gold-backed yuan ?

[Robert Fischer]

If China goes with a gold-backed currency, how will this effect the economy?

[Valuist]

IF that was to happen, the dollar would get crushed.

But China is only about 6th or 7th in gold reserves. They don't even have as much as the SPDR Gold ETF, let alone the US or Germany.

[ArlJim78]

I read somewhere recently that China has been buying up huge amounts of gold like its going out of style.

[Robert Fischer]

IF that was to happen, the dollar would get crushed.

But China is only about 6th or 7th in gold reserves. They don't even have as much as the SPDR Gold ETF, let alone the US or Germany.

I don't have inside info, but those reserve figures would depend on an honest estimate to the IMF on gold holdings. Their reported IMF reserves figure is around 1,000 tonnes.

In 2012 alone China has estimates of something like:
~350 tonnes produced
~750 tonnes imported (382.7 from Jan-June)
^^^^^^^^
I read somewhere recently that China has been buying up huge amounts of gold like its going out of style.

[lamboguy]

according to IMF figures, China doesn't own that much gold. however, China is the largest producer of Gold in the world these days, and they don't let any of it leave their soil. also, they buy as much of the stuff as they can put their hands on now without pushing the price up. the have been big buyers in London on the open market.

i think its a joke that the Obama administration can't figure out what China is doing. instead of letting the price of gold go up they fight and short the metal and we let China buy the stuff on the cheap. from pretty solid information that i have if Romney gets elected he is going to put a massive increase in the price of gold overnight so that if China wants it, they will have to pay up for it.

[PaceAdvantage]

from pretty solid information that i have if Romney gets elected he is going to put a massive increase in the price of gold overnight so that if China wants it, they will have to pay up for it.Price will double overnight if Romney wins...that's what you said, right?

Insane.

[Robert Fischer]

IF that was to happen, the dollar would get crushed.

I don't really understand the mechanics of it all.

[Valuist]

I think gold will go higher if Obama wins. If Obama wins, he will keep Bernanke, and the QE and money printing will continue.

Romney and Ryan are already on record that Bernanke would be shown the door.

[lamboguy]

Price will double overnight if Romney wins...that's what you said, right?

Insane.he't not going to let the Chineese pick our pockets. the Chineese are unloading as much paper as they can possibly get rid of now, they are buying real estate, raw materials, technology, and lots of gold. they have loved the stuff for centuries now, they aren't about to stop now.. and understand that the manifest of the Republic of China is to rule the world. they can't win with bullets, but they can get us economically if we are stupid enough to let it happen.

[Saratoga_Mike]

he't not going to let the Chineese pick our pockets. the Chineese are unloading as much paper as they can possibly get rid of now, they are buying real estate, raw materials, technology, and lots of gold. they have loved the stuff for centuries now, they aren't about to stop now.. and understand that the manifest of the Republic of China is to rule the world. they can't win with bullets, but they can get us economically if we are stupid enough to let it happen.


I don't see it in the data.

From the latest monthly TICs data from Treasury....

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD



China, Mainland Jun 12: 1164.3; May 12: 1164.0; April 12: 1164.4 March 12: 1144.0; Feb 12: 1155.2; Jan 12: 1166.2

[fast4522]

I think gold will go higher if Obama wins. If Obama wins, he will keep Bernanke, and the QE and money printing will continue.

Romney and Ryan are already on record that Bernanke would be shown the door.


It is a No Brainer, Bernanke gets fired and Obama's uncle gets deported. That is enough for people to line up to vote against Obama.

[Robert Fischer]

Maybe the gold-backed yuan is just a bargaining chip ?

[Tom]

Anyone have any confidence the USA has any gold at all?
I would not be surprised if it was all gone, under secret agreements and crap.
If I don't see it, I don't believe it.

Bet China has most of what we used to have.

[Saratoga_Mike]

he't not going to let the Chineese pick our pockets. the Chineese are unloading as much paper as they can possibly get rid of now, they are buying real estate, raw materials, technology, and lots of gold. they have loved the stuff for centuries now, they aren't about to stop now.. and understand that the manifest of the Republic of China is to rule the world. they can't win with bullets, but they can get us economically if we are stupid enough to let it happen.

I don't see it...

8/17/12, Wall Street Journal

BY TATYANA SHUMSKY

Global gold demand hit its lowest level in more than two years in the second quarter amid a weakening appetite for the yellow metal in India and China.
Demand in the period fell by 7% to 990 metric tons from the second quarter of 2011, according to the World Gold Council, an industry group. This is the lowest since the first quarter of 2010.

[TJDave]

The idea that currency should be backed by gold is absurd. A century ago when the world economy was infinitesimally smaller, yeah. Today there just ain't enough gold to go around. OTOH, maybe I could trade my wedding ring in on a Ferrari.

[Saratoga_Mike]

The idea that currency should be backed by gold is absurd. A century ago when the world economy was infinitesimally smaller, yeah. Today there just ain't enough gold to go around. OTOH, maybe I could trade my wedding ring in on a Ferrari.

The size of the economy doesn't have anything to do with its feasability (the price of dollars in gold would simply be fixed at a higher level). Now I would say the leverage in the system would make it a bad idea at this point.

[Robert Fischer]

I have a very limited knowledge of this stuff, and then to make matters worse, have some unconventional thoughts about gold.

The mining and production of gold, as far as I can tell is more efficient. For the quality mines that are up and running, it seems like it costs something like $200 an ounce to produce. and it really doesn't seem to be that scarce. China reportedly broke the 350 tonnes mark in '10 or '11, and the mines have been producing for some time now.

My crazy theory is that we have used gold(and not to get side-tracked, oil and others...) to "hide" inflation and give even more power to certain interests. With gold, it is accepted as a "standard" and a "reserve" which seems to overshadow anything to do with production costs or scarcity.

[Robert Fischer]

Just a crazy theory...
but I get completely lost if China introduces a Gold-backed currency.

1st - This means that their currency is No Longer pegged to the dollar.
Huge implications = without undervalued currency they are not attractive exporters to the USA. Basically their stuff is no longer much cheaper. They have to export elsewhere to other allied economies.

2nd - If my over-valued theory on gold pricing is correct, do we (assuming we can), let the bottom fall out?? At which point it could make the yuan inflate...

meanwhile our economy is experiencing inflation, and the dollar risks losing it's status as global trade standard...

etc...etc....???...


It's a drastic move for a country like China.
My guess is that is just a threat or bargaining chip should tensions in the middle east(iran) and russia(missle system) escalate, and an insurance option against losing current export market share.