      With 34,500 tonnes of gold backing your currency at a time when the Reserve Currency (US$) is destroying the world’s financial system through defaulting on the Bretton Woods Agreement(1944) on Aug 15 1971, and because of the natural demise caused by the Triffin Dilemma….why wouldn’t China start to make its move now?
      In doing so it could stop the complete collapse of the financial system, making the rest of the world feel very obliged indeed.
      We need a strong leading country.

  3. as all can see this ‘billboard’ and its message was a topic for discussion on ALL of the networks news and financial programs in the USA and Europe…..NOT

  4. The photo displayed seems to be a commercial for a retail gold coin dealership. I do not see any indication of official plans to issue a gold backed currency. The phrase “World currency” refers to the fact that a gold coin will be accepted everywhere in the world at the prevailing price of gold. The phone number below the billboard indicates that this is just a commercial ad and nothing more.

    1. Not sure how you draw that conclusion. In fact, there’s some interesting symbolism embedded in that billboard that seems to be taking a huge shot at the western illuminati. I’d didn’t want to go into that because that topic was beyond the scope of the blog post.

    2. and actually “RMB” is the forex abbreviation for “renminbi” – which is obviously the paper form of the Chinese currency and the use of the gold coin for the “O” in the “new world currency” clearly connects the idea of a “renminbi backed by gold” as the “new world currency.”

      Again, there’s more interesting symbolism embedded in that billboard but I don’t have time go into it.

  5. The corner in which the rabid beast of DC lurks is shrinking. All those who actually believe it will lay down and die rather than trying to retain its position by world immolation, raise your middle hand.

  6. Dave:

    With the CHINA FIX start March 20th, do you see any upside for gold and silver off of this?

    Might be a good time to add on the CARTEL’s latest slashing?

    A86

  7. The guy who posted the photo said he saw it at the airport in Bangkok. So most likely, if this is an ad placed by the Chinese government, it is just an attempt to popularize the Chinese renmibi as a competitor to the Dollar. The usage of gold symbols is only to have people associate RMB with gold. It does not mean that the Chinese government is going to bring into circulation RMB denominated gold coins replacing their fiat paper. The ad suggests that but we should not be fooled by an ad.

    There will never be a currency system based on gold. Bringing gold into circulation means decreasing the power of government. The opposite will happen. The power of governments will grow only. The more people live on the planet, the more government and the more paper based fiat money will be issued.

    There are two ways to hyperinflate a currency. One is the classical one by rising prices. The other one is by keeping prices steady and taking products out of the marketplace.
    Prices will be steady and everybody will have plenty of money, but the shops will have nothing of value for sale. This happened in the former Soviet Union.

    1. Actually here’s where the flaw in your thinking is: Any Govt that introduces a gold-backed currency will instantaneously become the most powerful Government in the world. It will also instantaneously render every Government w/out gold powerless and broke. You obviously have zero training in economics of any kind, especially monetary economics. Your definition of inflation is 100% wrong. “Inflation” is a monetary phenomenon, not a price phenomenon. “Price” inflation is a collateral indicator of monetary inflation.

      Enough said – I don’t have time for this. “He who has all the gold makes the rules” – a timeless law of nature.

  8. Dave, the gold and silver backing is coming for many currencies. But it must begin with the strongest hands and their long-term strategy of physical accumulation and exchanges replete with stealth planning, vaulting and other infrastructure buildout. As GATA’s latest two dispatches attest @ http://www.gata.org , the overt and hidden tensions in the markets is anticipation for and fear of sea changes by opposite players seeing a fast approaching tsunami:

    “Alasdair Macleod: The new London gold fix and China
    Submitted by cpowell on Fri, 2015-03-06 19:29. Section: Daily Dispatches

    2:29p ET Friday, March 6, 2015

    Dear Friend of GATA and Gold:

    As of March 20, when the London daily gold price fixing is democratized a little with the participation of Chinese banks and made more transparent, China will be in a position to control the price of the monetary metal, GoldMoney research director Alasdair Macleod writes today…”

    “Another jobs report intervention, Maguire tells KWN
    Submitted by cpowell on Fri, 2015-03-06 18:00. Section: Daily Dispatches

    1p ET Friday, March 6, 2015

    Dear Friend of GATA and Gold:

    London metals trader Andrew Maguire tells King World News today that the usual pounding on gold following the U.S. jobs report looks like an official intervention and that a new gold exchange cutting bullion banks out of transactions will change the gold market soon. Maguire’s interview is excerpted at the KWN blog here:”

  9. “Any Govt that introduces a gold-backed currency will instantaneously become the most powerful Government in the world.”

    Proof –

    The US HAD a gold backed currency after the 1933 executive order signed by FDR. From 1945-1971 the US Dollar was as good as gold and the US Dollar was the reserve currency of the world and the US became the most powerful government in the world.
    While gold coins may not circulate, its stand in, gold backed currency, has and will.

    The only drawback to a gold backed currency is that the currency printed must be limited to the amount of gold in the vaults or else inflation rears its ugly hoary head. The US had gold backed currency, but the US had so many debts, and listened to the keynesians calling for more money to solve America;s financial problems, that the US had to stretch out the gold supply rather than decrease the paper printing. At first it was one ounce of gold backed $35 in paper or US treasuries, then it was reduced to one ounce for $70, then one ounce for every $140, then the paper link to gold was watered down to even less than that-
    (Source of this information, Donald J Hoppe’s book “How to invest in gold coins” 1969, page 104. Hoppe wrote his book during the sixties so it was a written while looking at current events and not looking back at the past.)

    A gold backed currency works as long as those who control the currency don’t get carried away (which is a rare feat in this money mad world of ours.)

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