Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

China’s Gold Gambit: Outfoxing America on the World Stage?

Commodities / Gold & Silver 2023 Mar 29, 2023 - 10:46 PM GMT

By: Submissions

Commodities

By Jon Forrest Little, Unless you live under a rock (and some days I wish I did), all eyes are on which bank will fail next.

We knew this was coming. Decades of Zero Interest Rate Policy, QE, and risky fractional reserve practices have consequences.

Superpowers like Russia and China are eyeing America’s financial vulnerabilities while the Fed, Congress, Treasury, and Wall Street play musical chairs and trip over each other like Keystone cops.



Recently the U.S. and NATO have discussed sanctioning China if it supplies arms to Russia. This would backfire.

U.S. sanctions on Russia appear to have failed (if not backfired). Likewise, sanctions against China may be disastrous for these reasons:

1. China is the second largest foreign holder of U.S. debt ($900 billion in Treasuries while Japan has $1.1 trillion).

2. In 2021, China's GDP was roughly 10 times larger than Russia's.

3. Chinese banks had more than 30 times as many assets as Russian banks.

4. Total foreign investment in China was more than six times the amount that had flowed into Russia.

5. China is the world's top trading economy and the number one exporter of manufactured goods by a wide margin.

6. China is the largest lender to emerging market economies.

China and Gold

The “Belt and Road” project includes 65% of the world. And who is left outside looking in?

The answer is UNCLE SAM.

China has been busy connecting Asia, Africa, and Europe.

Chinese officials admit they are stockpiling gold as their powerful magnet to attract allies in their economic war against Team West.

• Beijing says it has signed cooperation documents with 149 countries and 32 international organizations while taking on 3,000 projects.

• China states its goal is to expand to over 200 countries and has spent $1 trillion as part of Beijing's Belt and Road Initiative to open cross-border trade routes.

• Honduras recently stated plans to open diplomatic relations with China.

• Mexico has also signed on. Mexico is the 2nd most robust economy in Latin America. Brazil is #1, and they're already on board.

The Belt and Road initiative is nicknamed "the golden road."

It is the largest infrastructure project in human history, connecting 65% of the world's population and 50% of the global GDP. Moreover, it links these countries through bridges, roads, railways, and maritime channels.

Now think about the demand for silver

Building out new physical and digital infrastructure for 65% of the world requires metals, including silver. This is huge for silver and equally significant for de-dollarization.

And it's all settling on a potential Chinese gold-backed digital yuan. Countries increasingly do not trust each other's fiat currencies.

However, they do trust gold and silver.

Gold plays a vital role in the financial reserves for China and these emerging economies. Below are some gold-centered talking points on how China influences new countries to sign on to their trade union.

• China targets emerging markets incentivized to accumulate gold as part of their reserves. This manages risk from currency holdings while also promoting stability during economic turmoil.

• Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation.

• Gold has an inverse correlation with the US dollar. Gold prices tend to rise when the dollar falls in value, protecting central banks from volatility.

The Chinese are speaking to over 149 countries about joining a gold-backed currency to take down the U.S. being the global reserve currency.

They conduct their business proposals in business suits using face-to-face old-school diplomacy methods.

In the past three weeks, while the domestic media has been saying nothing is wrong with the economy and your bank deposits are safe, China has been brokering deals with Russia, Iran, and Saudi Arabia.

The Biden administration is weaponizing the U.S. dollar via sanctions. In response, more countries are moving to escape.

Dollar depreciation (inflation) is a direct consequence of ZIRP, financing endless wars, and a wave of bail-outs within a system that privatized profits and socialized losses.

In closing, look at who has bought gold over the past twenty years.

How many Western nations do you see on the list below?

Jon Forrest Little graduated from the University of New Mexico and attended Georgetown University's Institute for Comparative Political and Economic Systems. Jon began his career in mining industry and now publishes "The PickAxe" which covers topics surrounding precious metals, energy, history, and politics.

MoneyMetals.com

© 2023 Jon Forrest - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in