Delegate Allocation Watch: Ken Cuccinelli beats out Paul Manafort in Virginia.
Ted Cruz ensures that another ten delegates in Virginia (out of thirteen) are ultimately loyal to *him*.Read More »
It’s never been more clear that China has begun to make it’s move as the reserve currency for the world. For some time now many have speculated that they intend to make the yuan or renminbi the worlds reserve currency, even while denying it just recently when President Hu visited the White House. However, as your momma used to say to you, actions speak louder than words.
As recently as 2007 China was a net exporter of Gold. They were producing more Gold than they were consuming and they were selling the excesses off on the open market. However, the next year they became a net importer of Gold, albeit a very small amount. In 2010 China imported just over 200 metric tonnes of Gold, a big change from 2007.
In 2011 they have imported 200 metric tonnes in each of the first two months! The first indication that rumors are true about positioning itself as a world reserve currency. Backing the yuan or renminbi with Gold is a sure way to allow themselves to be taken seriously by the rest of the world. When a huge downturn comes about, nations using a fiat based currency system will be looking for stability and no currency is more stable then one backed my Gold, as the dollar used to be.
They have some ground to gain on the US as it is reported, but unaudited, that the US has 8,133.5 metric tonnes of Gold and even some of the nations in Europe that are in trouble have over 2,400 tonnes of Gold. China is just sixth in the world with 1,054 metric tonnes, so yes they have a way to go.
Why now? Why 2011? Because, with all the uncertainty in global economics it appears the time is right to begin positioning. More than a dozen countries, including the US, are on the brink of default and it will only take a few more events to push them over the edge. When the collapses begin, it will be a domino effect and even countries with fairly stable economies will fall prey. China to the rescue.
Many experts agree that a big change is coming and with the Fed announcing the absolute end to QE2 in June, most feel that the economy will not be able to sustain itself and that the Fed’s assumptions are wrong. The result will be a collapse that QE3 will be unable to reverse.
Robert Zoellick, president of the World Bank recently spoke of the possibility of a return to some form of gold standard. To further their position and "Spread the Yuan around", they have just this week announced that they will allow cross border trades in the yuan this year.
The People’s Bank of China said that it was “part of plans to grow the currency’s international role” and “would respond to overseas demand for the yuan to be used as a reserve currency.” No smoke signals in that statement.
Even the Chinese people are getting in on the Gold action with reports of Gold bars sold to individuals up 70% over last year at Beijing’s largest jewelry store . And reports at the Malls in are showing massive increases in the purchases of gold bars and jewelry.
The Golden Dragon finally roars to life. It’s going to be a different world soon and I’m not sure we here in the US are going to like it.