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China Plans Yuan-Denominated Gold Fix – Dave Kranzler

Friday, March 6, 2015 11:29

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TND Guest Contributor: Dave Kranzler |

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:

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.

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About Dave Kranzler:

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.